EXCHANGE 


*X>}i^^  •> 


REPORT  of  the  PROCEEDINGS 


OF  THE 


Twenty-Third 
Annual  Convention 


The  American  Mining 
Congress 


DENVER,  COLORADO 

NOVEMBER  15  to  20 
1920 


jfr/s^t^issa^TTs^ 


•  •*•  • 


Report  of  the  Proceedings 


OF  THE 


Twenty-Third  Annual  Convention 


OF  THE 


American  Mining  Congress 


DENVER,  COLORADO 

NOVEMBER  15-20,  1920 


National  Tax  Conference 

National  Gold  Conference 

National  Flotation  Conference 

National  Oil-Shale  Conference 

National  Standardization  Conference 

National  Education  and  Public  Service  Conference 


Published  by  the  AMERICAN    MINING   CONGRESS,  Mun»ey    Building,  Washington, 

D.  C.,  April,  1921 


Made  by 

FLEET-McGINLEY  CO. 
Baltimore,  Md. 


A- 

r>     w 


Proceedings  of 

The  American  Mining  Congress 

Twenty-third  Annual  Session 

DENVER,  COLORADO 


OPENING  SESSION  OF  THE  CONVENTION 

MONDAY,  NOVEMBER  15,  1920,  2.20  P.  M. 

CHAIRMAN  THOMAS  B.  STEARNS:  Gentlemen  of  the  American 
Mining  Congress:  I  have  the  great  pleasure  and  honor  of  calling  the 
session  to  order  and  beginning  the  elaborate,  and  we.  hope  helpful,  pro- 
gram which  has  been  mapped  out  by  your  very  competent  Secretary. 
Twenty-three  years  ago  there  was  born  in  the  city  of  Denver  a  healthy 
infant,  and  those  of  us  who  lived  here  at  the  time  cannot  but  take  great 
pride  in  the  history  of  this  creation.  All  of  those  who  have  nurtured  it 
in  infancy,  and  who  have  cared  for  it  in  childhood  and  youth,  must  be 
gratified  to  see  this  organization  in  its  present  virile  state  of  manhood. 
The  accomplishments  of  the  American  Mining  Congress  are  altogether 
too  varied  and  too  many  for  me  to  even  attempt  to  recapitulate  in  a  few 
remarks,  and  under  the  conditions  I  must  seek  refuge  in  print,  and  you 
will  find  in  the  issue  of  the  Daily  Mining  Record  of  Denver  a  brief  account 
of  these  accomplishments. 

This  session  today,  which  we  welcome  on  its  return  to  Denver,  is  met 
to  consider  the  many,  or  some  of  the  many,  vexatious  and  troublesome 
problems  that  devolve  upon  us,  due  to  the  reconstruction  period.  There 
exists  today  in  the  United  States  a  disposition  that  never  hesitates  to 
attempt  the  solution  of  any  problem,  however  great  or  difficult.  But  I, 
for  one,  as  I  know  all  of  those  present,  have  the  greatest  faith  in  the 
judgment,  in  the  intelligence,  and  in  the  future  of  the  United  States  of 
America.  (Applause.) 

I  am  going  to  ask  Rev.  A.  H.  C.  Morse,  in  whose  sanctuary  we  are  meet- 
ing, to  offer  the  invocation. 

The  Invocation 

REV.  A.  H.  C.  MORSE:  Our  gracious  Father,  we  look  up  to  Thee  at 
the  opening  of  this  Congress.  We  remember  that  the  earth  is  the  Lord's 
and  the  fullness  thereof,  the  world  and  they  that  dwell  therein;  that  -in 
Thy  wisdom  Thou  hast  bestowed  upon  us  gold  and  silver,  and  all  the 


4  REPORT  OF  PROCEEDINGS 

treasures  needed  for  our  comfort  and  our  good.  We  thank  Thee  for  this 
wise  provision.  In  our  search  for  these  things  wilt  Thou  save  us  from 
greed,  and  in  the  finding  of  them  wilt  Thou  preserve  us  also  that  we 
become  not  forgetful  of  Thee.  We  thank  Thee  for  the  necessities  of  toil; 
these  are  for  the  good  of  Thy  people  and  are  essential  to  progress,  calling 
for  wisdom  and  leadership  on  the  part  of  those  who  project  great  indus- 
tries, and  fidelity  on  the  part  of  those  who  execute  them,  and  this  is  all 
but  another  evidence  of  the  wise  provisions  Thou  hast  made  for  this 
world.  We  pray  for  wisdom  to  be  given  to  those  who  sit  in  this  Congress 
that  they  may  be  saved  from  selfishness;  that  wealth  may  be  increased 
and  the  world  made  richer.  We  pray  for  Thy  great  Spirit  to  descend  upon 
capital  and  labor,  as  we  sometimes  speak  of  these  phases  of  organization; 
that  those  who  project  great  industries  may  be  governed  by  Divine  Wis- 
dom; that  the  laborer,  who  is  Nature's  nobleman,  may  be  upright  and 
true,  and  that  a  new  spirit  of  fellowship  may  spring  up  between  those 
who  plan  and  those  who  execute  these  plans,  and  so  wilt  Thou  save  us 
from  strife.  We  are  not  forgetful  of  those  who  are  in  the  heart  of  the 
earth  with  pick  and  shovel.  W!e  pray  for  them  and  for  their  families; 
give  them  a  real  joy  in  their  toil,  and  if  sometime  they  return,  •  weary 
in  body,  give  them  renewed  courage  and  the  satisfaction  that  comes  from 
work  well  done,  and  thus  may  all  people  lose  themselves  in  the  thought  of 
others,  and  thus  far  share  the  spirit  of  Him  who  revealed  Thee  to  us, 
and  to  Thee  alone  shall  be  the  praise  forever  and  ever,  for  Thine  is  the 
kingdom  and  the  glory.  Amen. 

CHAIRMAN  STEARNS:  I  have  the  pleasure  to  present  to  you  the  Hon. 
Dewey  C.  Bailey,  Mayor  of  the  City  of  Denver.  (Applause.) 

Welcome  to  Denver 

MAYOR  BAILEY:  Ladies  and  gentlemen,  and  delegates  to  the  Amer- 
ican Mining  Congress:  It  is  a  great  honor  to  Denver  that  the  Mining 
Congress  is  holding  its  sessions  in  this  city  at  this  time.  I  hope  that 
great  good  may  come  from  your  deliberations,  and  there  is  no  doubt  in 
my  mind  that  great  plans  will  be  promulgated  here  which  will  be  helpful 
to  the  whole  inter-mountain  mining  country.  As  normal  times  return  to 
this  country,  and  prices  and  labor  reach  a  point  that  can  be  relied  upon, 
it  seems  to  me  that  interest  equal  to  that  'of  some  years  ago  should  be 
taken  in  the  mining  industry  of  the  West  and  of  the  Rocky  Mountain 
region.  Mining  in  this  State  was  the  greatest  industry  we  had  25  years 
ago.  Great  things  sprang  from  mining.  This  city  was  practically  built 
by  returns  received  from  Colorado  mines.  I  am  sure  that  the  plans  made 
during  this  Mining  Congress  ensure  great  energy  being  put  again  into 
the  mining  industry  of  the  West. 

It  is  not  my  purpose  to  make  an  address.  I  am  here  merely  to  welcome 
the  delegates  to  this  Convention  for  the  good  people  of  Denver,  and  I 
hereby  welcome  all  of  them  to  this  great  city,  with  the  hope  that  you  will 
enjoy  your  stay  here;  that  your  work  may  be  successful,  and  that  when 
you  leave  for  your  homes  you  will  feel  as  though  you  liked  Denver,  and 
that  you  will  return  again  as  soon  as  you  can  to  visit  us.  (Applause.) 

CHAIRMAN  STEARNS:  The  next  speaker,  Mr.  George  E.  Collins,  is, 
I  think,  well  known  to  most  of  you.  We  regard  him  as  one  of  our  mining 
headlights  in  the  State,  and  I  would  say  that  locally  he  possesses  an 


THE  AMERICAN"  MIXING  CONGRESS  5 

excellent  reputation.  We  have  asked  him,  as  a  Colorado  member  of  your 
organization,  to  say  a  word  of  welcome  in  behalf  of  the  City  and  the  State. 
(Applause.; 

CHAIRMAN  STEARNS:  It  becomes  now  my  duty,  and  also  your 
pleasure,  to  exchange  presiding  officers,  and  to  present  the  president,  Mr. 
Bulkeley  Wells.  (Applause.) 

Appreciation  From  President  Wilson 

PRESIDENT  BULKELEY  WELLS:  Mr.  Chairman,  delegates  to  the 
23rd  annual  Convention,  ladies  and  gentlemen:  To  another  has  been 
assigned  the  pleasant  duty  of  responding  to  the  words  of  welcome  so 
graciously  expressed.  I  simply  wish  at  this  time  to  express  to  all  of  you 
my  personal  appreciation  of  your  attendance  at  this  Convention.  I  have 
a  telegram  which  I  am  sure  you  will  be  glad  to  hear,  dated  White  House, 
today:  "I  wish  to  extend  my  greetings  and  best  wishes  to  the  twenty- 
third  annual  Convention  of  the  American  Mining  Congress.  The  work  of 
the  Congress  in  co-operation  with  the  Federal  Government,  with  mining 
operators  and  other  interests  of  our  mineral  resources  has  been  a  help 
of  immense  benefit.  It  provides  an  opportunity  for  discussion,  education, 
and  the  dissemination  of  information,  and  cannot  fail  to  be  helpful  in 
improving  and  advancing  the  mining  industry." 

(Signed)     WOODROW   WILSON. 

(Applause.) 

PRESIDENT  WELLS:  Wherever  and  whenever  there  is  held  a  con 
vention  of  the  American  Mining  Congress,  you  will  invariably  find  Mr.  E. 
P  Mathewson  of  New  York,  who  is  the  dean  of  such  conventions;  and  to 
him,  therefore,  is  naturally  assigned  the  response  in  behalf  of  the  Amer- 
ican Mining  Congress.  (Applause.) 

MR.  MATHEWSON:  Mr.  Chairman,  ladies  and  gentlemen:  As  1  came 
in  on  the  train  this  morning,  a  little  late,  I  was  fortunate  enough  to  get 
a  copy  of  the  morning  paper.  I  thought  I  would  see  just  what  was  going 
to  happen  today  at  the  Convention.  I  read  with  amazement  that  I"  had 
been  selected  to  respond  to  the  addresses  of  welcome  on  behalf  of  the 
American  Mining  Congress.  That  was  the  first  intimation  I  had  that  I 
would  be  here  this  afternoon.  However,  I  have  some  apologies  to  make, 
and  I  am  glad  to  have  the  opportunity  to  make  them. 

My  father  was  a  prominent  member  of  the  Methodist  Church,  and  he 
constrained  me  to  attend  that  same  church  in  my  youth.  I  attended 
it  as  long  as  he  compelled  me.  During  those  years  of  attendance  I 
learned  something  about  conversion.  After  I  acquired  years  of  responsi- 
bility I  became  connected  with  the  smelting  industry,  particularly  the 
copper  smelting  industry,  and  there  I  learned  more  about  conversion  and 
converting.  At  the  last  Convention  of  the  American  Mining  Congress  at 
St.  Louis  I  was,  unfortunately,  the  one  discordant  note  in  its  harmony,  so 
I  want  now  to  apologize,  and  say  that  since  that  time  my  eyes  have  been 


6  REPORT  OF  PROCEEDINGS 

opened,  and  I  have  been  converted  and  now  am  with  the  gold  conference, 
the  gold  standardization  committee  and  the  McFadden  Bill,  and  every- 
thing else,  and  I  am  going  to  help  you  through.  (Applause.)  If  our  silver 
miners  could  get  so  much  assistance  and  encouragement,  why  not  gold 
miners?  and, let  the  fellows  who  use  the  gold  pay  the  bill.  (Applause.) 

We  have  been  told  that  the  American  Mining  Congress  was  born  in  the 
city  of  Denver.  It  remained  here  for  many  years,  and  then  on  account  of 
its  increasing  activities  and  the  necessity  of  having  headquarters  at  the 
seat  of  Government,  it  moved  to  Washington.  Denver  lost  at  that  time 
one  of  its  best  citizens.  I  refer  to  Mr.  Callbreath,  who  had  to  move  to 
Washington,  but  I  think  he  still  votes  here.  . 

Growth  of  the  Mining  Congress 

The  Congress  has  done  wonderful  work  during  the  last  few  years.  Its 
work  has  doubled,  trebled  and  quadrupled.  People  not  acquainted  with 
its  workings  would  be  surprised  to  know  of.  all  its  activities.  It  is  a  neces- 
sity in  the  mining  industry  today.  It  seems  strange  that  they  selected  me 
to  speak  on  behalf  of  the  American  Mining  Congress  here  this  afternoon. 
I  was  a  citizen  of  the  State  of  Colorado  when  this  Congress  was  born 
here,  and  when  the  meeting  was  called  to  welcome  the  new  baby,  I  was 
in  the  smelting  business,  and  my  private  opinion  was  that  this  Mining  Con- 
gress was  organized  for  the  sole  purpose  of  seeing  that  the  smelting  men 
didn't  gouge  the  miners.  (Laughter  and  applause.)  Its  activities,  as  I 
say,  have  widened;  smelter  men  have  been  welcomed  into  the  member- 
ship, and  that  is  how  I  got  in.  I  still  stick  to  the  smelting  game,  and  do  a 
little  mining  on  the  side.  I  have  learned  in  the  few  years  that  I  have  been 
connected  with  the  Congress  that  it  is  a  good  thing,  and  I  know  the  wel- 
come of  Colorado  is  heartfelt.  You  have  the  best  water  that  Denver  can 
produce;  you  have  the  welcome  of  the  Denver  people — and  that  means 
the  best  there  is  in  the  world — and  we  are  here  to  take  what  you  have, 
so  if  there  is  any  of  that  stuff  the  other  fellow  is  referring  to,  we  will  see 
you  quietly.  (Laughter  and  applause.) 

PRESIDENT  WELLS:  Having  heard  from  the  Atlantic  Coast,  we  will 
now  step  lightly  to  the  Pacific,  and  Judge  John  F.  Davis  will  respond  on 
behalf  of  the  mining  industry.  (Applause.) 

[Mr.  Davis'  remarks  will  be  found'  on  page  269  of  the  Proceedings. 1 
Organizing  Resolutions  Committees 

SECRETARY  CALLBREATH:  I  want  to  announce  the  plan  for  organ- 
izing the  Committee  on  Resolutions.  According  to  our  by-laws,  the  dele- 
gation from  each  State  represented  in  the  Convention  is  entitled  to  name 
one  member  on  the  Committee  on  Resolutions.  I  will  ask  each  of  the 
delegations  present  to  assemble  and  be  ready  to  report  at  the  meeting 
tomorrow  evening  at  8  o'clock,  after  having  selected  the  name  of  that 
man  who  is  to  serve  on  the  committee.  This  is  an  important  duty.  The 
Committee  on  Resolutions  has  the  heavy  work  of  the  Convention  to  per- 


THE  AMERICAN   MIXING  CONGRESS  7 

form;  it  is  by  it  that  all  resolutions  shall  be  considered  and  acted. upon, 
and  I  therefore  urge  on  you  that  you  make  your  selections  carefully.  If 
some  one  from  each  delegation  will  determine  a  place  and  time  of  meeting 
and  make  announcement  on  the  bulletin  board,  then  the  other  members 
will  know  where  and  when  the  meeting  is  to  be  held.  I  wish  you  would 
give  this  your  special  attention  and  be  ready  promptly  to  name  your 
member  on  the  committee  at  the  opening  of  the  session  tomorrow  evening. 

PRESIDENT  WELLS:  I  was  fortunate  to  learn  yesterday  that  Mr. 
Eugene  Meyer,  Jr.,  was  in  Denver  in  connection  with  Senator  Calder's 
Committee  on  Reconstruction.  Mr.  Meyer  was  managing  director  of  the 
War  Finance  Corporation,  and  I  have  asked  him  to  say  a  few  words  to 
you  regarding  the  work  of  the  Corporation,  more  especially  in  relation  to 
the  export  of  American  mineral  products.  (Applause.) 

[Mr.  Meyer's  address  will  be  found  on  page  430  of  the  Proceedings.] 

PRESIDENT  WELLS:  The  Secretary  of  the  Interior  has  honored  us 
by  sending  as  his  personal  representative  the  Hon.  Clay  Tallman,  com- 
missioner of  the  General  Land  Office,  who  has  proved  himself  a  just  and 
firm  friend  of  the  West.  (Applause.) 

Appreciation  of  Mining  Congress  in  Washington 

MR.  TALLMAN:  At  the  outset  I  think  I  should  say  a  word  along  the 
line  that  I  am  sure  the  Secretary  would  say  himself  if  he  were  here,  and 
that  is  in  compliment  and  congratulation  of  the  American  Mining  Con- 
gress for  the  very  excellent  work  it  has  done  during  a  number  of  years 
and  is  now  doing.  We  people  in  Washington  come  in  contact  with  a  good 
many  organizations.  There  are  all  classes,  kinds  and  descriptions  de- 
signed to  favor  every  possible  species  of  economic,  social,  religious  or 
other  propaganda  that  anybody  can  think  of;  and  we  soon  learned  always 
to  begin  and  search  behind  the  scenes  to  see  who  is  behind  this  organiza- 
tion, and  what  is  the  real  purpose  of  its  existence.  But  we  have  come 
to  know  Mr.  Callbreath  almost  as  an  institution,  almost  as  a  part  of  Gov- 
ernment: we  know  he  is  there,  not  in  the  furtherance  of  any  particular 
branch  of  mining  industry  or  any  particular  private  interest — he  is  there 
for  the  mining  industry  as  a  whole.  We  know  that  he  is  not  going  to 
ask  for  anything  he  is  not  entitled  to  or  ought  not  to  have;  we  know  that 
he  is  acting  in  good  faith  and  representing  in  a  proper  way  that  great 
industry  which  is  so  important  in  the  Western  country.  (Applause.) 

What  I  shall  attempt  to  confine  myself  to  is  a  brief  discussion  of  the 
Mineral  Leasing  Law  of  February  25,  1920 — a  new  Act,  far-reaching  and 
important  in  its  consequences. 

[Mr.  Tallmnn's  paper  will  be  found  on  page  377  of  the  Proceedings.] 

PRESIDENT   WELLS:     As   it  is   somewhat  late,  we  will  defer  until 

another  place  on  the  program  Dr.  Cottrell's  address,  which  was  to  have 

followed  at  this  time,  and  the  Convention  will  now  stand  adjourned  until 
8  o'clock  this  evening  at  this  place. 


8  REPORT  OF  PROCEEDINGS 

SECOND  GENERAL  SESSION 

MONDAY,  NOVEMBER  15,  1920,  8  P.  M. 

The  president,  Mr.  Bulkeley  Wells,  presided. 

CHAIRMAN  WELLS:  Not  all  of  you  know  the  kind  of  Governor  we 
have  in  Colorado,  so  I  will  tell  you  a  few  things  about  him: 

He  was,  first  of  all,  a  mining  man,  which,  of  course,  fitted  him  through 
adversity  to  become  an  oil  man  and  from  that  he  progressed  to  being  a 
governor;  so  you  see  what  is  to  be  gained  by  that  orderly  procedure.  A 
few  days  before  cur  reornt  eTrrtion  a  strike  was  called  in  Colorado, 
evidently  in  the  hope  of  gaining  political  advantage  against  Governor 
Shoup  and  the  other  candidates  on  his  ticket.  He  took  up  the  challenge, 
and  in  an  open  letter  said,  in  effect:  "If  this  costs  me  my  election,  it 
is  of  no  importance;  there  shall  be  law  and  order  in  Colorado."  (Ap- 
plause.) And  the  interesting  fact  is  that  some  73,000  people  who  voted 
said  he  was  right — more  than  those  who  said  he  was  wrong.  (Applause.) 

Politics  in  Colorado 

GOVERNOR  O.  H.  SHOTTP:  Mr.  Chairman,  ladies  and  gentlemen: 
Mr.  Wells  did  not  explain  to  you  that  I  was  something  else  besides  a 
mining  and  oil  man.  During  this  campaign,  like  most  politicians,  I  found 
it  was  necessary  to  change  my  thoughts.  The  first  time  I  ran  as  a  busi- 
ness man  and  was  elected  as  such.  I  knew  that  was  a  joke,  and  the 
people  did  before  they  voted  for  me,  so  the  next  time  I  ran  as  a  farmer, 
and  the  farmers  in  Colorado  get  60,000  more  votes  than  the  business  men. 
So  the  next  time — because  I  will  keep  on  going — I  shall  run  as  a  suc- 
cessful politician;  and  I  ought  to  get  it  by  acclamation. 

Colorado  is  glad  indeed  to  have  you  out  here — your  Mining  Congress — 
because  our  mining  business  needs  something.  Sixty  years  ago  Colorado 
was  chiefly  a  mining  State,  and  throughout  its  many  developments  in  vari- 
ous gold  and  silver  camps  we  produced  a  billion  and  a  half  dollars'  worth 
of  metal.  As  you  know,  we  lead  in  the  production  of  tungsten,  and  we 
have  deposits  of  rare  metals.  Thirty  or  forty  years  ago  mining  was  our 
chief  business,  but  today  the  only  profitable  mines  I  know  of  that  are  left 
belong  to  Bulkeley  Wells  and  George  Taylor.  A  mining  man  is  one  who 
invests,  as  I  understand  it.  I  believe  Mark  Twain  said,  "A  mine  was  a 
hole  in  the  ground  owned  by  a  liar."  But  I  certainly  am  impressed  with 
the  way  the  mining  business  has  improved,  especially  to  have  conventions 
like  this  in  the  First  Baptist  Church  of  Denver.  It  is  certainly  a  great 
thing  over  the  early  days  in  Cripple  Creek,  because  the  church  I  attended 
there  is  very  far  removed  from  this.  They  had  a  sign  over  the  organ 
something  like  this:  "Don't  shoot  the  organist;  he  is  doing  his  darndest." 
I  do  not  see  any  such  sign  around  here,  although  there  are  signs  around 
the  building. 

We  are  glad  indeed  to  have  this  Convention  here,  and  hope  that  you 


THE  AMERICAN  MIXING  CONGRESS  9 

may  learn  something  from  us,  and  we  won't  sell  you  anything,  because 
there  te  a  ban  on  selling  anything  during  this  Convention;  but  we  will 
take  your  address  and  visit  you  after  you  get  home. 

Resources  of  Colorado 

But  the  mining  business  was  the  foundation  of  Colorado's  greatness. 
You  will  be  interested  in  knowing  that  after  the  money  came  from  the 
mines,  the  men  who  got  that  money  proceeded  to  develop  the  horticultural 
and  the  agricultural  business,  and  today,  these,  with  the  live-stock  inter- 
ests, are  worth  a  great  many  more  times  that  of  the  mining  interests. 
We  produced  last  year  in  Colorado  the  largest  crop  of  sugar  beets  grown 
in  any  State.  That  is  no  reflection  on  the  mining  men,  because  we  are 
ninth  in  the  production  of  gold,  and  Colorado  could  be  second  to  none  if 
we  had  transportation.  We  are  twelfth  in  production  of  wheat,  and  you 
would  hardly  look  upon  Colorado  as  being  a  wheat-growing  State,  so  our 
production  along  every  line  has  been  marked  with  development.  We  are 
glad  to  have  you  come  back.  We  like  to  relate  the  history  of  our  past, 
and  we  like  to  look  forward  with  enthusiasm  to  what  we  may  have  in  the 
future.  We  have  yet  in  Colorado  undeveloped  resources  of  great  value. 
You  would  be  interested  in  knowing  that  in  the  shale  deposits  is  stored 
more  oil  than  produced  in  America  since  the  opening  of  the  first  well  in 
Pennsylvania,  in  1858.  We  have  set  aside  in  this  country  vast  resources 
that  may  be  of  permanent  benefit  to  you,  and  so  we  are  glad  to  have  you 
come  to  Colorado  and  see  our  mountains  and  sunshine,  see  our  people, 
get  acquaiated  with  us,  and  we  will  get  acquainted  with  you.  and  by 
stimulus  and  united  effort  bring  back  conditions  that  will  make  mining  in 
Colorado  and  elsewhere  profitable.  Until  there  are  changes  and  remedies, 
we  cannot  mine  in  competition  with  foreign  countries.  We  have  tung 
sten,  molybdenum  and  carnotite  mines,  and  everything  that  every  State 
can  possibly  have,  so  we  are  looking  forward  to  expansion  and  growth 
in  our  mining  industry. 

I  do  not  want  to  discourage  you  in  regard  to  any  of  the  different  States, 
but  I  want  to  tell  you  that  Colorado  has  the  best  people  we  know  of;  we 
have  the  finest  city  in  America;  we  have  the  finest  people  in  the  city; 
and  you  all  have  heard  about  the  Governor,  and  he  admits  it,  so  if  this 
Convention  will  do  you  as  much  good  as  we  hope  it  will,  it  certainly  will 
be  a  Convention  long  to  be  remembered. 

I  am  elected  for  two  years,  and  I  don't  need  to  talk  to  you  any  longer, 
because  I  don't  care.  (Laughter  and  applause.) 

President's  Annual  Address 

CHAIRMAN  WELLS:  It  now  becomes  my  duty  to  inflict  upon  you  the 
so-called  President's  annual  address.  It  is  really  of  more  meaning  to  the 
actual  members  of  the  Mining  Congress,  but  primarily  it  must  be  an 
address. 

[Mr.  Well's  pappr  will  be  found  on  page  265  of  the  Proceedings.] 


10  REPORT  OF  PROCEEDINGS 

CHAIRMAN  WELLS  (continuing) :  We  asked  Governor  Allen  of  Kan- 
sas to  come  here  and  address  us  on  the  subject  of  the  Kansas  Industrial 
Law.  He  has  expressed  great  regret  that  engagements  he  could  not 
break  prevented  his  doing  so,  but  he  sent  a  telegram  assuring  me  that  he 
had  sent  us  a  man  far  better  qualified  to  speak  than  he  would  be  if  present. 
He  has  supplemented  that  message  with  this  one. 

November  15,   1920. 

JOHN  T.  BURNS,   The  American  Mining  Congress, 
Denver,  Colorado. 

MY  DEAR   MR.  BURNS: 

Allow  me  to  offer  my  best  wishes  for  the  success  of  the  great  congress 
you  are  about  to  hold.  It  meets  at  a,  time  when  we  are  in  particular  need 
of  a  constructive  program  for  the  stabilization  of  our  industrial  life.  I 
am  glad  that  Senator  Smith  of  our  State  is  to  be  with  you  for  the  purpose 
of  presenting  the  principles  which  have  been  worked  out  in  our  Court  of 
Industrial  Relations.  It  seems  to  me  that  we  have  reached  a  period  in 
America  when  a  just  Government  must  assume  the  same  responsibility 
for  the  regulation  of  industrial  strife  that  it  has  assumed  for  all  other 
forms  of  strife.  If  there  is  any  subject  in  this  country  too  great  for 
Government  to  solve  with  justice,  then  Government  is  a  failure. 

(Signed)     HENRY  J.  ALLEN. 

CHAIRMAN  WELLS  (continuing) :  Senator  F.  Dumont  Smith,  who 
drafted  the  Kansas  Industrial  Law,  will  now  address  you  upon  that 
subject. 

[Mr.  Smith's  address  will  be  found  on  page  403  of  the  Proceedings.] 

CHAIRMAN  WELLS:  We  have  with  us  a  man  who  has  brought  to  us 
words  pf  courage  and  comfort  in  these  trying  times;  it  is  therefore  with 
pleasure  that  I  introduce  to  you  Dr.  Chas.  A.  Eaton,  editor  of  Leslie's 
Weekly,  to  speak  upon  the  subject  of  present  and  future  relations  between 
capital  and  labor. 

Conditions  as  Viewed  by  the  Editor  of  Leslie's 

[Dr.  Eaton's  lengthy  and  humorous  address  included  such  topics  as  his 
personal  contact  with  laboring  men,  what  was  done  during  the  war,  labor 
in  the  shipyards,  the  misunderstanding  between  capital  and  labor,  human 
progress,  the  difference  between  America  and  Europe  and  Asia,  politics, 
science  applied  to  industry,  racial  diversity,  tyranny  of  wealth  and  labor, 
necessity  of  leadership,  propaganda,  State  socialism,  and  the  need  of  cap- 
ital and  labor  getting  together.] 

CHAIRMAN  WELLS:     The  meeting  will  stand  adjourned. 


THE  AMERICAN  MINING  CONGRESS  11 

THIRD  GENERAL  SESSION 
TUESDAY,  NOVEMBER  16,  1920,  8  P.  M. 

CHAIRMAN  WELLS:  The  third  general  session  of  this  Convention 
will  now  be  in  order.  The  first  business  is  the  announcement  of  members 
of  the  Resolutions  Committee. 

SECRETARY  CALLBREATH:  I  will  call  the  roll.  The  States  named 
will  please  respond  and  give  the  name  of  their  member  selected  as 
promptly  as  possible.  (The  roll  was  thereupon  called.) 

SECRETARY  CALLBREATH  (continuing) :  May  I  announce,  Mr.  Presi- 
dent, that  resolutions  are  to  be  presented  to  the  Convention  and  submitted 
to  the  Committee  on  Resolutions  without  debate.  Any  persons  having  reso- 
lutions to  offer  will  have  opportunity  at  the  beginning  of  each  session,  and 
T  would  urge  those  having  resolutions  to  offer  to  do  so  at  the  earliest 
possible  moment. 

Will  the  Resolutions  Committee  meet  at  9  o'clock  in  the  morning,  or 
perhaps  9.30,  in  the  little  room  in  which  we  had  our  lunch;  I  think  it  is 
parlor  C. 

CHAIRMAN  WELLS:  Are  there  any  resolutions  to  be  offered  at  this 
time?  If  not,  we  will  proceed. 

I  regret  to  inform  you  that  Congressman  McFadden  has  been  detained 
in  New  York,  and  will  not  be  able  to  attend  either  this  Convention  or  any 
of  the  subsequent  sessions.  Mr.  Merritt  has  also  been  detained.  He  was 
to  speak  this  evening,  but  his  paper  is  here,  and  after  the  speakers  pres- 
ent have  addressed  you,  if  you  wish,  I  shall  be  glad  to  read  his  paper  on 
'Social  Control  of  Industrial  Warfare.' 

Several  Interesting  Addresses  Follow 

Although  the  American  Mining  Congress  may  fairly  claim  to  have 
mothered  the  U.  S.  Bureau  of  Mines  in  its  infancy,  yet  the  child  has  out- 
grown its  parent,  but  considerately  retains  its  early  charge,  so  it  is  but 
natural  for  us  to  hear  tonight  from  our  first  cousin,  Dr.  F.  G.  Cottrell,  of 
the  Bureau  of  Mines,  who  will  now  address  you. 

[Dr.  Cottrell's  paper  will  be  found  on  page  305  of  the  Proceedings.] 

THE  CHAIRMAN:  I.  believe  we  were  all  convinced  last  evening  by 
Senator  Smith  of  Kansas  that  much  good  can  come  out  of  that  State. 
The  next  speaker  was  formerly  attorney-general  of  Kansas,  and  is  now 
general  counsel  of  the  National  Lumber  Manufacturers'  Association.  T 
have  great  pleasure  in  introducing  to  you  General  L.  C.  Boyle  of  Wash- 
ington, who  will  speak  to  you  on  the  subject  of  'Industry  and  the  Gov- 
ernment.' 

[An  abstract  of  General  Boyle's  address  appears  on  page  412  of  the 
Proceedings.] 


12  REPORT  OF  PROCEEDINGS 

THE  CHAIRMAN:  The  text  of  the  address  that  was  to  be  delivered 
by  Mr.  W.  G.  Merritt,  attorney  for  the  League  for  Industrial  Rights,  is 
here.  It  is  entitled  'Social  Control  of  Industrial  Warfare.' 

[Mr.  Merritt's  paper  will  be  found  on  page  419  of  the  Proceedings.] 

THE  CHAIRMAN:  I  think  the  Secretary  has  some  announcements  to 
make. 

Thereupon  the  Secretary  announced  the  names  cf  the  Committee  on 
Resolutions  as  under: 

Resolutions  Committee 

Alaska E.    B.    Gray 

Arizona J.  E.  Curry 

California • W.  J.  Loring 

Connecticut H.  J.  Stander 

Colorado Horace  F.  Lunt 

District  of  Columbia Robt.  G.  Wilson 

Idaho Ravenal    McBeth 

Indiana Philip    Penna 

Illinois   James  Needham 

Kansas F.  E.  Doubleday 

Massachusetts H.  P.  Baker 

Michigan Leslie  P.   Barrett 

Minnesota Robert  D.  Longyear 

Missouri C.  W.  Wright 

Montana C.   H.    Clapp 

Nebraska C.  H.  Simmons 

Nevada   Henry  Rives 

New  Jersey L.  C.  Bales 

New  Mexico G.  A.  Caseman 

New    York Robert    Linton 

Ohio  Frank  E.  Wells 

Oklahoma   A.  E.  Dunlap 

Oregon Edward    Boyce 

Pennsylvania    Edwin  W.   Parker 

Philippine   Islands Arthur   F.    Fischer 

South  Dakota William  S.  Elder 

Texas    S.   H.  Warrell 

Utah   Walter  Fitch 

Washington   J.   M.  Elmer 

West  Virginia George  Wolfe 

Wisconsin   Eugene  F.  Yahr 

Wyoming H.  C.  Marchant 

THE  CHAIRMAN:  There  being  no  further  business,  this  General  Ses- 
sion will  stand  adjourned  until  2  o'clock  tomorow  afternoon. 


THE  AMERICAN  MINING  CONGRESS  13 

FOURTH  GENERAL  SESSION 

WEDNESDAY,  NOVEMBER  17,  1920,  2  P.  M. 

PRESIDENT  BUCKELEY  WELLS:  The  fourth  general  session  will 
now  be  in  order.  The  presiding  officer  of  the  afternoon  needs  no  intro- 
duction to  members  of  the  Mining  Congress.  Mr.  Carl  Scholz  is  a  former 
president  and  a  present  director,  and  has  always  been  a  faithful  and  a 
hard  worker  for  the  Congress.  It  is  a  real  pleasure  and  a  privilege  to 
have  him  here  to  preside  over  this  session. 

MR.  SCHOLZ:  The  first  order  of  business  will  be  announcements  by 
the  Secretary. 

SECRETARY  CALLBREATH:  We  have  some  resolutions  to  be  intro 
duced  and  presented. 

(The  Secretary  read  resolutions  No.  1  to  7,  inclusive.) 

CHAIRMAN  SCHOLZ:  Are  there  any  more  resolutions  to  be  offered? 
If  not,  we  will  proceed  with  the  regular  program.  Colorado  in  general, 
and  Denver  particularly,  has  always  been  famous  for  its  blue  sky,  and  for 
the  benefit  of  the  ladies  who  are  here,  we  have  here  with  us  a  speaker 
who  will  tell  the  other  side — Mr.  A.  G.  MacKenzie  of  Salt  Lake  City— 
who  will  tell  us  what  he  means  by  controlling  blue-sky  legislation. 

Blue-Sky  Legislation 

MR.  MACKENZIE:  The  members  of  the  Committee  on  blue-sky  legis- 
lation are  not  agreed  on  some  of  the  points  considered.  We  are  present- 
ing, therefore,  two  short  reports,  the  first  one,  which  is  signed  by  Sidney 
Norman  of  Spokane,  and  myself,  as  follows: 

"We  have  given  much  time  to  the  study  of  the  blue-sky  question,  with 
particular  attention  to  the  results  following  the  enactment  of  laws  on  the 
subject  in  the  Western  States.  Our  conclusion  is  that  in  general  such 
legislation  has  failed  in  its  purpose  to  protect  the  ignorant  and  unwary, 
and  has  in  many  instances  seriously  impeded  legitimate  development  of 
mines  and  other  natural  resources.  It  is  a  noteworthy  fact  that  most 
blue-sky  laws  operate  to  the  prejudice  of  the  State  home  citizens,  while 
leaving  an  open  door,  through  the  United  States  mails,  to  residents  of 
other  States. 

"Development  is  the  only  infallible  way  to  prove  a  mining  prospect;  no 
man  can  say  with  certainty  that  a  surficial  showing  does  or  does  not  mean 
the  existence  of  a  mine.  Development  requires  capital,  and  in  almost 
every  case  where  a  prospect  has  been  converted  into  a  mine,  the  cost 
has  been  met  through  small  contributions  from  the  many.  Large  corpo- 
rations do  not  engage  in  prospecting;  they  leave  that  to  the  small  in- 
vestor, led  by  the  small  promoter.  It  is  therefore  essential  that  such 
forces  of  capital  be  not  closed  through  unduly  restrictive  legislation. 


14  REPORT  OF  PROCEEDINGS 

"Although  proponents  of  blue-sky  laws  always  emphasize  their  desire  to 
treat  all  industries  alike,  it  is  evident  that  they  always  have  in  mind  cor- 
porations formed  to  develop  natural  resources,  although  these  are  not 
invariably  the  ones  most  in  need  of  regulation.  The  situation,  however, 
must  be  accepted  as  it  exists,  and  in  out  judgment  calls  for  affirmative 
action  by  representatives  of  the  mining  industry. 

"We  believe  that  the  American  Mining  Congress  should  view  squarely 
the  virtues  and  shortcomings  of  mining,  and  to  aid  in  their  correction — 

"This  Committee  recognizes  that  unscrupulous  promoters  have  fre- 
quently used  mining  corporations  as  a  means  to  defraud,  and  that 'this 
practice  is  s-till  more  or  less  prevalent  in  non-mining  communities.  It  is 
conceivable  that  such  people  desire  and  need  a  measure  of  protection,  and 
naturally  turn  to  blue-sky  legislation.  Undoubtedly  there  is  much  justifi- 
cation for  the  sour  disapproval  with  which  mining  securities — good  as 
well  as  bad — are  viewed  in  many  places,  and  this  Committee  believes  it  is 
up  to  the  mining  man,  through  the  national  organization,  to  declare 
unequivocally  for  any  proposal  that  will  help  legitimate  mine  promotion. 

Investors  Should  Investigate  Prospects 

"In  the  Western  mining  States  themselves  blue-sky  laws  are  not  neces- 
sary, and  undoubtedly  at  times  work  hardships  on  reputable  men  and 
legitimate  propositions.  Any  competent  person  in  the  West  can  easily 
learn  the  truth  about  a  project  in  his  own  State,  and  no  law  will  save 
the  incompetent  from  his  own  folly.  Moreover,  it  has  been  abundantly 
demonstrated  that  local  blue-sky  laws  do  not  stop  the  operation  of  the 
crook.  He  merely  has  to  lie  low  while  the  law  is  new,  and  presently, 
after  the  blue-sky  officials  have  settled  themselves  comfortably,  you  find 
him  doing  business  in  the  same  old  way,  except  that  now  he  has  the 
document  from  the  State  to  lend  plausibility  to  his  misrepresentations. 

"We  believe  that  blue-sky  legislation  should  attempt  nothing  more  than 
the  enactment  of  rigid  laws  against  fraud  and  misrepresentation;  the 
establishment  of  agencies  easy  of  access,  where  the  investor  can  obtain 
reliable  information  or  file  his  complaints;  and  prompt  prosecution  and 
punishment  of  the  dishonest.  Drastic  legislation,  establishing  commis- 
sions or  bureaus,  with  power  arbitrarily  to  approve  or  disapprove  securi- 
ties, should  be  opposed. 

Federal  Legislation  Desirable 

"We  recommend  that  the  Mining  Congress  favor  desirable  Federal 
legislation  on  this  subject,  and,  in  connection  therewith,  the  repeal  of  all 
State  legislation  that  conflicts  with  or  parallels  such  Federal  laws.  Our 
idea  of  such  a  Federal  statute  is  that  it  shall  provide  for  authenticity  of 
each  corporation  in  its  originating  State  through  some  designated  Fed- 
eral representative,  and  that  upon  filing  the  required  information  under 
oath  the  corporation  shall  receive  a  license  permitting  it  to  solicit  capital 
in  any  part  of  the  United  States.  Such  legislation  would  be  doubly  bene- 
ficial by  reducing  fraud  and  opening  a  maximum  field  of  capital  for  invest- 
ment in  legitimate  enterprises. 


THE  AMERICAN  MINING  CONGRESS  15 

"We  have  not  undertaken  more  than  the  general  outline  of  the  plan, 
leaving  details  for  further  attention.  We  believe  that  with  the  aid  of 
existent  Federal  agencies,  such  as  the  Post  Office  and  the  Department  of 
Justice,  a  law  based  on  the  broad  plan  indicated  can  be  satisfactorily 
worked  out;  and  we  also  believe  that  the  American  Mining  Congress 
should  endorse  the  plan  as  a  constructive  movement  to  better  the  indus- 
try. We  have  prepared  a  resolution  in  conformity  with  the  foregoing, 
which  will  be  presented  to  the  Convention." 

The  following  report  is  by  Messrs.  M.  B.  Tomblin  of  Colorado  and 
Robert  I.  Kerr  of  California,  members  of  the  Committee: 

Prime  Object  of  Blue-Sky  Laws 

"The  object  of  all  honestly  conceived  blue-sky  legislation  is  primarily, 
if  not  wholly,  for  the  purpose  of  protecting  the  uniformed  and  credulous 
investor,  who  admittedly  does  not  possess  the  business  intelligence  to 
protect  himself.  To  this  extent  it  is  class  legislation;  and  it  must  be 
recognized  that  whatever  regulatory  laws  are  enacted  to  protect  such 
investor,  might  to  a  greater  or  lesser  extent  hamper  and  restrict  legiti- 
mate enterprises.  To  fail  to  take  into  consideration  these  basic  princi- 
ples in  enacting  blue-sky  legislation  must  inevitably  result  in  confusion 
and  the  restriction  of  legitimate  enterprise. 

"We  favor  sane  and  reasonably  regulatory  State  laws  to  protect  the 
weak  and  credulous,  but  believe: 

"First,  that  such  legislation  should  undertake  nothing  more  than  rigid 
laws  for  the  prevention  of  fraud  and  misrepresentation. 

"Second,  the  designation  of  some  agency,  preferably  some  office  already 
established,  where  complaints  can  be  filed,  and  in  case  of  violation  prose 
cution  is  compulsory. 

"We  are  opposed  to  the  creation  of  a  Federal  bureau  empowered  to 
license  or  authorize  the  sale  or  transfer  of  securities,  believing  that  all 
such  legislation,  if  effective,  must  necessarily  be  cumbersome  and  re- 
strictive, and  furthermore  would  more  or  less  conflict  with  State  regu- 
latory laws  now  in  force."  (Applause.) 

CHAIRMAN  SCHOLZ :  The  next  item  on  the  program  is  an  address  by 
Judge  E.  C.  Finney,  member  of  the  United  States  Board  of  Appeals,  Inte- 
rior Department,  representing  the  Secretary  of  the  Interior. 

MR.  FINNEY:  The  subject  assigned  to  me  is  the  administration  or 
interpretation  of  the  United  States  mining  laws.  It  is  a  pretty  large  sub- 
ject, and  I  cannot  cover  it  in  15  minutes.  It  has  many  phases.  One  of 
them  is  the  matter  of  administration  where  we  have  conflicts  or  contests 
between  two  or  more  persons  claiming  the  same  mine  or  land. 

I  do  not  think  that  the  American  Mining  Congress  is  particularly 
interested  in  that  phase  of  the  administration  of  the  law.  I  take  it  that 
you  are  more  so  concerned  in  the  general  administration  of  the  law,  those 
phases  with  which  the  rank  and  file  have  to  deal,  and  those  which  are 


16  REPORT  OF  PROCEEDINGS 

ex  parte  in  their  nature,  which  have  liberal  views  for  encouraging  develop- 
ment. I  might  start  this  by  saying  that  I  believe  in  a  liberal  administra- 
tion of  the  mining  law.  It  occurred  to  me  that  some  of  you  might  be 
interested  in  knowing  briefly  how  these  laws  are  administered  by  the 
Interior  Department,  particularly  in  view  of  the  resolution  just  intro- 
duced in  this  Congress,  urging  that  the  Interior  Department  be  retained, 
in  order  that  it  might  administer  those  laws. 

Four  Interesting  Addresses  Follow 

[Mr.  Finney's  paper  will  be  found  on  page  358  of  the  Proceedings.] 

CHAIRMAN  SCHOLZ:  The  next  item  on  the  program  is  one  on  which 
opinions  largely  differ.  I  find  that  at  taxpaying  time  we  have  two  classes 
of  people:  those  who  like  to  pay  taxes  and  those  that  do  not.  The  former 
usually  have  none  to  pay;  the  latter  are  those  that  earn  money.  I  take 
pleasure  in  presenting  Mr.  James  G.  Fitch,  who  will  address  you  on  the 
subject  of  'State  Taxation  of  Metal  Mines.' 

[Mr.  Fitch's  paper  will  be  found  on  page  348  of  the  Proceedings.] 

CHAIRMAN  SCHOLZ:  We  have  with  us  a  man  who  is  telling  us 
something  strange  and  new,  and  that  is  the  mining  of  coal  without 
powder,  and  I  take  pleasure  in  introducing  to  you  Mr.  D.  Vance  Sickman. 

[Mr.  Sickman's  paper  will  be  found'  on  page  334  of  the  Proceedings.] 

CHAIRMAN  SCHOLZ:  Before  proceeding  to  the  last  item  on  the  pro- 
gram, the  Secretary  has  some  announcements  to  make. 

(Announcements  by  Mr.  Burns;  also  reading  resolutions  later  marked 
No.  10,  introduced  by  the  Gold  Committee;  also  reading  of  resolution 
later  marked  No.  11,  introduced  by  H.  H.  Schwartz.) 

CHAIRMAN  SCHOLZ:  We  will  now  call  on  Dr.  A.  L.  Murray  of  the 
U.  S.  Bureau  of  Mines,  Washington,  D.  C.,  to  give  us  the  concluding 
address  on  industrial  medicine  and  health  conservation. 

DR.  MURRAY:  The  title  of  the  paper  I  am  presenting  is:  'The  Ap- 
plication of  Industrial  Medicine  and  Health  Conservation  in  the  Develop- 
ment of  Mine  Labor  Efficiency.' 

[Dr.  Murray's  paper  will  be  found  on  page  323  of  the  Proceedings.] 

CHAIRMAN  SCHOLZ:  This  concludes  our  program.  Mr.  MacKenzie 
has  a  resolution  he  would  like  to  present. 

A  Co-operative  Prospecting  Scheme 

MR.  MACKENZIE:  I  am  sorry  I  haven't  with  me  some  notes  on  this. 
This  is  the  idea  of  the  co-operative  prospecting  scheme,  which,  of  course, 
is  not  new.  In  this  document  you  will  find  a  resolution  of  the  Salt  Lake 
Commercial  Club  favoring  a  movement  in  the  interest  of  the  small  pros- 
pector, and  to  develop  a  financial  organization  along  the  lines  of  the  old 
prospector's  grubstake,  and  particularly  along  the  lines  suggested  in  the 


THE  AMERICAN  MINING  CONGRESS  17 

plan  of  the  Associated  States  Development  Co.,  which  plan  has  been 
investigated  by  the  mining  division  of  the  Salt  Lake  Commercial  Club  and 
recommended  by  it  to  the  board  of  governors  of  the  club.  This  is  simply 
a  continuation  of  the  co-operative  plan  of  grubstaking.  You  have  had  it 
here  in  Colorado,  of  course,  and  in  all  the  Western  mining  States.  These 
people  have  formed  a  parent  company,  which  controls  the  operation  of 
what  they  call  their  local  companies.  They  have  established  so  far  seven 
or  eight  of  the  local  companies;  I  am  speaking  in  general  terms,  because 
I  am  not  in  any  way  associated  with  them.  The  prospector  or  the  claim- 
holder  brings  his  proposition  to  the  local  company,  which  investigates  it 
on  the  ground  and  makes  its  recommendation  to  the  parent  company, 
which,  in  turn,  decides  whether  the  property  shall  be  taken  up  and  devel- 
oped sufficiently  to  determine  whether  it  is  a  mine  or  not.  The  parent 
company,  instead  of  selling  stock,  sells  what  it  calls  "grubstake  con- 
tracts," by  which  each  investor  agrees  to  put  in  a  certain  sum  monthly 
for  a  period  of  ten  years,  and  he  participates  in  proportion  to  the  amount 
of  his  subscription.  As  I  recall  it  now,  the  parent  company,  in  addition  to 
directing  the  management,  retains  10%  of  the  proceeds  of  the  "grubstake 
contracts"  to  cover  the  maintenance  of  the  parent  company's  offices  and 
the  necessary  overhead  and  general  expense. 

CHAIRMAN  SCHOLZ:     The  session  now  stands  adjourned. 


FIFTH  GENERAL  SESSION 

NOVEMBER  17,  1920,  8  P.  M. 

Mr.  Thomas  T.  Brewster  of  St.  Louis  presided. 

THE  CHAIRMAN:  The  conference  will  be  in  order.  Are  there  any 
resolutions  to  present? 

MR.  CALLBREATH:  There  are  a  few  resolutions:  Shall  I  present 
them? 

THE  CHAIRMAN:     If  you  will,  please. 

(Thereupon  the  Secretary  read  the  resolution  presented  by  the  Tax 
Conference  Committee,  as  follows) : 

THE  CHAIRMAN:  Under  the  rules  and  order  of  business,  the  resolu- 
tions are  received  and  referred  to  the  Committee  on  Resolutions  without 
debate. 

Are  there  any  further  communications?  (No  response.)  The  first 
speaker  of  the  evening  will  be  the  Hon.  Robert  N.  Miller,  recently  solicitor 
of  the  Internal  Revenue  Department,  who  desires  to  discuss  the  necessity 
of  the  taxpayer  taking  firm  action  in  order  to  secure  proper  adjudication 
of  excise. 


18  REPORT  OF  PROCEEDINGS 

HON.  ROBERT  N.  MILLER:  I  entered  the  U.  S.  Treasury  as  a  war- 
time helper  about  the  time  when  the  1917  tax  returns  were  being  filed. 
Teii  months  ago  I  went  back  to  my  own  business,  and  I  have  no  connec- 
tion with  the  Government  at  all  now.  During  my  service  I,  like  all  the  other 
fellows  who  were  charged  with  trying  to  straighten  out  that  terrific  war- 
time tangle,  the  taxes,  worked  not  only  every  day,  but  practically  every 
night.  That  was  true  not  only  of  our  department,  but  it  was  true  in 
many  of  the  departments,  even  in  the  City  of  Washington,  which  had 
previously  gained  a  well-deserved  reputation  as  the  "City  of  Magnificent 
Delays."  (Laughter.)  In  war-time  there  was  a  vast  amount  of  real  work 
done  there. 

The  Tax  Problem 

When  we  went  there  and  saw  the  problem  that  these  taxes  presented, 
getting  an  unprecedented  amount  of  money  out  of  the  country's  industries 
and  the  irregularities  of  the  tax  law,  our  hearts  almost  failed  us.  I  felt 
very  much  like  an  old  Kentucky  colored  man  I  know  about:  His  boss  saw 
him  with  his  head  all  tied  up  and  his  arm  in  a  sling,  and  asked  him  what 
was  the  matter.  He  said  that  he  went  hunting  the  day  before  and  there 
was  snow  on  the  ground,  and  without  knowing  it  some  snow  had  got  in 
the  end  of  the  gun.  He  went  on,  "I  saw  a  rabbit  and  I  aimed  the  gun  at 
him,  and,  do  you  know,  boss,  the  minute  I  pulled  that  trigger  I  know'd 
I'd  done  wrong."  (Laughter.) 

I  believe  nearly  every  man  that  went  to  Washington  to  try  to  help  out 
on  the  taxes  after  he  had  been  there  a  week  wished  somebody  else  had 
that  job;  after  he  was  there  a  month  he  was  sure  of  it.  Yet  somebody 
had  to  do  that  work. 

It  is  perhaps  worth  while  to  speak  briefly  about  your  taxes.  Somewhere 
in  Washington  there  is  a  small  group  of  men,  maybe  two  or  three,  who 
have  a  file  of  papers  that  represent  your  particular  tax  return.  They  are 
either  working  on  it,  or  they  are  working  hard  on  somebody  else's  so  as 
to  get  to  yours.  They  may  be  concluding,  right  now,  that  you  owe  $500,000 
more  in  taxes  for  the  past  year,  which  you  have  .not  paid.  That  is  a  very 
unhappy  kind  of  thing  to  say  on  a  pleasant  occasion  like  this,  and  yet  it 
is  true;  and  it  is  a  part  of  the  situation  that  makes  necessary  this  reso- 
lution which  has  just  been  adopted.  If  they  reach  such  a  conclusion,  they 
will  not  assess  you  at  once,  of  course;  they  will  give  you  a  hearing— and 
it  will  be  a  real  hearing— if  you  want  it ;  and  if  you  require  an  appeal,  you 
can  have  that  to  men  who  are  higher  up,  men  who  have  great  responsi- 
bilities and  are  willing  to  take  a  little  more. 

Millions  of  Tax  Returns 

If  you  were  to  enter  a  part  of  the  great  buildings  of  the  Bureau  of 
Internal  Revenue  right  now,  where  millions  of  tax  returns  have  to  be  gone 
over,  and  were  able  to  find  the  right  place,  you  could  observe  the  very 
auditor  who  is  working  on  your  return.  In  your  conference  with  this  man, 
who  has  charge  of  your  tax  case,  he  would  try  to  get  your  ideas,  and  he 
would  show  you  his  views  of  the  law  as  applied  to  your  case,  and  you 
would  probably  not  like  his  ideas.  In  nine  cases  out  of  ten,  however,  that 


THE  AMERICAN  MIXING  CONGRESS  19 

man  will  listen  with  interest  to  your  side,  and  with  a  fairly  op^u  mind. 
There  is  perhaps  one  auditor  in  ten  who  no  matter  how  hard  he  has  been 
worked,  still  thinks  he  knows  it  all,  but  if  you  rim  into  that  man  you  can 
always  go  to  his  boss  and  at  least  get  a  hearing  from  him. 

The  Bureau  is  trying  hard  to  solve  this  great  problem,  and  still,  in  spite 
of  that  very  honest  endeavor,  war  taxes  have  been  oppressively  heavy, 
and  final  determination  of  tax  liability  has  been  intolerably  delayed.  We 
all  know  that. 

Tax  on  the  Wasting  Industries 

Those  war  taxes,  heavy  as  they  were  on  the  whole  of  industry,  laid  an 
unusually  heavy  hand  on  wasting  industries — such  as  mining — treating 
them  as  though  they  involved  no  more  risk  than  the  ordinary,  stay-at- 
home,  sit-down-at-the-desk  kind  of  industry.  These  laws  were  severe,  yet 
these  were  the  best  that  the  best  men  available  could  devise  considering 
the  emergency,  yet  in  spite  of  the  best  attempts  of  the  Bureau  of  Internal 
Revenue,  the  laws  are  responsible  for  real  hardship.  The  terrific  yield 
they  demanded — the  big  percentage  of  the  earnings  of  the  country — 
emphasized  the  injustices.  The  inflexibility  of  the  law  did  not  give  the 
Commissioner — did  not  give  anybody — the  right  just  to  be  "fair."  They 
had  to  follow  the  law.  This  made  it  impossible  to  collect  11  billions  of 
dollars  of  taxes  in  21/£  years,  more  money  than  had  been  collected  from 
internal  revenue  in  the  whole  history  of  the  United  States  before,  and 
still  make  it  easy  or  light,  or  even  tolerable.  The  wonder  is,  as  we  look 
back  on  those  things,  that  it  could  be  done  at  all  without  actually  destroy- 
ing business. 

But  the  war  is  over.  The  crying,  the  immediate  present  need,  as  that 
resolution  declares,  of  every  business  of  whatever  kind  right  now  is  to 
find  out,  once  and  for  all,  what  its  taxes  are  today.  The  suspense  in  some 
cases  is  terrible,  destructive  of  opportunity  and  fatal  to  successful  opera- 
tions. These  delayed  audits  make  it  difficult  for  the  banks  of  the  country 
to  be  sure  of  the  net  worth  of  any  business,  since  it  is  possible  for  them 
to  issue  an  additional  assessment,  changing  an  apparently  comfortable 
surplus  into  a  deficit.  Tt  is  rather  a  desperate  situation.  The  Bureau  of 
Internal  Revenue,  I  am  perfectly  satisfied,  knows  that,  and  indeed  the 
Bureau  knows  it,  in  some  ways,  better  than  the  individual  taxpayers  do, 
because  at  Washington  they  see  every  day  new  instances  of  hardship. 
The  Bureau  cannot  help  it.  Congressional  action  is  necessary  and  ought 
to  be  taken  as  an  emergency  provision  to  clear  this  matter  now  while  it 
is  needed.  Your  own  efficient  and  alert  Tax  Division,  long  before  I  knew 
anything  about  what  it  was  doing,  saw  that  clearly  and  have  been  working 
on  it,  and  this  resolution  presented  here  tonight  is  the  result  of  many 
weeks  of  work  on  their  part.  I  do  not  believe  that  any  business  man  who 
reads  it  can  fail  to  be  interested  in  seeing  that  work  go  ahead.  To  my 
mind  there  are  two  things  that  ought  to  be  done  right  away  by  Congress: 

How  the  Confusion  Could  be  Cleared  Up 

First — Provide  the  Commissioner  of  Internal  Revenue  with  sufficient 
funds  to  pay  salaries  to  attract  and  hold  an  adequate  number  of  men 


20  REPORT  OF  PROCEEDINGS 

capable  of  dealing  with  these  difficult  questions  with  confidence  and  self- 
reliance.  Decisive  and  broad-minded  action  cannot  be  secured  in  any 
business  without  paying  for  it.  Men  who  have  the  knowledge  and  experi- 
ence to  carry  such  responsibility  do  not  have  to  hunt  for  jobs;  such  men 
are  pursued  by  people  who  want  to  employ  them.  There  are  men  in  that. 
Department  who  rank  favorably  in  ability  with  the  ablest  accountants 
and  technical  men  in  the  United  States.  In  the  legal  department  there  are 
lawyers  of  unusual  ability.  These  men  must  pass  upon  questions  involv- 
ing millions  of  dollars.  Many  of  them  are  underpaid.  The  best  of  them 
are  constantly  receiving  offers,  based  upon  their  experience  and  their 
administrative  ability,  in  multiples  of  what  they  earn  now.  Sooner  or 
later  they  leave  the  service;  a  lot  have  already  done  it.  They  ought  to  be 
paid  enough  to  make  them  stay.  But  what  are  two  or  three  dozen  such 
good  men  when  there  are  millions  of  returns  to  audit  every  year?  Some 
of  the  single  returns,  in  the  Consolidated  Section,  involve  more  than  a 
hundred  corporations,  each  with  its  own  peculiar  theoretical  problems. 
One  able,  experienced  man  can  do  the  work  of  five  inexperienced  men, 
and  keep  them  profitably  at  work  when  they  are  not  otherwise  employed. 
Some  taxpayers  ask  me  why  beginners  won't  do  just  as  well.  The  fact 
is  that  in  the  Government  service  nobody  has  the  courage  to  make  rulings 
in  the  taxpayer's  favor,  except  the  man  who  knows  what  he  is  doing. 

Second — Some  method  must  be  provided — and  your  Tax  Conference  has 
suggested  one  in  the  resolution  just  brought  up  here — by  which  you  and 
other  taxpayers  may  get  a  prompt  and  final  determination,  closing  for 
ever  the  tax  liability  for  the  year  in  question,  as  it  cannot  be  closed  under 
the  present  law  unless  actual  fraud  or  misfeasance  is  shown  to  have  been 
committed.  The  plan  is  to  give  this  power  of  final  closing  (with  the  tax- 
payer's consent)  to  a  special  emergency  body  of  able  men,  with  com- 
pensation for  the  limited  period  of  their  service — one  year — in  a  sum 
commensurate  to  the  responsibility. 

Training  of  Auditors 

If,  during  your  visit  to  the  Bureau,  you  came  across  the  auditor  who 
had  charge  of  your  case,  or  the  head  of  that  division,  or  the  head  of  the 
great  Income  Tax  Department,  and  you  were  to  say  to  him,  "Why  don't 
you  work  faster  and  finish  up  for  good  this  mass  of  old  cases?"  he  would 
say  that  about  a  year  ago  the  Bureau  saw  this  great  need,  and  especially 
planned  to  have  enough  well-equipped  auditors  in  the  Consolidated  Return 
Section.  They  would  not  be  any  good,  even  if  they  started  as  pretty  good 
accountants,  until  they  had  four  or  five  months'  training.  The  auditor 
would  also  tell  you  how  they  started  on  that  program  and  worked  about 
a  month,  and  then  they  didn't  have  money  enough  to  go  ahead  with  it. 
That  is  the  kind  of  thing  that  we,  as  business  men,  have  to  correct,  be- 
cause we  are  on  both  sides.  We  are  taxpayers,  and  we,  taken  together, 
compose  the  Government  that  is  collecting  these  taxes.  Congress  can 
and  will  solve  these  difficulties  if  the  necessary  support  is  given. 

Finally,  I  want  to  say  that  I  have  appreciated  very  much  what  I  have 
learned  from  the  able  and  broad-minded  men  with  whom  I  have  had  the 


THE  AMERICAN  MINING  CONGRESS  21 

good  fortune  to  come  in  contact  during  the  few  days  I  have  been  here.  I 
thank  you  for  the  privilege  of  addressing  you,  who  are  connected  with 
an  industry  which,  in  spite  of  the  hazards,  has  managed  to  pay  between 
9%  and  10%  of  the  total  amount  of  taxes  paid  the  Government  by  all 
other  corporations  put  together.  (Applause.) 

THE  CHAIRMAN:  I  take  pleasure  in  introducing  Mr.  George  Wolfe, 
secretary  of  the  Winding  Gulf  Operators'  Association  of  West  Virginia, 
who  will  address  you  on  'A  Survey  of  the  Conditions  of  Operation  and 
Production  in  the  So-Called  Open-Shop  Districts.' 

[Mr.  Wolfe's  paper  appears  on  page  315  of  the  Proceedings.] 

THE  CHAIRMAN:  We  heard  last  night  of  the  small  beginnings  and 
the  great  growth  of  the  U.  S.  Bureau  of  Mines.  We  have  with  us  a  gen 
tlemen  who  was  largely  instrumental  in  building  the  solid  foundation 
upon  which  that  great  superstructure  has  been  raised.  Dr.  E.  W.  Parker, 
now  director  of  the  Anthracite  Bureau  of  Information,  will  tell  us  what 
happened  to  the  anthracite  industry  in  1920. 

[Dr.  Parker's  address  appears  on  page  303  of  the  Proceedings.] 

MR.  CARL  SCHOLZ:  Your  speakers'  committee  had  arranged  to  have 
Governor  Cornwall  of  West  Virginia  address  you  on  this  subject,  but,  due 
to  his  occupation  in  fighting  strikes  and  riots  under  conditions  similar  to 
those  which  invoked  the  injunction  we  are  about  to  discuss,  he  was  pre- 
vented from  coming.  Mr.  Wolfe  has  ably  told  you  what  the  Winding  Gulf 
Operators'  Association  has  done,  and  the  Governor  wanted  to  tell  you  what 
steps  he  had  taken  in  opposing  the  aggressive  action  of  the  miners' 
organization  in  the  territory  tributary  to  the  Norfolk  &  Western. 

T..e  United  Mine  Workers 

Mr.  Wolfe  and  Mr.  Parker  have  covered,  to  a  large  extent,  my  own  ideas 
when  discussing  the  closed-shop  problem.  But,  referring  to  this  injunc- 
tion, it  may  be  necessary  to  go  back  to  the  early  history  of  the  miners' 
movement,  which  began  at  the  Chicago  meeting  in  1898,  at  which  a  col 
lective  contract  was  made  for  the  States  of  Pennsylvania,  Indiana,  Illinois 
and  Ohio.  The  United  Mine  Workers  had  gradually  extended  their  activi- 
ties, and  for  many  years  have  cast  their  eye  on  West  Virginia.  By  degrees 
they  entered  the  Kanawha,  Northern  and  Fairmont  districts,  but  so  far 
have  not  been  successful  in  the  region  of  the  Norfolk  &  Western.  The 
position  that  the  Norfolk  &  Western  operators  took  to  the  Union  was 
v  ell -founded.  They  saw  the  oppressive  measures  that  the  miners'  organ- 
ization had  adopted  in  the  Kanawha  district,  and  they  felt  that  their  men 
did  not  care  to  join  them.  Mr.  Wolfe  has  set  forth  the  argument  that  85% 
of  the  miners  are  well-meaning  men,  and  the  remainder  are  trouble- 
makers. 

I  see  in  this  audience  several  men  who  were  on  the  other  side  of  the 
fence  at  one  time,  and  who  are  now  on  the  operators'  side.  They  did  not 
come  to  our  side  except  as  a  matter  of  principle. 


22  REPORT  OF  PROCEEDINGS 

Union  Dues  and  the  Check-Off 

The  closed  shop  is  a  subject  with  which  everybody  is  more  or  less 
familiar,  but  not  many  know  to  what  extent  the  miners  carry  it.  1  am  not 
going  to  burden  you  with  it  now,  because  you  are  to  hear  it  from  one  of 
the  ablest  men  we  have  today.  Besides,  the  bill  and  answer  in  the  injunc- 
tion suit,  which  I  referred  to,  will  be  published  in  the  Proceedings,  but  I 
would  like  to  call  attention  to  it  because  I  know  you  will  find  it  interesting 
and  instructive.  I  only  want  to  say  now  that  the  'check-off'  is  a  subject 
on  which  many  are  not  informed.  The  check-off  is  the  means  that  the 
miners'  organization  has  used  to  force  the  employers  to  collect  union  dues 
from  the  membership  at  large.  In  other  words,  no  man  can  be  employed 
in  a  mine  where  the  closed  shop  prevails  unless  he  pays  the  check-off;  it 
'".  compulsory  upon  him,  and  he  must  pay  it  or  quit.  In  a  mine  that  I 
operate  in  Illinois  our  rates  were  $6.50  per  man  last  month,  and  this,  for 
the  number  of  men  employed,  amounts  to  approximately  $50.000  per  annum. 
You  can  see,  therefore,  why  the  miners  should  seek  to  establish  the  check- 
off system.  Coal  mining  is  the  only  industry  in  which  the  employer  col- 
lects from  the  members  for  the  organization.  Ostensibly  it  is  a  voluntary 
contribution,  but  as  a  matter  of  fact  it  is  compulsory  to  the  last  degree. 
That  all  men  are  not  members  of  the  union,  and  have  no  desire  to  become 
so,  is  well  known  to  the  operators  who  come  in  close  contact  with  them. 

Although  the  Labor  candidate  for  West  Virginia  was  very  popular  at 
the  last  election,  and  caused  the  population  at  large  some  concern — it  was 
confidently  expected  that  he  would  be  elected — yet  when  the  election 
returns  came  in,  the  very  communities  that  furnished  the  largest  number 
of  delegates  to  his  meetings  returned  few  votes  in  his  favor.  This  shows 
that  West  Virginia  is  not  controlled  by  class  votes. 

Inasmuch  as  this  bill  is  to  be  published,  I  will  not  say  anything  more, 
except  to  thank  you  for  the  kind  hearing  you  have  given  me.  (Applause.) 

The  Fuel  Administration 

THE  CHAIRMAN:  The  next  speaker  on  our  list  requires  no  introduc- 
tion to  coal  men.  During  the  early  part  of  the  war  there  was  a  wonderful 
piece  of  machinery  built  up  known  as  the  Fuel  Administration.  Its  gears, 
and  some  parts  of  the  machine  were  very  heavy,  and  for  some  peculiar 
reason  the  machinery  ran  backwards.  Upon  overhauling  and  final  investi- 
gation it  was  found  that  the  design  was  faulty,  in  view  of  the  fact  that 
there  was  no  master  pinion  to  drive  the  gears.  Therefore,  Dr.  Garfield 
got  Mr.  J.  D.  A.  Morrow,  then  general  secretary  of  the  National  Coal  Asso- 
ciation, and  now  its  executive  vice-president.  During  the  war  Mr.  Morrow 
performed  a  wonderful  service  in  pointing  out  the  condition  and  making 
a  great  map  of  the  general  coal  situation  so  that  coal  could  be  mobilized 
and  moved  right  along.  Since  that  time,  and  recently  in  the  recent  diffi- 
culties in  the  East,  Mr.  Morrow  has  performed  similar  service.  Mr.  Mor- 
row will  speak  to  you  on  'The  General  Coal  Situation.' 

[Mr.  Morrow's  address  appears  on  page  43(i  of  the  Proceedings.] 


THE  AMERICAN  MINING  CONGRESS  23 

ANNUAL    MEMBERS'   MEETING   AND   ELECTION   OF 

OFFICERS 

Members  of  the  American  Mining  Congress  assembled  at  9.30  o'clock 
Thursday  morning,  November  18,  1920,  in  the  Magnolia  room  of  the 
Albany  Hotel,  President  Wells  in  the  chair. 

After  calling  the  meeting  to  order,  the  President  called  for  the  finan- 
cial report  of  the  Secretary,  which  was  read  by  Mr.  Callbreath,  together 
with  the  report  of  the  auditor,  which  was  accepted  and  approved. 

Election  of  Nominating  Committee 

PRESIDENT  WELLS:  The  next  order  of  business  is  the  election  of  a 
nominating  committee.  The  chair  will  receive  in  nomination  five  names 
to  constitute  a  nominating  committee  to  select  names  for  your  consider- 
ation for  the  offices  of  directors  vacant  at  this  time.  The  following  Com- 
mittee on  Nominations  of  Directors  was  elected:  E.  P.  Mathewson,  A.  G. 
Mackenzie,  Edwin  Higgins,  A.  Cressy  Morrison,  P.  H.  Penna  and  George 
L.  Nye. 

MR.  GEORGE  L.  NYE:  I  should  like  to  withdraw,  as  it  will  be  impos 
sible  for  me  to  serve.  That  will  leave  five  names,  and  I  move  that  nomi- 
nations be  closed,  and  the  Secretary  be  authorized  to  cast  a  ballot  for  the 
other  five.  (Motion  unanimously  carried.) 

PRESIDENT  WELLS:  The  Nominating  Committee  may  at  once  pro- 
ceed to  select  names  to  offer  to  this  meeting,  five  in  number,  for  the 
vacancies  on  the  Board  of  Directors. 

SECRETARY  CALLBREATH:  Perhaps  it  would  be  well  to  state  to 
the  Committee  that  those  retiring  as  directors  are  Walter  Douglas,  Samuel 
A.  Taylor,  L.  A.  Friedman,  Charles  S.  Keith  and  Carl  Scholz. 

PRESIDENT  WELLS:  The  Secretary  wishes  to  present  to  you  gentle- 
men some  matters  relating  to  possible  revision  or  readjustment  of  initia 
tion  fee  and  annual  dues. 

Mining   Congress  Finance 

SECRETAY  CALLBREATH:  The  question  of  the  support  of  the  work 
of  the  American  Mining  Congress  is  something  which  appeals  to  all  of  ire 
who  are  interested  in  the  work,  and  those  others  who  have  signified 
their  interest  by  becoming  members.  When  the  American  Mining  Con- 
gress first  established  its  headquarters  in  this  city,  in  1906,  the  member- 
ship dues  were  $2  per  year,  the  admission  fee  being  $5  at  that  time.  We 
had  on  the  membership  roll  approximately  200  men  under  obligation  to  pay 
us  $2  per  year,  which  would  have  netted  a  total  sum  of  $400,  and  not  more 
than  half  of  those  then  on  the  list  ever  did  pay  the  $2.  It  was  seen  at 
once  that  it  was  necessary  to  have  more  substantial  support  than  could 
possibly  come  from  a  $2  membership,  and  therefore  a  meeting  of  the 


24  REPORT  OF  PROCEEDINGS 

members  was  called  in  this  city,  at  which  the  vote,  with  one  exception, 
was  unanimous,  to  increase  the  membership  dues  from  $2  to  $10  per  year. 
At  that  time  no  special  service  was  being  rendered.  It  "was  proposed  to 
carry  on,  as  far  as  might  be  possible,  the  original  aspiration  of  the  Mining 
Congress,  to  seek  Federal  aid  for  the  mining  industry.  At  that  time  it 
was  believed  we  could  get  this  by  virtue  of  the  vast  importance  of  the 
mining  industry,  but  later  we  found  that  we  were  asked  "if  you  have  grown 
so  important  without  governmental  aid,  why  do  you  need  governmental 
aid?"  We  had  then  to  demonstrate  to  Congress  that  it  was  the  need  of 
the  mining  industry  for  the  benefit  of  the  country,  and  that  its  growth 
had  not  reached  its  proper  proportions,  and  it  needed  governmental  aid 
to  solve  its  problems.  At  that  time  no  publications  of  any  kind  went  to 
the  members  except  the  proceedings  of  the  annual  conventions.  As  time 
has  gone  on  we  have  established  the  Mining  Congress  'Journal'  as  a 
medium  through  which  we  could  tell  the  story  of  official  Washington  to 
our  members.  That  has  grown  to  a  point  where  it  is  thought  by  some  of 
our  members  to  be  of  some  value.  And  we  expect,  incidentally,  to  increase 
its  usefulness  in  your  behalf.  We  have  a  difficult  factor  to  meet  which 
you  gentlemen  may  not  quite  understand,  and  that  is,  we  had  to  keep 
entirely  out  of  the  field  of  technical  publications.  It  would  have  been 
easy  to  have  filled  our  'Journal'  with  technical  articles,  but  in  doing  that 

The  Congress  'Journal' 

we  were  invading  the  field  of  mining  journals,  and  we  wanted  to  keep 
entirely  out  of  that  field.  We  have  tried  to  keep  absolutely  out  of  the  field 
of  the  American  Institute  of  Mining  Engineers  and  other  technical  organ- 
izations. It  is  our  desire  to  occupy  a  separate  field  entirely  our  own,  not 
only  as  to  our  journal,  but  as  to  all  our  work.  The  'Journal'  has  been 
given  without  any  additional  charge  than  that  embodied  in  the  $10  fee. 
More  recently  we  have  established  a  news  service,  by  which  we  gather 
important  news  relating  to  the  mining  industry,  and  send  out  a  weekly 
bulletin.  These  publications  have  gotten  to  the  point  that  the  actual  cost 
of  the  printing  and  postage  we  furnish  to  our  members  is  in  excess  of  the 
$10  annual  dues.  In  other  words,  as  it  stands  today,  our  members  are  a 
liability  and  not  an  asset  financially.  They  are  a  great  asset  with  refer- 
ence to  our  standing  before  the  world  and  the  influence  that  we  may  exert, 
but  from  a  financial  standpoint  they  are  a  liability.  Some  months  ago, 
after  we  established  this  weekly  news  service,  which,  as  you  understand, 
i%  duplicated  on  the  mimeograph  and  is  more  or  less  expensive,  I  had  pre- 
pared a  letter  to  send  to  our  members  which  I  first  submitted  to  Mr.  Wfclls. 
He  put  it  in  his  portfolio  for  proper  attention.  It  reached  him  just  before 
he  went  to  the  mine  at  Telluride,  and,  leaving  it  there,  the  shafthouse 
caught  fire,  and  when  they  came  back  not  only  the  shafthouse  had  burned, 
with  the  copy  of  my  letter— which  was  a  special  loss— but  the  wind  swept 
down  the  valley  with  such  force  that  you  couldn't  find  a  particle  of  ash 
on  the  spot  which  once  contained  this  building.  I  want  to  say  right  here 
if  I  could  have  my  own  wishes  followed,  with  all  respect  to  any  other 
president  of  the  organization,  I  should  make  Bulkeley  Wells  president  of 


THE  AMERICAN  MINING  CONGRESS  25 

the  American  Mining  Congress  for  life.  (Applause.)  No  man  could  have 
been  more  useful,  more  helpful,  more  ready  always  to  meet  the  responsi- 
bilities of  his  office,  more  ready  always  to  seek  help  on  the  outside,  with- 
out inspiration,  advice  or  suggestion  from  the  home  office,  to  reach  out 
and  build  up  the  organization.  You  know  from  the  statement  that  I  have 
read,  showing  the  support  of  this  organization  to  have  grown  from  five. 
six  or  seven  thousand  a  year  to  one  hundred  and  fifty  thousand  a  year. 
there  is  somebody  who  has  had  to  do  with  it  besides  the  secretary.  I 
don't  give  the  president  the  credit  for  all  of  that,  but  I  do  give  him  credit 
for  most  masterly  and  magnificent  work  in  behalf  of  the  Congress. 

Membership  of  the  American  Mining  Congress 

I  feel  that  we  want  a  large  increase  in  our  membership;  we  ought  to 
have  a  membership  of  5000  instead  of  approximately  2500.  We  ought  to 
have  a  great  increase  of  our  personal  membership,  and  I  think  as  well 
that  the  membership  ought  to  pay  a  little  larger  dues;  just  what  that 
should  be  I  do  not  know.  I  leave  it  to  you  to  say  what  you  think  ought 
to  be  done.  But  I  think  those  memberships  at  least  ought  to  be  made 
self-supporting.  We  should  have  an  increased  membership,  and  it  is  up 
to  you  to  assist  and  help  in  getting  others  to  join  the  organization,  be- 
cause we  know  there  are  10,000  or  15,000  people  in  this  country  who  might 
well  profit  by  the  work  of  the  Mining  Congress.  To  the  extent  that  we 
increase  our  membership,  our  influence  in  Washington  is  made  that  much 
stronger.  Somebody  has  said  that  we  were  lobbying  in  Washington.  You 
know  the  term  lobbyist  is  considered  more  or  less  discreditable.  I  do  not 
believe  that  there  is  any  reason  why  members  of  Congress  should  not  be 
approached  upon  a  matter  in  which  any  citizen  is  interested;  but  I  want 
to  say,  even  with  that  view  of  it,  the  American  Mining  Congress  does  not 
lobby.  When  the  members  of  Congress  and  Senators  want  any  informa- 
tion about  the  mining  industry  we  offer  to  prepare  it  for  them.  Some 
members  of  Congress  have  learned  that  when  they  want  some  informa- 
tion about  the  mining  industry,  about  any  phase  of  it,  if  they  will  apply  to 
our  office  we  will  immediately  get  busy  and  find  it  for  them.  We  have 
not  yet  been  able  to  create  that  agency  through  which  we  can  gather  all 
this  information.  We  have  a  Bureau  of  Mining  Economics.  We  have 
spent  considerable  money  on  it,  and  need  to  spend  more,  but  we  do  not 
undertake  to  gather  the  statistics  that  are  collected  by  the  Bureau  of 
Mines,  the  Geological  Survey,  the  Department  of  Commerce  or  the  Census 
Bureau;  those  agencies  are  open  to  us  at  any  time,  so  we  can  find  all  the 
statistics  they  have  gathered.  But  there  are  gaps  in  between;  there  are 
statements  of  a  different  character;  there  are  statements  that  do  not  seem 
to  dovetail;  and  when  a  member  of  Congress  seeks  information  and  finds 
that  the  departments  have  prepared  their  statistics  from  different  angles 
he  is  confused  and  does  not  know  what  to  do. 

Information  Procured  When  Desired 

The  Mining  Congress  is  trying  to  put  itself  in  position  with  members  of 
Congress  so  that  they  will  realize  we  are  there  to  serve  them — to  give 


26  REPORT  OF  PROCEEDINGS 

them  any  information  they  may  want,  and  by  virtue  of  that,  tie  up  the 
mining  industry  with  the  members  of  Congress.  One  thing  we  try  to  do 
above  all  others  is  to  preserve  the  reputation  of  the  Mining  Congress  for 
absolute  fairness,  for  broad,  impartial  treatment  of  questions  relating  to 
the  mining  industry;  that  we  are  impersonal,  that  we  do  not  represent 
any  one  agency  or  any  one  interest;  that  we  are  working  for  the  broad 
industry  as  a  whole;  and  because  of  that  reputation,  I  believe  we  have 
been  able  to  exercise  a  greater  influence  than  would  otherwise  be  possible. 
Our  office  simply  tells  Congress  the  facts.  They  have  yet  to  make  up 
their  minds.  Should  there  be  a  difference  of  opinion  based  on  all  the 
facts,  and  after  that  if  we  find  that  a  member  of  Congress  is  undecided 
in  his  mind,  some  of  you  gentlemen  know  how  we  have  appealed  to  you 
to  take  this  matter  up  direct.  We  present  the  facts,  and  then  when  you 
come  in  and  ask  that  a  certain  thing  be  done  they  have  the  facts  which 
justify  your  request.  So,  gentlemen,  we  feel  anxious  there  shall  be  a  large 
increase  in  our  membership;  we  want  everybody  interested  in  mining 
upon  a  broad  and  impersonal  plane  to  be  tied  up  with  the  Mining  Congress 
so  that  we  may  have  your  influence. 

Higher  Dues  and  Revised  By-Laws 

That  brings  us  to  the  question  of  whether  or  not  our  dues  should  be 
advanced,  and  I  think,  Mr.  President,  there  are  other  things  in  our  by- 
laws that  ought  to  be  amended.  Our  by-laws  were  drawn  for  conditions 
which  do  not  exactly  harmonize  with  the  present  situation.  I  make  this 
talk  with  the  idea  in  mind,  Mr.  President,  of  making  a  motion  that  there 
shall  be  a  committee  appointed,  perhaps  of  three,  and  I  hope  somewhere 
near  our  office,  so  we  can  advise  with  them,  who  shall  take  up  the  ques- 
tion of  the  revision  of  the  by-laws,  which  may  be  submitted  back  to  our 
members  for  approval  or  rejection.  I  therefore  move  that  a  committee 
shall  be  appointed  for  the  purpose  of  revising  or  drafting  a  form  of  pro- 
posed revision  of  the  by-laws  to  be  submitted  to  the  membership.  I  thank 
you,  gentlemen,  for  listening  to  me.  (Applause.) 

PRESIDENT  WELLS:  Mr.  Callbreath,  is  this  in  your  thougnt,  that 
this  committee  also  deal  with  the  matter  of  annual  dues? 

SECRETARY  CALLBREATH:  Yes,  the  by-laws  provide  for  annual 
dues,  and  therefore  no  change  can  be  made  without  their  amendment. 

PRESIDENT  WELLS:  Well,  you  really  need  a  report  from  that  com- 
mittee, shall  we  say  with  respect  to  the  dues  at  least,  at  the  general  ses- 
sion tomorrow  morning  in  order  to  have  action  by  the  members. 

SECRETARY  CALLBREATH:  No,  we  have  no  power  here  to  amend 
the  by-laws.  While  we  have  proxies  enough  to  constitute  a  quorum  to  act 
on  other  things  that  submission  will  have  to  be  by  letter  direct  to  every 
member,  so  every  member  will  have  an  opportunity  to  vote. 

PRESIDENT  WELLS:     How  will  you  have  that  committee  appointed? 


THE  AMERICAN  MINING  CONGRESS  27 

SECRETARY  CALLBREATH:     By  the  Chair. 

PRESIDENT  WELLS:  Then  your  motion  is  that  the  Chair  appoint  a 
committee  of  three  to  confer  upon  and  report  to  the  directors  upon  the 
revision  of  the  by-laws,  with  a  view  to  their  submission  to  the  members 
for  approval  or  rejection. 

The  motion  was  unanimously  carried. 

PRESIDENT  WELLS:     Is  the  Nominating  Committee  ready  to  report? 

New  Directors  Elected 

MR.  E.  P.  MATHEWSON:  We,  the  undersigned,  your  Committee  on 
Nominations,  beg  respectfully  to  submit  the  following  names  as  our  unani- 
mous Choice  for  directors  of  the  American  Mining  Congress  for  the  forth- 
coming term: 

James  A.  Douglas,  metal  mining,  Arizona; 
Robert  Linton,  metal  mining,  New  York; 
W.  J.  Loring,  metal  mining,  California; 
Carl  Scholz,  coal  mining,  West  Virginia,  and 
Hugh  Shirke,  coal  mining,  Indiana. 

Motion  was  made,  seconded  and  unanimously  carried  that  the  Secretary 
be  authorized  to  cast  the  unanimous  ballot  for  the  names  proposed  by  the 
Nominating  Committee  to  fill  vacancies  on  the  Board  of  Directors. 

SECRETARY  CALLBREATH:  Mr.  President,  in  accordance  with  your 
resolution,  I  have  cast  the  unanimous  ballot  of  the  members  present  for 
the  election  of  director  for  the  term  of  three  years  as  follows:  James  A. 
Douglas,  Robert  Linton,  W.  J.  Loring,  Carl  Scholz  and  Hugh  Shirke. 

PRESIDENT  WELLS:  The  Secretary  having  cast  the  ballot  present- 
ing the  unanimous  vote  of  this  meeting  for  the  names  as  read,  these  gen- 
tlemen are  declared  elected  directors  of  the  Mining  Congress. 

Gentlemen,  I  am  very  sincerely  appreciative  of  the  applause  which  you 
offered  in  response  to  Mr.  Callbreath's  kindly  tender  of  this  office,  but  it 
seems  to  me  it  is  a  little  harsh  to  inflict  a  life  sentence  upon  me,  even 
at  Mr.  Callbreath's  suggestion,  as  a  penalty  for  burning  one  letter  from 
him.  My  desk  at  present  is  entirely  buried  under  letters  from  Callbreath 
and  Burns,  and  there  will  be  a  great  conflagration  when  this  meeting  is 
over. 

The  meeting  thereupon  adjourned. 


28  REPORT  OF  PROCEEDINGS 

ANNUAL  BANQUET 

NOVEMBER  18,  1920 

PRESIDENT  WELLS:  Ladies  and  Gentlemen:  I  have  a  message  from 
Marion,  Ohio.  (Applause.)  This  is  worth-while: 

Wire  From  President-elect  Harding 

"My  dear  Mr.  Wells:  I  have  to  thank  you  for  your  invitation  to  the 
23rd  Annual  Convention  of  the  American  Mining  Congress,  and  express 
my  regrets  that  it  will  be  impossible  for  me  to  accept. 

"My  regrets  are  the  more  keen  because  your  meeting  will  bring  together 
a  body  of  men  with  which  I  am  anxious  to  take  counsel  in  outlining  the 
policies  of  the  next  administration. 

"I  am  aware  of  the  difficulties  that  confront  the  mining  industry  of  the 
country,  and  would  be  glad  of  the  opportunity  to  familiarize  myself  with 
some  of  the  details. 

"It  is  my  hope  and  belief  we  will  presently  be  brought  to  realize  that  the 
tendency  to  reaction  and  industrial  depression  is  only  momentary. 

"Not  only  is  our  country  sound  and  secure,  but  it  is  the  world's  main- 
stay and  hope.  We  have  been  through  a  trying  period  in  which  the 
national  policy  and  aspiration  have  been  misinterpreted  and  misjudged. 

"We  have  now  had  a  convincing  demonstration  of  the  real  attitude  of 
the  American  people,  and  it  will  not  fail  to  reassure  both  our  own  people 
and  the  rest  of  the  world,  which  so  greatly  needs  our  steadfast  support 
and  aid. 

"A  mighty  effort  will  be  required  of  us  to  meet  the  demands  that  a 
recovering  world  will  impose. 

"In  no  direction  will  these  demands  be  more  pressing  than  in  supplying 
those  necessaries  of  life  and  reconstruction  that  must  come  from  the 
richness  of  American  mines. 

"With  wisdom  and  deliberation  such  as  we  hope  to  secure  by  dint  of 
enlisting  the  aid  of  such  expert  authorities  as  your  own  organization  repre- 
sents, I  believe  we  shall  place  our  country  and  its  industries  once  more 
on  the  high  road  of  prosperity  and  success.  To  that  end  you  may  be 
assured  that  every  energy  and  effort  of  the  new  administration  will  be 
directed. 

"Please  be  good  enough  to  convey  to  the  Congress  and  all  its  members 
the  assurance  of  my  pleasure  in  receiving  your  invitation;   and   of  my 
wish  to  serve  you,  in  common  with  every  worthy  American  interest. 
"Most  sincerely  yours, 

"WARREN  G.  HARDING." 

(Applause.) 


THE  AMERICAN  MIXING  CONGRESS  29 

Presentation  to  the  Secretary 

PRESIDENT  WELLS  (continuing) :  Members  of  the  American  Mining 
Congress:  It  has  been  my  privilege  to  serve  as  your  president  for  the 
past  two  years.  If  I  have  accomplished  a  little  in  strengthening  and 
enlarging  our  organization,  it  has  been  due,  99%,  to  the  sincere,  never- 
failing  co-operation  of  the  active  organization  at  Washington;  and  at  the 
head  and  directing  that  organization  is  Mr.  Callbreath.  As  a  slight  expres- 
sion of  my  personal  appreciation  of  his  loyalty  through  all  these  years, 
and  more  particularly  during  the  last  two  years,  I  have  the  greatest 
pleasure  in  handing  him  this  little  souvenir. 

MR.  CALLBREATH:  Mr.  President,  Ladies  and  Gentlemen:  This  is 
indeed  a  great  surprise.  To  have  had  the  loyal  support  of  such  a  presi- 
dent as  Bulkeley  Wells  is  enough  reward  for  any  man,  I  don't  care  who  he 
may  be.  To  have  had  the  loyal  support  of  the  splendid  men  who  have 
been  associated  with  Bulkeley  Wells  as  president  of  the  American  Mining 
Congress  is  enough  reward  for  any  man.  But  I  surely  appreciate  this  won- 
derful token,  this  elegant  Shriners'  pin,  with  a  diamond  center.  I  shall 
wear  it  with  most  sincere  pleasure,  and  recall  all  of  the  pleasant  relations 
which  have  existed  between  the  Secretary's  office  and  the  President  of 
this  organization,  which,  under  his  leadership,  has  made  strides  during 
these  two  years  which  the  fourteen  years  before  that  we  were  not  able  to 
make.  Following  that  leadership,  I  feel  that  the  American  Mining  Con 
gress  has  grown  so  steadily  that  it  can  now  stand  and  say  that  it  is  today 
one  of  the  most  influential  organizations  in  the  United  States  for  the  up- 
building of  its  industries,  for  the  protection  of  its  men  and  women,  and 
for  the  betterment  of  all  conditions  in  all  society  of  the  United  States. 
(Applause.)  I  sincerely  desire  to  express  my  sincere  appreciation  of  this 
gift,  which  comes  to  me  in  a  very  surprising  but  touching  way. 

Something  has  been  said  here  about  reconstruction.  Something  is  said, 
as  it  occurs  to  me,  that  in  view  of  the  fact  that  this  country  has  gone 
upon  a  prohibition  basis — I  am  reminded  somewhat  of  the  statement 
made  concerning  Bishop  Wilmer  of  Alabama,  who  for  many  years  was 
quite  an  inveterate  smoker.  His  parishioners  told  him  that  it  was  not 
quite  becoming  for  a  Bishop  of  a  church  to  be  seen  smoking  upon  the 
streets,  so  for  a  long  time  he  went  along,  apparently,  without  smoking. 
One  day  he  appeared  upon  the  streets  smoking  an  elegant  cigar,  and  some- 
tody  said,  "Why,  Bishop,  I  thought  you  quit  smoking?"  "No,  no,  I  just 
quit  lying." 

The  American  Mining  Congress  may  be  somewhat  lax  or  slow  in  ex- 
pressing this  appreciation,  but  it  always  in  the  end  does  so. 

Life  Membership  Presented  to  D.  W.  Brunton 

I  am  thinking  of  a  man  who  had  ordered  a  carload  of  lumber,  and  the 
people  from  whom  it  was  ordered  telegraphed  back  to  him  that  this  car 
of  lumber  would  be  shipped  as  soon  as  he  had  paid  for  the  previous  car. 
His  wire  was  in  reply:  "Cancel  the  order;  I  can't  wait  so  long."  The 
by-laws  of  the  American  Mining  Congress  permit  our  Board  of  Directors 


30  REPORT  OF  PROCEEDINGS 

each  year  to  select  one  man  as  an  honorary  member  of  the  Mining  Con- 
gress. Thus  far  in  our  history  three  records  of  that  kind  have  been 
made,  and  the  last  that  was  made  is  the  one  to  whom  I  want  to  present 
tonight  this  certificate  of  membership,  Mr.  D.  W.  Brunton.  I  take  great 
pleasure  in  presenting  to  him  this  certificate  of  honorary  life  membership 
to  the  American  Mining  Congress.  (Applause.-) 

CHAIRMAN  WELLS:  This  is  important:  Biologists,  geologists,  and 
even  mining  engineers  are  all  agreed  that  a  dog  to  attain  the  true  canine 
prestige,  and  to  realize  that  he  is  a  dog,  must  have  at  least  one  flea,  and 
so  it  is  with  a  banquet,  it  must  have  one  toastmaster.  I  take  pleasure  in 
introducing  Mr.  Thomas  B.  Stearns.  (Applause.) 

MR.  STEARNS:  Ladies  and  Gentlemen:  In  my  early  youth,  many 
years  ago,  sitting  at  the  knee  of  my  Sunday-school  teacher,  I  was  taught 
one  of  the  many  old  Biblical  sayings:  "The  wicked  flee  when  no  man 
pursueth."  This  is  the  first  time  in  my  life  that  I  have  been  referred  to 
as  a  parasite,  but  I  am  quite  willing  to  be  anything  in  connection  with  this 
wonderful  organization  to  whose  success  our  president  has  contributed  so 
much.  (Applause.) 

Adulation  of  Water 

At  first  I  thought  this  toast  was  to  be  to  water,  and  this  is  really  what 
your  president  intended  to  say  when  he  rose  to  his  feet:  "The  purest  and 
best  of  all  things  that  God  created  is  water."  I  have  noticed  it  tonight;  I 
have  seen  it  glisten  in  tiny  tear-drops  on  the  sleeping  lids  of  infancy;  I 
have  seen  it  trickle  down  the  blushing  cheeks  of  youth,  and  going  in 
rushing  torrents  down  the  wrinkled  cheeks  of  age;  I  have  seen  it  in  tiny 
dew-drops  on  the  blades  of  grass  and  the  leaves  of  trees;  I  have  seen  it 
trickle  down  the  mountainsides  in  tiny  rivulets,  and  so  on;  but  tonight 
we  have  seen  water  circulating  from  wall  to  wall,  and  your  president  bids 
you  godspeed,  and  drink  deep  and  drink  long. 

The  first  speaker  of  the  evening  is  a  gentleman  whom  we,  in  Colorado, 
call  a  friend.  He  has  done  yeoman  work  for  this  State  during  the  last 
several  years  in  Washington,  and  we  are  going  to  ask  you  to  listen  to 
Senator  Charles  S.  Thomas.  (Applause.) 

SENATOR  THOMAS:  I  was  first  notified  that  my  subject  was  to  be 
'Industrial  Dishonesty,'  on  the  17th;  then  I  was  informed  that  I  was  ex- 
pected to  discuss  'Industrial  Honesty,'  on  the  18th.  However,  whether 
considered  from  the  first  or  second  standpoint,  the  topic  is  a  broad  one. 

Industrial  honesty  is  a  very  necessary  element  in  the  industrial  world, 
and,  like  a  great  many  necessary  elements,  it  is  sometimes  more  conspicu- 
ous for  its  scarcity  than  for  its  abundance,  and  its  absence  is  not  peculiar 
.to  any  section  of  the  social  and  economic  world. 

Current  Industrial  Dishonesty 

We  learn  from  investigations  in  the  City  of  New  York  that  the  leaders 
of  the  labor  unions  on  the  one  side,  and  a  combination  of  contractors  and 


THE  AMERICAN  MINING  CONGRESS  31 

material  men  upon  the  other,  were  engaged  in  levying  tribute,  by  way  of 
blackmail,  upon  the  building  interests  of  that  great  city;  and  about  the 
time  our  amazement  subsides  we  are  confronted  with  a  report  of  an  inves 
tigating  committee,  carried  on  in  the  City  of  Washington,  which  informs 
us  of  the  widespread  corruption,  fraud  and  robbery  which  has  character- 
ized the  activities  and  the  developments  of  the  Shipping  Board  from  the 
time  of  its  inception  to  the  present.  We  scarcely  digest  that  piece  of 
startling  information  before  our  eyes  encounter  descriptions  of  a  train 
robbery  in  the  City  of  Omaha,  resulting  in  much  loss,  concocted  and  con- 
ducted by  boys,  the  oldest  of  whom  has  scarcely  yet  reached  his  majority. 
We  hear  of  strikes  for  higher  wages  and  for  shorter  hours  on  the  one 
hand,  and  of  stock  dividends  to  avoid  the  payment  of  income  taxes  upon 
the  other.  There  is,  therefore,  this  interplay  of  dishonesty  all  throughout 
society,  and  those  who  seem  to  be  the  most  virtuous  are  those  who,  in  the 
last  analysis,  are  perhaps  only  those  who  have  not  yet  had  an  opportunity 
to  apply  their  particular  calling. 

This  condition  is  certainly  a  very  unfortunate  one.  I  used  to  think  that 
all  men  were  more  or  less  dishonest,  and  I  think  I  can  say,  and  still  keep 
within  the  truth,  that  except  this  enlightened,  distinguished  and  virtuous 
audience,  every  man  and  women  in  the  United  States  gives  some  leeway 
to  his  inclination  and  his  interest  when  he  swears  to  his  assessment 
returns. 

Conditions  in  1862  and   1921 

This  brief  reference  to  some  of  the  disclosures  of  the  very  recent  past 
is  inclined  to  make  pessimists  of  us  all,  and  cause  us  to  wonder  whether 
the  old  rugged,  incorruptible  virtues  of  our  ancestors  have  not  disappeared 
from  their  degenerate  progeny,  and  whether  we  are  not  headed  staight 
for  industrial  destruction.  I  am  not  disposed  to  accept  that  conclusion, 
especially  when  recalling  some  of  the  chronicles  of  the  accounts,  and 
reading  of  similar  conditions  during  the  Civil  War,  and  the  period  of  re- 
construction immediately  succeeding.  That  has  been  an  interesting,  if  not 
a  pleasant  task  of  mine,  and  I  have  derived  a  sort  of  a  melancholy  pleasure 
in  discovering  that  there  were  just  about  as  many  thieves  and  scoundrels 
and  profiteers  and  combines  then  as  now,  the  only  difference  being  that 
the  developments  of  that  time  had  not  reached  that  period  of  evolution 
which  at  present  characterize  these  wholesale  methods,  but  a  difference 
is  simply  in  degree,  and  not  in  kind.  I  flatter  myself,  therefore,  that  as 
time  passes  perhaps  we  will  ourselves  return  to  the  old  ways,  when  the 
shell-shock  of  the  last  great  war  shall  have  subsided,  and  the  old  and 
homely  virtues  of  every-day  life  will  re-assert  themselves  and  we  become 
once  more  a  safe  and  a  sane  Republic. 

But  I  am  somewhat  perturbed,  ladies  and  gentlemen,  by  the  constant 
growth  of  the  tendency  of  this  generation  to  saddle  all  of  its  troubles, 
and  all  of  its  disappointments,  and  all  of  its  aspirations,  upon  the  broad 
shoulders  of  poor  old  Uncle  Sam.  In  the  early  days  of  the  Republic,  and 
even  up  to  a  period  of  twenty-five  or  thirty  years  ago,  the  individualism 
of  the  American  always  asserted  itself.  He  depended  upon  himself  and 


32  REPORT  OF  PROCEEDINGS 

took  the  loss  and  shouldered  the  blame  for  his  failures;  but  with  the 
growth  of  that  spirit  which  seeks  appropriations  from  the  Government, 
and  its  partnership  in  the  various  pursuits  of  man,  have  come  a  deteriora- 
tion of  individuality  in  America,  and  a  broadening  of  the  activities  of  the 
Government,  and  its  participation  in  nearly  all  the  pursuits,  as  well  as 
the  conduct,  of  men.  The  result  is  that  the  responsibilities  of  community 
life  in  our  cities  and  in  our  States  are  largely  disappearing.  They  are 
shifted  to  Washington,  and  the  Capital  of  the  nation  is  becoming  more 
and  more  the  county-seat  of  every  county  in  the  United  States.  Today, 
if  a  man  fails  in  business,  he  is  apt  to  blame  his  Government  for  it.  We 
have,  therefore,  more  statutes  regulatory  in  character,  and  applying  to  all 
of  the  relations  of  man  to  man,  than  are  beneficial  or  desirable.  Penalties 
have  multiplied  until  men  must  become  students  these  days  to  keep  from 
becoming  criminals,  and  what  perhaps  is  worse,  the  departments  of  Gov 
eminent,  under  their  rules  and  regulations  are  now  regulating  us  all,  and 
the  courts  are  enforcing  these  regulations  by  sending  us  to  jail  when  we 
even  unintentionally  disregard  them. 

What  may  Come  in  the  Future 

We  have  passed  the  18th  Amendment.  This  is  the  most  conspicuous 
illustration  of  the  transfer  of  the  State  police  powers  to  the  nation.  The 
investiture  of  the  Nation  with  such  a  supervisory  control  was  never 
dreamed  of  by  the  founders  of  our  Government.  I  am  not  complaining. 
I  am  glad  the  saloon  is  gone  forever,  but  the  attempted  enforcement  by 
Federal  authority  of  rules  and  regulations  regarding  the  subject  of  pro- 
hibition is  converting  50%  of  the  people  into  detectives  and  inspectors  and 
the  other  50%  into  liars  and  hyprocrites.  (Applause.)  And  when  we 
shall  give  you  the  20th  Amendment,  that  will  deprive  you  of  the  use  of  I 
tobacco,  cigars  and  coffee,  then  this  50%  who  are  now  the  victims  may, 
in  turn,  become  inspectors,  and  everybody  will  be  an  employe  of  the  Gov- 
ernment for  the  enforcement  of  the  law.  (Applause.) 

We  have  in  the  City  of  Washington,  according  to  a  recent  statement  in 
the  Detroit  newspaper,  125  lobbies,  one  of  which  has  my  friend  here  as  its 
head.    These  represent  many  interests,  some  of  them  industrial,  some  of 
them  political,  and  many  of  them  racial.    Every  one  is  there  to  get  what 
it  can  out  of  the  Treasury  of  the  United  States,  without  regard  to  the  wel- 
fare of  the  whole,  except  as  an  abstract  proposition,  and  without  regard! 
to  the  apparently  equally  important  demands  of  the  others.     Now,  fancy  ; 
125  separate  lobby  associations   marching  in  solid   phalanx   against  the 
Congress  of  the  United  States  and  its  Treasury.     Talk  about  industrial  \ 
honesty,  it  may  exist  in  such  an  atmosphere,  but  the  independence  o.'l 
your  Representative   and   Senator  becomes   impossible.     He   must   hav<r 
both  ears  to  the  ground  most  of  the  time,  and  his  eyes  at  the  key-hole  alii 
of  the  time.     He  will  be  influenced  in  legislation,  not  by  the  popular  wel-J 
fare,  not  from  the  standpoint  of  the  Republic,  but  in  proportion  as  th«j.j 
interests  which  are  brought  to  bear  upon  him  have  political  power.    Your  I 
representative  system  is  therefore  today  on  trial  as  it  never  was  before! 
and  the  time  is  rapidly  coming  when,  if  this  pressure  is  continued  am  I 


THE  AMERICAN  MINING  CONGRESS  33 

increased,  your  representatives  will  become  merely  delegates  to  register 
the  will  of  what  they  think  is  the  strongest  political  influence  of  the  par- 
ticular moment.  And  then  what  becomes  of  the  interest  of  the  United 
States?  That  is  today  a  minus  quantity  in  national  legislation.  No  one 
in  either  house  longer  stands  for  the  interest  of  America  as  against  the 
States  and  the  districts,  and  consequently  the  people  instinctively  turn 
to  the  President,  who  has  become  the  great  representative  of  the  United 
States,  that  political  entity  to  which  we  all  owe  allegiance;  because,  and 
only  because,  he  is  not  subjected  to  these  influences,  and  presumably 
stands  for  the  ideal  for  which  he  was  chosen,  the  interest  and  the  welfare 
of  this  great  Republic. 

Individualism  and  Paternalism 

I  have  spoken  about  the  effect  of  these  conditions  upon  individualism, 
and  individualism  is  the  foundation  of  American  progress.  Lord  Goshen 
once  declared  that  it  might  be  affirmed  that  the  confidence  of  the  indi- 
vidual in  himself  and  the  respect  of  the  Government  for  national  liberty 
constituted  the  foundation  of  the  growth  of  peoples,  the  wealth  of  commu- 
nities and  the  greatness  of  nations.  Individualism  cannot  thrive  in  an 
atmosphere  of  paternalism,  and  paternalism  is  the  inevitable  outcome  of 
this  constantly  growing  tendency  to  place  all  our  burdens,  our  woes,  our 
misfortunes  and  our  vocations  upon  the  Government  of  the  United  States. 
I  think,  therefore,  that  industrial  honesty  should  turn  itself  to  the  pro- 
motion of  individualism,  of  independence,  and  of  personal  and  corporate 
responsibility.  The  other  course  encourages  a  diffusion  and  division  of 
the  people  into  as  many  classes  and  organizations  as  there  are  races  and 
interests.  This  is  demoralizing;  for  without  unity  there  can  be  neither 
strength  nor  nationalism,  and  nationalism  is  an  absolute  essential  to  an 
avoidance  of  the  terrible  consequences  of  these  revolutionary  theories 
and  demands  which  today  constitutes  the  most  sinister  dangers  of  the 
future.  If  one  part  of  the  people  pull  in  one  direction,  another  in  another 
direction,  and  another  in  a  third,  the  cohesive  force  of  nationalism  is 
destroyed  and  leadership  disappears.  And  it  is  an  eternal  truth  in  his- 
tory that  the  collapse  of  every  civilization  has  been  preceded  by  the  col- 
lapse of  its  leadership.  The  thing  needed  in  America,  locally  and  nation- 
ally, is  independence  and  capable  leadership,  which  comes,  if  at  all, 
through  the  encouragement  of  individuality  and  a  recognition  of  the  duties 
that  every  citizen  owes  to  his  country,  that  such  duties  are  .not  only  a 
part  of  every  man's  business,  but  paramount  to  his  occupation,  whatever 
it  may  be.  Now,  you  cannot  love  your  country  as  you  should  and  at  the 
same  time  demand  and  compete  with  others  for  its  special  favors  and 
privileges. 

I  am  satisfied  my  fifteen  minues  have  elapsed.  You  know  that  a  Sen- 
ator has  no  terminal  facilities  when  it  comes  to  talking.  Yet  I  must 
recognize  the  gathering  frowns  upon  the  pleasant  countenance  of  my 
genial  friend  as  intimating  that  my  time  is  up.  (Applause.) 

MR.  STEARNS:  Ladies  and  gentlemen,  I  am  now  going  to  call  upon 
an  ex-president  of  the  Congress.  The  gentlemen  can  differentiate  by  hard 


34  REPORT  OF  PROCEEDINGS 

and  bitter  experience  between  moonshine  and  coal.  There  is  a  difference 
between  these  two  things;  one  warms  the  inner  man;  the  other,  the  outer. 
Each  produces  the  distillate,  which,  if  pursued  to  the  bitter  end,  is  fatal, 
and  each  lights  the  weary  way  of  humanity.  I  am  going  to  call  upon 
Mr.  Carl  Scholz. 

Moonshining   and   Mining 

MR.  SCHOLZ:  Mr.  Toastmaster,  ladies  and  gentlemen:  Inasmuch  as 
I  have  attended  a  meeting  of  the  directors  of  the  American  Mining  Con- 
gress today,  and  it  was  my  pleasure  to  nominate  its  next  president  in  the 
person  of  Mr.  W.  J.  Loring,  I  want  to  testify  to  the  unreliability  of  your 
toastmaster.  As  you  all  know,  on  July  first  of  the  past  year  the  legitimate 
sale  of  liquor  ceased  in  many  States  of  this  country.  To  you  in  Denver, 
of  course,  this  meant  nothing,  because  you  had  gone  dry  many  years 
before  and  have  been  dry  ever  since.  However,. it  cast  gloom  over  many 
of  the  people  who  did  not  expect  to  be  able  to  get  another  supply.  There 
is,  however,  a  small  family  of  moonshiners  in  West  Virginia  and  Kentucky 
who  viewed  this  day  with  much  pleasure,  because  they  saw  an  increase 
in  the  number  of  customers  for  their  wares.  Mining  men  are  always 
pioneers  in  the  line  of  civilization.  The  miner  goes  to  the  front  first  and 
discovers  the  mine,  and  the  others  follow  him.  Therefore,  it  is  the  oppor 
tunity  and  the  part  of  the  mining  engineer,  more  so  than  any  other,  to 
find  the  people  as  they  were  and  as  they  are.  Recently,  my  business  has 
taken  me  to  the  very  remote  sections  of  West  Virginia,  where  the  moon- 
shiners are  in  their  glory.  The  story  of  the  moonshiner  and  the  revenue 
officer  is  well  known  to  you.  Many  books  have  been  written  about  the 
moonshiner,  and  their  histories  are  closely  connected  with  the  Hatfields 
and  the  McCoys,  who  lived  in  the  remote  recesses  of  the  Allegheny  Moun- 
tains. You  have  something  to  learn  from  these  moonshiners,  and  I  think 
Mr.  Stearns  had  a  story  in  mind  in  calling  me  to  the  Chair,  one  I  related 
to  him  the  other  day. 

My  remarks  are  not  going  to  be  as  lengthy  as  those  of  Senator  Thomas, 
because  I  could  not  possibly  occupy  thirty  minutes,  but  this  is  interesting, 
nevertheless.  In  the  development  of  a  new  mine  I  noticed  that  on  the 
brightest  days  w«  had  the  least  men  available  for  work,  and  I  naturally 
inquired  where  they  were.  I  soon  found  out  that  all  our  men  had  small 
garden  patches  on  the  steep  hillsides,  which  they  had  to  attend  to.  They 
were  growing  corn,  which  they  expected  to  harvest  this  fall.  These  moon- 
shiners in  days  gone  by  were  trained  to  convert  their  corn  into  a  product 
that  could  be  more  easily  transported  than  metal,  because  the  mountains 
are  so  rugged  and  rough  they  cannot  very  well  get  over  them,  and  there- 
fore they  invented  the  process  of  moonshining.  As  a  result,  we  had  to 
make  an  order  that  no  man  would  be  allowed  to  drink  on  the  prem- 
ises. Shortly  thereafter  our  camp  one  night  was  invaded  by  a  number  of 
men  bringing  with  them  many  boxes  and  suitcases,  and  four  men  with 
pistols  who  said:  "We  are  here  to  sell,  you  are  here  to  buy — $2  a  quart," 
and  the  result  was  the  sale  of  16  quarts  in  15  minutes. 


THE  AMERICAN  MIXING  CONGRESS  35 

The  New  President  of  the  American  Mining  Congress 

Mr.  Toastmaster,  I  apologize  for  telling  this  story  again,  and  I  will  now 
surrender  to  the  real  president  of  the  American  Mining  Congress. 

MR.  STEARNS:  Ladies  and  gentlemen,  Mr.  Loring  is  to  preside  over 
the  destinies  of  the  Congress,  and  I  think  it  well  that  you  all  be  intro- 
duced, and  that  you  hear  a  word  from  him  now. 

MR.  LORING:  Mr.  Toastmaster,  members  of  the  American  Mining 
Congress,  ladies  and  gentlemen:  It  gives  me  great  pleasure  to  be  selected 
as  the  guiding  spirit  of  the  American  Mining  Congress  for  the  next  year, 
and  I  trust  that  it  may  be  my  pleasure  to  follow  with  success  in  the  steps 
of  my  predecessor,  Mr.  Bulkeley  Wells.  If  I  can  do  as  well  as  he  has 
done  I  shall  be  delighted,  and  I  trust  at  the  end  of  12  months  hence  I 
shall  be  received  as  cordially  as  he  has  been  received  tonight. 

I  am  a  long  way  from  home,  you  must  understand — I  came  from  Cali- 
fornia ;  came  here  just  as  an  ordinary  visitor  to  the  American  Mining  Con- 
gress, and  apparently  they  have  landed  me.  I  am  going  to  do  my  best,  and 
I  shall  expect  all  of  the  members  of  the  American  Mining  Congress  to 
assist  me  the  same  as  they  have  my  predecessor. 

A  Queer  Affair  in  California 

Now,  to  divert  just  a  moment:  I  have  heard  something  about  moon- 
shine. In  California  they  talk  about  Jackass  brandy.  If  there  are  any 
Californians  here  they  will  understand  what  that  is.  I  read  in  an  evening 
paper  not  long  ago  where  a  man  traveling  from  the  country  found  a  five- 
gallon  demijohn  of  this  brandy,  and  he  proceeded  to  take  some  of  it 
away.  It  went  to  his  head,  and  by  the  time  he  arrived  in  town  he  was 
pretty  well  off  his  head,  and  the  police  grabbed  him  and  put  him  in  jail; 
and  a  reporter  stated  that  the  last  he  saw  of  this  man  he  was  sitting  on 
his  bunk  trying  to  wag  his  ears. 

Now,  ladies  and  gentlemen,  I  am  not  going  to  take  up  15  minutes  of  your 
time,  or  30  minutes  of  your  time  talking  to  you,  but  I  think  that.  I  will 
probably  learn  how  to  talk  and  know  what  to  talk  about  within  the  next 
12  months,  and  if  you  will  pardon  me,  I  will  thank  you  very  kindly  for 
receiving  me  as  cordially  as  you  have. 

MR.  STEARNS:  Ladies  and  gentlemen,  I  am  now  going  to  call  on  a 
true  son  of  the  Golden  West.  We  have  here  a  gentleman  who  exemplifies 
the  advantages  of  the  education  of  a  mining  engineer.  There  is  probably 
no  education  that  fits  a  man  for  the  general  struggles  of  life  than  that. 
The  gentleman  I  am  going  to  introduce  has  been  a  mining  engineer,  but 
is  now  the  Governor  of  Nevada.  He  is  a  distinguished  member  of  the 
American  Mining  Congress — the  Hon.  Emmett  D.  Boyle. 

Presentation  to  Retiring  President 

GOVERNOR  BOYLE:  Mr.  Chairman,  ladies  and  gentlemen:  In  ad- 
vance of  any  remarks  I  may  make  in  accordance  with  the  set  program,  I 
am  going  to  request  our  friend,  Bulkeley  Wells,  ex-president  of  the  Amer- 


36  REPORT  OF  PROCEEDINGS 

ican  Mining  Congress,  to  stand  up.  I  have  been  accorded  the  privilege  of 
presenting,  on  behalf  of  this  association,  a  slight  testimonial  of  its  appre- 
ciation and  affection  for  'Buck'  Wells.  In  recognition  of  the  services  that 
he  has  rendered  humanity,  as  well  as  to  the  American  Mining  Congress, 
we  have  decided  to  supplant  his  Ingersoll-Rand  watch  with  something  that 
will  be  more  in  keeping  with  the  elegance  of  the  gentleman  who  is  to  wear 
it.  This  is  a  Denver  Rock  Drill  watch,  and  it  goes  to  him  to  remind  him 
that  there  is  such  a  thing  as  time,  that  element  which  has  touched  him 
so  lightly  in  the  glad  and  joyous  years  in  which  he  has  lived.  So  I  say 
that  on  your  behalf,  and  attempting  in  my  humble  way  to  voice  some 
measure,  in  some  slight  measure,  the  heartfelt  sentiments  of  affection  and 
appreciation  which  we  all  have  for  'Buck'  Wtells,  I  present  to  him  the  sub- 
stitute for  the  ancient  and  venerable  Ingersoll-Rand  in  the  presence  of 
everyone  in  this  assembly.  (Laughter.) 

MR.  WELLS:  Mr.  Toastmaster  and  gentlemen:  I  don't  know  whether 
the  ladies  contributed  to  this  at  all — we  have  no  lady  stockholders  in  the 
Denver  Rock  Drill  Co.,  I  am  sorry  to  say.  It  has  been  my  pleasure  to  do 
a  little  work — and  it  is  hard  nowadays  to  do  any  work — but  I  have  found 
men  in  the  American  Mining  Congress  who  apparently  and  professedly 
were  glad  to  work  with  me,  and  I  promise  you  that  I  have  been  glad  and 
happy  and  always  shall  be  to  work  with  the  members  of  the  American 
Mining  Congress.  I  thank  you  from  my  heart. 

MR.  STEARNS:  All  I  can  say  to  the  representatives  of  the  ancient 
Rand,  after  the  remarks  of  Governor  Boyle,  is,  "Watch  and  Wait."  I  am 
now  going  to  call  on  another  distinguished  man  of  California,  who,  for  six 
years  was  State  Geologist  of  Colorado,  and  a  gentleman  who  has  been 
very  prominent  in  all  the  mining  activities  of  this  country;  also  who, 
among  the  many  witnesses,  was  brought  into  this  remarkable  Minerals 
Separation  program  which  seems  to  have  created  so  much  excitement  dur- 
ing this  session.  I  present  to  you  Mr.  T.  A.  Rickard  of  the  Mining  and 
Scientific  Press  of  San  Francisco. 

Some  Jokes  Told  by  an  Editor 

MR.  RICKARD:  Mr.  Chairman,  ladies  and  gentlemen:  It  is  a  pleasure 
to  be  introduced  by  such  a  toastmaster.  As  you  will  have  observed,  he  is 
a  man  of  most  excellent  courtesy  and  most  unfailing  tact;  in  fact,  he  is  a 
good  deal  like  the  Irish  butler,  who  butted  into  the  bathroom  without 
knocking  at  the  door,  and  found  the  lady  of  the  house  in  the  bath;  where- 
upon, he  retreated  and  said:  "Excuse  me,  Sir."  The  "excuse  me"  stood 
for  courtesy,  and  the  "Sir"  for  tact.  (Laughter.) 

I  have  known  Mr.  Stearns  for  nearly  35  years.  On  one  occasion  I  had 
the  honor  of  being  introduced  at  a  gathering  of  this  sort,  and  I  was  pre- 
sented as  a  much  more  distinguished  and  a  much  better  known  man — Tex 
Rickard.  It  happened  in  Louisiana,  where  I  was  the  guest  of  James 
Douglas.  And  the  first  evening  there  while  we  were  dining  he  said  to  me: 
"We  are  going  to  have  a  meeting  in  the  town,  and  I  hope  you  will  come." 
I  said:  "Certainly,"  and  as  the  dinner  progressed  he  said  he  would  like 


THE  AMERICAN  MINING  CONGRESS  37 

to  have  me  speak.  I  said:  "Well,  I  will  try  to  do  that."  I  was  intro- 
duced to  the  chairman,  and  he  very  stupidly,  of  course,  introduced  me 
about  as  follows:  "Ladies  and  gentlemen,  I  have  great  pleasure  in  intro- 
ducing to  you  Mr.  Tex  Rickard,  who  will  now  address  you;"  whereupon 
I  stood  up  and  explained  to  the  audience  that  only  recently  my  boy  had 
come  back  from  school  and  had  asked  his  mother  and  myself  whether  by 
any  chance  we  were  related  to  Tex  Rickard;  and  when  I  said  we  were  not, 
he  was  visibly  disappointed.  Well,  my  little  talk  went  on,  and  the  lights 
went  out,  and  the  chairman  told  me  to  talk  until  the  lights  went  on. 
When  the  lights  came  on  I  sat  down,  and  I  said  to  a  representative  of  the 
Red  Cross  there,  a  lady:  "Very  funny,  my  introduction  as  'Tex'  Rickard." 
"Oh,  is  it;  who  is  he?"  "Well,"  I  said,  "he  is  a  prizefighter,"  whereupon 
she  said,  "I  think  you  would  do  that  very  well  also." 

The  chairman  has  referred  to  the  flotation  process  and  to  an  examina 
tion  before  the  Federal  Trade  Commission,  and  to  some  testimony  I  have 
given  before  that  Commission;  that  reminds  me  of  the  man  who  went 
through  the  third  degree.  The  police  commissioner  had  given  instructions 
and  had  left  the  room,  and  when  he  came  back  he  said:  "Did  you  do  it?" 
"Oh,  yes;  we  badgered  him  without  limit."  "And  what  did  he  do?"  "Well, 
he  became  kind  of  drowsy  and  said,  'Yes,  my  dear,  you  are  perfectly  all 
right.'  " 

Praise    for   the   Secretary 

The  toastmaster  has  been  good  enough  to  refer  to  my  association  with 
the  State  of  Colorado,  and  I  am  proud  of  it,  and  I  always  shall  be.  There 
is  another  association  between  this  American  Mining  Congress  and  the 
State  of  Colorado  upon  which  I  would  like  to  dwell  before  I  sit  down. 
This  Congress  was  cradled  in  Colorado,  and  the  hand  that  rocked  that 
cradle  was  that  of  J.  F.  Callbreath.  To  his  initiative,  perseverance,  per- 
sistence and  sincerity  this  Congress  has  become  great.  Therefore,  gentle- 
men, I  am  taking  the  oportunity  as  a  speaker  of  proposing  long  health 
and  happiness  to  Mr.  Callbreath. 

MR.  STEARNS:  It  is  plain  that  those  who  have  attended  this  Con- 
gress, coming  from  long  distances,  have  shown  their  enthusiasm  and  their 
loyalty,  but  I  want  to  say  that  there  is  present  from  Fairbanks,  in  Alaska, 
a  man  who  walked  175  miles  to  attend  this  session  of  the  American  Mining 
Congress  in  Denver,  so  I  will  ask  Mr.  Gray  to  say  a  word  to  you. 

MR.  GRAY:  Mr.  Chairman,  ladies  and  gentlemen:  There  is  one  thing 
I  will  say,  and  that  is,  in  the  next  five  or  ten  years  Alaska  will  come  for- 
ward and  be  a  great  factor  in  the  mining  industry.  We  have  the  biggest 
goldfields  in  the  United  States.  We  have  good  mines  there,  and  they  are 
going  to  be  opened,  and  Alaska  will  ask  for  the  golden  jubilee  Convention. 
I  thank  you  one  and  all. 

MR.  STEARNS:  One  of  the  shining  lights  of  the  engineering  and 
metallurgical  profession  in  this  country,  and  a  man  who  has  lived  in  dif- 
ferent parts  of  the  United  States— coming  to  us  originally  from  Canada— 


38  REPORT  OF  PROCEEDINGS 

one  who  is  familiar  with  the  ways  and  expressions  of  all  the  French- 
Canadians,  and  who  got  his  main  metallurgical  education  in  our  sister 
city  of  Pueblo,  Colo.,  is  Mr.  E.  P.  Mathewson.  While  I  am  unable  to 
relate  some  of  the  French-Canadian  dialect  anecdotes,  I  will  call  upon 
him  to  tell  some. 

Typically   Mathewsonian 

MR.  MATHEWSON:  Mr.  Toastmaster,  ladies  and  gentlemen:  I  am 
really  too  full  for  utterance.  We  have  been  besieged  with  water-bottles 
all  evening;  they  have  been  passed  around  to  all  the  tables;  flowers  have 
been  showered  upon  us;  we  have  heard  all  kinds  of  lovely  music;  and  we 
have  heard  our  past  president  sing.  I  thought  I  would  be  able  to  tell  you 
a  story  toriight,  but  our  toastmaster  has  taken  all  the  pep  out  of  me,  and 
I  don't  know  what  to  say.  If  you  will  bear  with  me,  I  will  relate  one  short 
Scotch  story.  (Thereupon  Mr.  Mathewson  told  a  typically  Scotch  yarn. 

MR.  STEARNS:  The  next  speaker  is  a  gentleman  from  the  East,  a 
man  who  occupies  a  very  prominent  position  in  the  railroad  world.  He 
has  a  message  that  he  intends  delivering  to  us  tomorrow  morning  at  some 
length,  but  he  has  kindly  consented  to  say  a  few  words  tonight:  Mr.  W. 
G.  Bierd,  president  of  the  Chicago  &  Alton  Railroad. 

MR.  BIERD:  Mr.  Toastmaster,  ladies  and  gentlemen:  Listening  to 
Senator  Thomas'  remarks,  I  was  impressed  with  the  suggestion  that  today 
we  all  look  to  our  Government  either  to  correct  or  improve  any  part  or 
all  of  our  ills.  That  is  about  the  beginning,  and  perhaps  the  reason  for 
my  being  in  Denver.  It  is  an  exceptional  pleasure  for  me  to  be  in  Denver 
tonight  and  to  meet  many  old  friends.  I  made  my  home  in  the  Rocky 
Mountains  and  on  the  Western  Plains  when  a  young  lad  for  15  years. 
Today  is  my  first  visit,  or  rather  return,  to  Denver  in  22  years.  My  duties 
have  called  me  East  and  South  and  into  two  foreign  countries,  but  I  have 
never  forgotten  my  early  days,  my  Western  friends,  and  I  have  never 
ceased  to  know  or  to  desire  to  return  Wtest.  While  I  have  made  several 
trips  over  and  through  these  mountains  since,  but  not  in  Denver. 

Government  Control  of  Railroads 

I  can  say  nothing  more  than  that  I  bring  to  you  of  the  West  and  to 
members  of  this  Mining  Congress  a  message  from  another  branch  of  in- 
dustry— the  railroads.  We  have  been  incarcerated,  but  unfortunately 
have  been  released  on  our  good  behavior.  Some  of  you  in  the  mining  busi- 
ness are  a  little  more  fortunate;  you  barely  escaped  the  same  fate  that 
we  did.  Take  the  advice  of  the  Senator,  and  let  us  not  lodge  any  more 
of  our  complaints  or  ask  for  relief  from  any  of  our  ills  from  the  Govern- 
ment. It  is  a  poor  doctor,  and  will  give  little  relief.  I  thank  you. 
(Applause.) 

MR.  STEARNS:  We  love  to  honor  those  of  our  members  who  have 
come  from  long  distances,  and  have  from  the  Philippines  a  delegate — Mr. 
Fischer. 


THE  AMERICAN  MINING  CONGRESS  39 

[Mr.  Fischer  thereupon  made  some  general  remarks  upon  the  variety  of 
news  published  in  the  United  States  concerning  the  Philippines  and  con- 
cluded by  saying  he  probably  would  have  a  few  interesting  things  to  say 
on  the  next  morning.] 

MR.  STEARNS:     I  want  to  present  Governor  Brooks  of  Wyoming. 

GOVERNOR  BROOKS:  I  certainly  appreciate  the  fact  that  I  am  here 
to  say  a  few  words  about  the  oil  industry,  particularly  of  your  sister  State. 
Wyoming. 

Oil  Industry  of  Wyoming 

I  am  glad  that  this  Mining  Congress  saw  fit  to  take  in  the  oil  industry. 
Some  of  the  people  here  from  the  East,  and  some  from  the  West,  thought 
that  the  oil  industry  in  the  Western  country  was  new;  as  a  matter  of  fact, 
oil  was  discovered  in  these  Rocky  Mountain  regions  87  years  ago,  long 
before  Colonel  Drake  brought  in  his  first  discovery  well  in  Pennsylvania. 
Fifty-four  years  ago  the  first  oil  well  was  drilled  in  Wyoming.  The  oil 
from  that  well  was  widely  used  as  a  lubricant.  Twenty-five  years  ago — 
and  I  am  saying  this  for  the  benefit  of  some  refining  men  here — that  well 
25  years  ago  produced  in  Wyoming  3000  bbls.  of  oil  that  year,  which  sold 
for  $7  a  barrel.  I  want  to  call  their  attention  to  that  fact,  because  we 
would  like  to  see  that  price  again.  Eight  years  ago,  owing  to  the  dis- 
covery of  some  big  wells  in  Salt  Creek,  the  production  of  Wyoming  oil 
jumped  to  2,000,000  bbls.  for  that  year,  but  the  price  dropped  to  50  cents 
a  barrel,  and  Wyoming  only  received  $1,000,000  for  its  oil.  Our  production 
of  oil  this  year  [1920]  will  exceed  17,000,000  bbls.,  bringing  over  $50,- 
000,000.  In  Wyoming  we  have  43  producing  oil-fields,  yielding  something 
libe  60,000  bbls.  a  day.  We  have  12  gas-fields,  yielding  700,000,000  cu.  ft. 
of  gas  daily.  We  have  10  refineries;  and  in  the  little  town  of  Casper  we 
have  one  treating  36,000  bbls.  of  crude  oil  per  day,  nearly  ready  to  open 
a  new  8-in.  pipe-line  from  Salt  Creek  that  will  enable  it  to  handle  50,000 
bbls.,  making  it  one  of  the  largest  refineries  in  the  world.  In  addition, 
they  re-run  6000  bbls.  They  have  paraffin  wax  plants  and  lubricating  oil 
equipment  without  a  superior.  We  have  the  Standard  Oil  Co.  there.  That 
re-run  oil  comes  from  the  Midwest  company's  plant.  The  Standard  Oil 
came  in  there,  and  this  re-run  oil  comes  into  the  pipe-lines  at  Casper  and 
goes  into  the  oil-refining  process  at  the  Midwest  plant.  That  oil,  which 
only  a  few  years  ago  was  used  solely  for  fuel  purposes — a  sort  of  a  waste 
product — is  now  taken  over  to  the  Standard  Oil  plant,  and  there  they  take 

Proposed  Extensions  of  Refineries 

that  re-run  oil  and  get  50%  more  out  of  it.  The  company  is  to  spend 
$10,000,000  more  at  Casper  in  doubling  the  capacity  of  its  present  plant, 
which  is  to  be  used  exclusively  for  re-run  oil.  Casper  today  is  producing 
650,000  gals,  of  gasoline  daily.  With  these  enlargements  completed  it 
will  produce  1,000,000  gals,  of  gasoline,  which  will  make  it  the  largest 
gasoline  manufacturing  center  in  the  world.  At  retail  prices,  that  gasoline 
would  cost  about  $130,000,000  a  year.  I  feel  it  is  fortunate  that  the  Amer- 


40  REPORT  OF  PROCEEDINGS 

ican  Mining  Congress  has  taken  in  the  oil  industry.  You  can  do  many 
things  for  it,  and  it  can  make  many  things  for  you.  The  influence  that 
you  have  at  Washington  can  be  exercised  to  aid  the  oil  industry.  In 
Wyoming  our  wells  last  a  little  longer  than  they  do  in  some  other  States. 
In  that  Salt  Creek  field  one  well  that  came  in  26  months  ago  makes  5000 
bbls.  today,  exactly  as  much  as  it  did  then;  another,  500  ft.  distant,  came 
in  with  38  bbls,  and  is  making  twice  as  much  as  it  did  16  months  ago. 
Down  in  Oklahoma,  Kansas  and  Texas  you  have  great  production,  but 
it  does  not  hold  up.  In  the  Salt  Creek  field  we  have  probably  the  biggest 
known  oil-field  in  the  world,  and  it  is  different  from  those  in  Kansas  and 
Oklahoma.  Down  there  all  the  land  was  owned  by  small  farmers.  The 
land  was  leased  by  oil  companies,  who  were  so  anxious  that  they  drilled 
as  many  wells  as  quickly  as  they  possibly  could.  They  developed  that 
field  so  rapidly  that  much  of  the  oil  was  wasted.  In  the  Salt  Creek  condi- 
tions are  different.  There  the  ground  is  largely  under  Government  con- 
trol, and  its  development  can  only  be  done  under  the  Federal  leasing 

Conservation  During  Construction  of  Works 

system.  I  believe  in  reasonable  conservation  as  exemplified  and  made 
possible  by  Theodore  Roosevelt.  I  advocate  conservation  that  means 
sensible  development.  From  the  Salt  Creek  field  there  are  now  5  pipe 
lines,  which,  within  30  days,  can  bring  50,000  bbls.  of  oil  per  day  into 
Casper.  What  is  the  use  of  drilling  a  lot  of  additional  wells  before  that 
oil  can  be  transported?  What  is  the  use  of  building  a  lot  of  additional 
pipe-lines  and  refineries  before  that  oil  can  be  economically  used?  Let  us 
not  waste  one  bit  of  these  great  natural  gifts.  Let  us  develop  it  sensibly; 
let  us  hope  that  the  Government  will  see  that  the  drilling  of  that  great 
field  is  economically  performed;  let  us  hope  that  that  oil  will  come  in  and 
not  be  wasted. 

MR.  STEARNS:  I  think  it  is  only  fair,  since  oil  has  had  its  innings, 
to  say  that  Denver  is  very  thankful  to  Wyoming — and  we  indorse  every 
figure  and  everything  that  Governor  Brooks  has  said — that  coal  ought  to 
have  a  word  to  say,  because  on  coal  we  have  depended  these  many  years, 
and  I  am  going  to  ask  Mr.  Brewster  to  say  somthing  about  coal. 

MR.  T.  T.  BREWSTER:  Mr.  Toastmaster:  When  I  was  notified  that 
I  would  be  called  on  to  speak  I  was  told  to  make  it  humorous,  and  since 
then  I  have  been  making  a  solemn  effort  to  think  of  something  funny 
to  say. 

Co-operation  Between  Coal  and  Metal  Mines 

You  have  identified  me  as  a  representative  of  the  bituminous  coal  indus- 
try, and  suggested  I  could  tell  something  of  experiences  in  Washington. 
It  is  true  that  certain  people  down  there  have  done,  or  tried  to  do,  some 
funny  things  to  the  coal  business  during  the  past  few  years,  but  a  narra- 
tive thereof  might  be  misconstrued  as  ridicule.  It  is  coming  out  all  right, 
so  let  it  pass.  In  carrying  out  certain  allotted  duties,  it  has  developed  upon 


THE  AMERICAN  MIXING  CONGRESS  41 

me  to  try  to  get  all  the  coal  operators  to  think  of  their  problems,  to 
identify  and  classify  the  elements  of  their  business,  and  to  account  for 
their  operations  in  the  same  way,  because  most  of  the  misunderstanding 
in  this  world  comes  from  the  failure  to  think  and  talk  about  the  same  thing 
at  the  same  time  in  the  same  way.  Since  I  have  been  here  I  have  been 
impressed  that  there  are  many  problems  that  the  soft-coal  man  and  the 
hard-rock  man  have  in  common,  and  through  the  medium  of  this  great 
institution,  the  American  Mining  Congress,  I  hope  we  can  bring  to  all  a 
realization  of  the  many  things  we  have  in  common,  and  in  looking  at  this 
singing  list  I  see  here  a  little  sentiment  with  which  I  will  conclude  my 
remarks:  "Let's  get  together;  work  together;  play  together;  pull  to- 
gether." 

MR.  STEARNS:  Mr.  Loring  was  so  modest  that  I  am  going  to  ask 
Governor  Boyle  to  say  a  word  to  you  about  Mr.  Loring,  who  is  to  be  your 
president  for  the  ensuing  year. 

Something  About  the  New  President 

GOVERNOR  BOYLE:  From  California  comes  the  next  president  of 
the  American  Mining  Congress.  Happily  for  me,  it  has  been  my  fortune 
to  know  not  only  the  coming  president,  but  the  past  president,  as  indi- 
viduals who  have  visited  my  home  and  who  have  been  intimate  friends. 
Mr.  Loring  comes  to  you  something  of  a  stranger,  because  he  is  of  a 
in'd  st  and  a  retiring  sort  of  disposition,  but  he  is  a  man  who  has  sailed 
the  seven  seas,  who  has  mined  on  the  three  Continents — as  some  one 
said — and  who  has  in  his  make-up  all  of  these  qualities  that  ought  to  con- 
tinue the  excellent  progress  attained  by  the  American  Mining  Congress 
under  the  presidency  of  its  distinguished  retiring  leader.  He  comes  to 
you  as  an  international  mining  engineer  who  will  lead  the  ship  of  the 
American  Mining  Congress  into  a  safe  harbor.  [Governor  Boyle  then 
expounded  the  virtues  of  Mr.  Loring  at  considerable  length,  receiving 
applause.] 

The  meeting  thereupon  adjourned. 


-1  REPORT  OF  PROCEEDINGS 


SIXTH  GENERAL  SESSION 
FRIDAY  MORNING,  NOVEMBER  19,  1920. 

CHAIRMAN  WELLS:     The  sixth  general  session  will  now  be  in  order. 

\ 

Three  Interesting  Addresses  on  Labor 

The  first  address  is  by  Mr.  Arthur  Nottman,  on  the  subject  of  'Condi- 
tions of  Operation  and  Production  in  Open-Shop  Districts  in  Arizona.' 

[Mr.  Nottman's  paper  appears  on  page  294  of  the  Proceedings.] 

CHAIRMAN  WELLS:  The  next  address  is  by  Mr.  Charles  A.  Chase, 
manager  of  the  Liberty  Bell  mine,  Telluride,  Colo. 

[Mr.  Chase's  paper  appears  on  page  302  of  the  Proceedings.] 

CHAIRMAN  WELLS:  The  next  speaker  is  Mr.  L.'  Ward  Bannister  of 
Denver,  whose  address  is  entitled  'Denver  and  the  Open  Shop.' 

[Mr.  Bannister's  address  will  be  found'  on  page  443  of  the  Proceedings.] 

CHAIRMAN  WELLS:  We  are  now  privileged  to  listen  to  the  Hon.  W. 
G.  Bierd,  president  of  the  Chicago  &  Alton  Railway,  whose  subject  is  'The 
Relation  of  Industry  to  Industry.' 

[Mr.  Bierd's  address,  which  covered  the  obligation  of  one  line  of  indus- 
try to  another,  was  a  general  review,  dealing  with  such  points  as  associa- 
tion and  prosperity  of  allied  industries,  oppression  and  unrest,  the  Amer- 
ican standard  of  living,  labor  and  its  organizations,  world  policy  of  hu- 
manity, the  obligation  of  one  business  to  another,  politics,  governmental 
control,  and  that  nothing  un-American  be  permitted  to  thrive  in  America.] 

CHAIRMAN  WELLS:  This  general  session  will  now  stand  adjourned 
until  2  o'clock. 


THE  AMERICAN  MIXING  CONGRESS  43 

SIXTH  GENERAL  SESSION 

FRIDAY  AFTERNOON,  NOVEMBER  19,  1920. 

CHAIRMAN  WELLS:  The  session  will  be  in  order.  Mr.  Fletcher 
Hamilton  of  San  Francisco  will  speak  to  you  on  the  gold-mining  industry 
(Applause.) 

[Mr.  Hamilton's  paper  appears  on  page  020  of  the  Proceedings,  among 
those  of  the  Gold  Conference.] 

PRESIDENT  WELLS:  Mr.  Arthur  F.  Fischer,  who  is  Chief  of  Forestry 
and  a  delegate  of  the  Philippine  Government,  will  speak  to  us  on  mining 
in  the  Philippines.  (Applause.) 

MR.  FISCHER:  Upon  receiving  a  telegram  from  General  Mclntyre, 
Chief  of  the  Bureau  of  Insular  Affairs,  asking  me  to  represent  the  Depart- 
ment of  Agriculture  and  Natural  Resource,  I  came  here  with  the  intention 
of  learning  something  that  will  be  useful  in  the  Philippines,  particularly 
now  that  the  Government  is  working  on  a  new  mining  law.  I  am  sure  the 
Government  of  the  Philippine  Islands  would  be  more  than  pleased  to  have 
suggestions  from  the  Mining  Congress  along  this  line. 

Gold,  Iron,  Coal,  ani  Oil  Projects 

In  mining  we  have  not  done  much,  because  of  the  lack  of  a  complete 
geological  survey.  Mining  is  being  carried  on  sporadically  as  a  conse- 
quence and  also  because  of  lack  of  capital.  Practically  all  development 
has  been  done  by  local  capital. 

Gold  mining  has  received  the  greatest  attention,  and  several  lode  mines 
have  been  operating  continuously  for  a  number  of  years,  and  paying  divi- 
dends. Placer  mines  are  also  being  developed,  and  dredges  are  working 
in  the  Paracale  and  Mambulao  fields  along  the  east  coast  of  Luzon.  Hy- 
draulicking  of  placers  was  started,  but  was  suspended,  due  to  lack  of 
capital.  Gold  is  found  in  the  sands  of  all  the  streams,  and  sporadic  pros- 
pecting has  been  done;  and  I  feel  certain  that  should  real  exploration  be 
done  and  a  geological  survey  made  of  the  islands,  the  Philippines  will 
develop  into  a  mining  country. 

Iron  is  one  of  our  largest  undeveloped  natural  resources.  Iron  smelting 
and  foundry  operations  have  been  carried  on  for  many  years  in  a  small 
way.  The  ore  is  picked  up  in  the  stream  bed  near  charcoal  furnace,  re- 
duced, and  cast  into  pans  and  plow  points.  The  iron  deposits  of  the  prov- 
ince of  Suriago,  consisting  of  whole  mountain  ranges,  offer  great  promise 
for  development.  Part  of  the  iron  deposits  in  southern  Luzon  were  ac- 
quired by  the  Japanese,  and  some  iron  ore  was  shipped  to  Japan;  but 
owing  to  faulty  title,  the  property  is  in  the  courts. 

We  have  been  dependent  upon  Japan  for  our  coal.  During  the  war,  coal 
reached  $30  gold  per  ton;  and  we  had  to  pay  the  price.  This  was  a  bless- 
ing in  disguise,  however,  as  we  began  to  develop  our  own  lignite  field, 


44  REPORT  OF  PROCEEDINGS 

both  governmentally  and  privately,  on  the  Islands  of  Bataan,  Cebu  and 
Mindanao. 

Oil  occurs  from  Luzon  to  Mindanao,  and  exploration  by  both  American 
and  foreign  interests  has  been  carried  on.  No  large  wells  have  been 
sunk,  but  shallow  wells  have  been  put  down  and  oil  baled.  Since  coming 
to  the  United  States  I  have  been  reading  considerably  about  the  motor- 
fuel  problem,  and  it  would  be  well  to  make  a  comparative  study  of  the 
cost  of  producing  motor-fuel  and  fuel-alcohol.  In  the  Philippines,  the 
nipa  palm  is  the  cheapest  source  of  alcohol  in  the  world.  In  Borneo  the 
British  are  beginning  to  develop  their  alcohol  resources  from  their  im- 
mense nipa  areas.  Other  countries  have  investigated  this  palm  and  are 
preparing  to  plant  it.  Cassava  is  also  another  cheap  source  of  alcohol, 
and  with  the  immense  areas  of  cheap  fertile  land  available  and  compara- 
tively cheap  labor — with  a  production  in  fuel-alcohol  of  approximately  two 
tons  or  over  per  acre  per  year — it  would  pay  to  make  a  comparative  study. 

Copper  deposits  occur  in  various  parts  of  the  islands.  The  old  Man 
cnyan  field  in  Luzon  has  been  worked  since  ancient  times,  but  the  develop- 
ment of  this  field  is  due  to  lack  of  transportation.  Other  metallic  min- 
erals exist. 

Many  commercial  deposits  of  non-metallic  minerals  exist,  and  their 
development  is  just  a  question  of  transportation  and  capital. 

Geography  and  Ethnology  of  the  Philippines 

The  ignorance  of  the  average  American  is  very  apparent  concerning 
some  geographical  points  in  the  Philippines.  The  Islands  are  120,000  sq. 
miles  in  area  (about  the  size  of  the  State  of  New  Mexico),  comprising 
about  3000  islands,  eight  of  which  constitute  the  major  portion  of  the 
Territory.  About  12%  of  this  entire  area  is  under  cultivation,  supporting 
a  population  of  10,500,000  people.  Drawing  a  semi-circle,  with  Manila  at 
the  focus,  with  a  radius  of  2500  miles,  it  would  take  in  nearly  800,000,000 
people,  or  half  the  world's  population.  The  American  has  not  taken  com- 
mercial advantage  of  the  Philippines  as  he  should.  The  English,  Japanese 
and  other  nations  are  keenly  alive  to  this  market  and  in  development  of 
its  natural  resources.  A  statement  was  made  in  Washington  that  with  the 
increase  in  our  population  and  the  increase  in  our  food  supply  in  the 
United  States,  we  would  consume  everything  we  raised  in  25  years.  Why 
not  build  for  the  future  in  placing  our  capital  where  it  is  needed  and 
helping  develop  a  practically  virgin  country  which  will  have  the  best  of 
relations  with  the  United  States?  How  about  the  mining  industry?  Have 
you  taken  stock?  Has  your  Mining  Congress  a  foreign  extension  com- 
mittee? 

PRESIDENT  WELLS:     It  has  not. 
Mining  Congress  Should  Study  Foreign  Countries 

MR.  FISCHER:  This  leads  me  to  a  suggestion  to  your  Congress:  The 
appointment  of  a  foreign  extension  committee  to  study  the  mineral  re- 
sources of  foreign  countries,  co-operating  with  the  Departments  of  Com- 


THE  AMERICANA  MINING  CONGRESS  45 

merce,  Interior,  State  and  other  Governmental  agencies  in  Washington — 
the  Bureau  of  Mines  and  Geological  Survey  have  already,  I  understand, 
compiled  certain  information  along  this  line — this  committee  to  keep  in 
touch  with  all  departments,  and  that  the  American  mining  industry  has 
equal  opportunity  with  other  nations,  or  the  open-door  policy.  Apply  your 
arguments  in  the  open  and  closed-shop  papers  presented  to  the  world's 
affairs.  (Applause.) 

PRESIDENT  WELLS:  Governor  Boyle  had  expected  to  speak  to  you, 
probably  on  the  subject  of  gold,  but  he  has  been  obliged  to  leave  for 
Nevada.  Mr.  James  Lord,  president  of  the  Mining  Department  of  the 
American  Federation  of  Labor,  came  here  to  attend  this  convention  and 
to  address  you.  On  Monday  his  father  died,  and  he  was  called  East,  but 
he  left  with  me  some  hastily-prepared  notes  and  an  address  which  is 
rather  too  long  to  read  to  you;  but  because  I  have  known  Mr.  Lord  for 
a  good  many  years,  and  because  I  was  instrumental  in  getting  him  to 
come  here  to  talk  to  us,  I  will  ask  your  indulgence  while  I  read  to  you  a 
part  of  his  address,  because  it  indicates  his  attitude,  and  a  very  satisfac- 
tory one,  as  I  view  it. 

[Mr.  Lord's  address  will  be  found  on  page  279  of  the  Proceedings.] 

PRESIDENT  WELLS:  I  thank  you  for  your  courtesy  in  letting  me 
read  that  to  you,  but  I  thought  it  was  only  fair  to  Mr.  Lord  to  make  his 
views  known  to  you,  to  that  extent,  at  least. 

We  are  now  ready  to  hear  the  presentation  of  the  reports  of  the  Reso- 
lutions Committee. 

Report  of  Resolutions  Committee 

(The  Chairman  of  the  Resolutions  Committee  read  the  resolution  No.  1, 
presented  by  Bulkeley  Wells.) 

PRESIDENT  WELLS:  What  is  your  pleasure  with  respect  to  these 
resolutions,  gentlemen?  Will  you  pass  upon  them  individually  as  read, 
and  then  accept  them  collectively  as  the  report  of  the  Resolutions  Com- 
mittee, or  how  will  you  proceed? 

SENATOR  MACBETH:  Mr  Chairman,  I  move  that  the  report  of  the 
Resolutions  Committee  be  accepted,  unless  there  is  an  objection  by  some 
member  present  to  a  particular  resolution.  In  that  way  we  will  expedite 
matters.  If  there  is  any  member  that  objects  to  any  resolution  read,  he 
can  get  up  and  make  his  objection,  and  .if  there  is  no  objection,  we  will 
consider  the  resolution  adopted. 

A  MEMBER :     I  second  the  motion. 

PRESIDENT  WELLS:  As  I  understand  it,  the  motion  is  to  the  effect 
that  the  report  of  the  Resolutions  Committee  be  accepted,  except  such 
objection  as  may  be  raised  at  the  time  by  anyone  who  does  not  concur 
in  the  approval  of  the  resolution  as  read.  Is  that  the  effect  of  it,  Senator 
Macbeth? 


46  REPORT  OF  PROCEEDINGS 

SENATOR   MACBETH:     Yes,  sir. 

i 

PRESIDENT  WELLS:  It  has  been  duly  moved  and  seconded.  Those 
in  favor  signify  by  saying  aye.  (Chorus  of  ayes.)  Contrary,  no.  (No 
response.)  It  was  so  ordered,  and  unless  there  is  objection,  it  will  be 
understood  that  the  resolutions  as  read  are  approved  under  this  motion. 
They  must  be  read  now.  If  there  is  no  objection,  they  will  be  accepted. 
Read  them  all. 

(Thereupon  President  Wells  read  resolution  No.  2,  introduced  by  him- 
self; also  resolutions  3  to  7,  inclusive.) 

PRESIDENT  WELLS:  You  understand,  gentlemen,  these  resolutions 
have  been  passed  and  approved  by  the  Committee  on  Resolutions.  I  am 
not  reading  in  each  instance  that  attached  writing. 

Reading  resolution  No.  8,  as  follows: 
First  Blue-Sky  Resolution  Rejected 

Introduced  by  Sidney  Norman  and  A.  G.  MacKenzie  of  the  Committee 
on  Blue  Sky  Legislation. 

"WHEREAS,  blue-sky  laws  in  more  than  30  States  of  the  Union  have 
largely  failed  to  protect  the  public  against  dishonest  promoters,  and  have 
at  the  same  time  made  it  increasingly  difficult  to  obtain  capital  for  legiti- 
mate enterprises;  now,  therefore,  be  it 

"RESOLVED,  by  the  Twenty-third  Annual  Convention  of  the  American 
Mining  Congress,  at  Denver,  Colorado,  November  15-19,  1920,  That  we 
favor  a  Federal  blue-sky  law  instead  of  varied  State  enactments,  and  that 
we  call  upon  the  officers  of  this  organization  to  take  the  initial  steps  to 
such  end;  that  we  endorse  the  report  of  the  Committee  on  Blue-Sky  Legis- 
lation as  presented  by  the  chairman  of  the  committee  to  this  convention 
and  recommend  that  the  suggestions  of  said  committee  as  to  the  nature 
of  such  Federal  legislation  be  followed  as  closely  as  may  be  possible." 

A  MEMBER:     Just  one  moment.    I  think  that  was  rejected,  was  it  not? 
PRESIDENT  WELLS:     That  is  quite  right. 

THE  MEMBER:  Isn't  there  another  one  attached  to  it  which  was 
approved? 

PRESIDENT  WELLS:  No,  that  is  the  report  of  the  committee  attached 
to  that. 

THE  SECRETARY:  Yes,  that  is  the  substance  of  the  report  of  the 
committee. 

PRESIDENT  WELLS:  I  am  sorry  about  that.  I  thought  that  these 
were  all  approved  resolutions. 

[Reading  Resolution  No.  9,  as  follows:] 


THE  AMERICAN  MIXING  CONGRESS  47 

Second  Blue-Sky  Resolution 

Introduced  by  M.  B.  Tomblin,  and  Robert  I.  Kerr. 

"In  accordance  with  the  above,  the  undersigned  members  of  your  com- 
mittee on  blue-sky  legislation  most  respectfully  submit  this  following 
resolution : 

Be  it  resolved,  by  the  Delegates  to  the  twenty-third  Annual  Convention 
of  The  American  Mining  Congress,  held  at  Denver,  Colo.,  November  15-19, 
1920,  That  we  are  opposed  to  all  proposed  enactments  now  pending  in 
Congress  providing  for  so-called  'blue-sky'  legislation,  and  that  it  is  the 
sense  of  this  Convention  that  State  regulatory  measures  now  in  force  in 
the  several  States  are  sufficient  in  form,  with  slight  modification,  to  meet 
all  requirements." 

MR.  MACKENZIE:  Mr.  President,  I  wish  to  be  heard  on  that  resolu- 
tion briefly :  For  about  five  years,  at  the  instance  of  this  organization, 
I  have  been  investigating  blue-sky  legislation.  I  say  this  so  yon  will 
understand  my  remarks  are  based  on  more  than  casual  observation. 
Any  one  who  will  give  a  small  part  of  the  investigation  I  have  given  to 
this  subject  will  know,  as  I  do,  that  blue-sky  legislation  never  can  be 
made  effective  to  regulate  the  sale  of  securities  without  regulating 
the  use  of  the  mails  for  that  purpose.  Without  restrictions  on  the  use 
of  the  mails,  I  can  drive  a  four-horse  team  through  any  State  blue-sky 
law  in  America. 

Thirty  State  Blue-Sky  Laws 

With  reference  to  the  action  of  the  Resolutions  Committee,  I  am  not 
going  to  propose  Federal  legislation,  but  I  do  wish  to  oppose  the  resolu- 
tion which  has  been  approved  by  the  Committee.  We  have  something 
over  thirty  State  blue-sky  laws  in  this  country;  no  two  of  them  are 
identical,  and  most  of  them  are  bad.  They  operate  distinctly  to  the  dis- 
advantage of  the  man  who  tries  to  raise  capital  in  his  home  State.  Some 
of  them  have  provisions  whereby  an  eastern  railroad,  or  public  utility, 
or  mortgage  bond  enterprise,  or  other  foreign  corporation  that  goes  be- 
fore the  commission  is  asked  no  questions;  but  when  men  walk  in  from 
the  hills  with  a  mining  proposition,  or  bring  up  a  local  or  individual 
proposition,  they  have  to  tell  more  than  they  know  about  it  and  half  the 
time  they  don't  get  by  then.  That  is  what  State  blue-sky  laws  are 
doing — they  are  operating  against  the  man  who  is  trying  to  do  business 
and  raise  capital  at  home. 

I  wish  to  call  your  attention  to  the  language  of  this  resolution,  and  its 
effect: 

"It  is  the  sense  of  this  convention  that  State  regulatory  measures  now 
in  force  in  the  several  States  are  sufficient  in  form,  with  slight  modifica- 
tion, to  meet  all  requirements." 

Just  realize  what  that  means:  It  means  that  the  American  Mining 
Congress  is  placing  its  stamp  of  approval  on  existing  State  blue-sky 
and  if  you  had  read  those  laws  carefully  there  would  not  be  a  man 


48  REPORT  OF  PROCEEDINGS 

in  this  convention  that  would  give  his  approval  to  them.  Don't  under- 
stand me  as  defending  the  unworthy  promoter.  I  wouldn't  be  understood 
as  saying  thai,  but  I  do  say  that  some  of  the  existing  blue-sky  laws  aro 
among  the  worst  things  mine  development  has  to  contend  with  today. 
For  that  reason,  I  am  firmly  opposed  to  this  resolution,  and  I  move 
that  it  be  laid  on  the  table. 

MR.  GEORGE  L.  NYE:     Mr.  Chairman,  I  desire  to  second  that  motion. 

SENATOR  MACBETH.  Some  years  ago,  when  the  Hon.  J.  H.  Richards 
was  president  of  this  association,  a  careful  investigation  was  made  of  the 
necessity  for  a  blue-sky  law  in  the  several  States.  A  committee  of  this 
organization  gave  much  study  to  the  question  for  a  number  of  months, 
and  then  sent  to  the  several  legislatures  of  the  Western  States— and  I 
imagine  throughout  the  United  States — a  carefully  drawn  blue-sky  bill. 
This  bill  was  adopted  by  most  of  these  States.  We  have  it  in  Idaho. 
We  have  found  it,  Mr.  President,  to  be  very  excellent,  and  we  feel  further, 
on  the  subject,  that  we  want  no  more  government  interference  in  our 
State  affairs — we  want  the  States  to  manage  their  own  affairs.  That  is 
one  of  the  reasons,  and  I  might  say  the  main  reason,  why  the  committee 
on  resolutions  unanimously  turned  down  what  is  known  as  the  MacKenzie- 
Norman  bill  and  favored  the  bill  that  we  now  have  before  us. 

Satisfactory  Law  in  California 

MR.  JOHN  F.  DAVIS :  I  am  not  a  member  of  the  Resolutions  Committee, 
but  I  have  had  some  experience  with  blue-sky  legislation,  and  with  the 
administration  of  the  law  that  we  have  in  California.  There  is  one  phase 
of  this  subject  that  has  been  suggested  here  at  all  today,  which  I  think 
ought  to  be  emphasized.  Before  I  speak  of  it,  let  me  say,  however, 
that  if  you  expect  to  make  people  cautious  by  legislation,  if  you  expect 
to  prevent  that  certain  class  of  men  from  making  false  investments, 
and  do  it  by  legislation;  why,  you  are  taking  useless  steps.  The  theory  is 
all  right,  to  protect,  as  far  as  we  can,  people  against  being  robbed  by 
wildcat  promoters,  but  what  is  going  to  be  the  method?  That  is  the 
whole  proposition.  There  isn't  any  particular  discussion  needed  as  to 
whether  or  not  we  are  against  wildcatting,  whether  or  not  we  would  Iikf3 
to  put  in  jail  a  man  who  will  rob  another.  We  are  all  in  favor  of  that. 
The  question  is  what  is  the  most  effective  method? 

As  Mr.  Macbeth  has  said,  the  legislation  by  the  various  States  on  this 
subject  was  initiated  by  this  very  body.  I  don't  know  what  the  blue-sky 
law  is  in  Colorado;  I  am  not  sure  what  it  is  in  Idaho;  but  I  do  know 
that  we  have  one  of  the  best  laws  of  that  kind  on  the  statute  books  in  the 
State  of  California.  It  was  one  of  Senator  Hiram  Johnson's  (then  gover- 
nor) measures.  All  kinds  of  objections  were  made  against  it  at  the 
time  it  was  put  through;  and  yet  the  very  men  who  opposed  it,  men  who 
were  afraid  that  it  would  prevent  legitimate  capital  coming  into  the 
country,  and  all  that  sort  of  thing,  are  back  of  it  today.  It  does  not  work 
to  the  disadvantage  of  getting  capital  invested  in  a  fair  project.  It  has 
worked  well.  There  is  not  a  single  objection  to  it  in  any  quarter,  except 
on  the  part  of  wildcatters;  and  of  course  they  have  no  standing  in 


THE  AMERICAN  MINING  CONGRESS  49 

court.  I  do  not  know  of  this  dire  need  of  laws  of  this  kind  in  certain 
States.  If  there  is,  probably  the  same  experience  that  has  made  effective 
laws  in  the  States  where  they  are  effective,  will  amend  ineffective  laws  in 
those  States  where  they  are  thus  far  ineffective,  and  will  bring  on  laws  of 
that  kind  where  there  are  none.  We  do  not  need  to  regulate  the  whole 
world  at  once.  We  have  enough  problems  in  Washington  without  taking 
up  the  outer  fringe  of  a  subject  like  this,  where  there  is  no  overwhelming 
demand  on  the  part  of  any  community  or  of  the  country  for  it. 

Result  of  a  National  Blue-Sky  Law 

But  there  is  another  feature:  If  you  take  this  and  pass  under  the  guise 
of  a  blue-sky  law  or  anything  of  that  kind  a  bill  which  is  going  to  keep 
in  Washington  a  great  big  army  of  employes,  you  will  have  this  situa- 
tion confront  you:  Every  time  you  want  a  permit,  instead  of  being  able 
to  go  to  your  State  Capitol,  you  will  have  to  go  to  Washington,  or  employ 
a  Washington  attorney,  to  take  up  the  matter,  in  addition  to  anything 
else  that  you  have  to  do  at  home.  When  you  think  of  the  blue-sky  law 
that  was  plannned  at  the  last  session  of  Congress — and  I  remember  Mr. 
Callbreath  sending  circulars  all  over  the  country  to  call  our  attention  to 
its  character — what  would  it  have  done  to  legitimate  enterprises  if  it 
had  been  passed?  I  think  you  will  agree  that  we  should  wait  to  see  if 
there  is  an  urgent  necessity  for  a  Federal  law  before  we  turn  our  backs 
on  these  efficient  State  laws.  I  think  we  ought  to  stand  by  the  report 
of  the  committee.  (Applause.) 

PRESIDENT  WELLS:  A  motion  has  been  made,  and  duly  seconded, 
that  resolution  No.  9  be  tabled.  All  those  in  favor  of  the  motion  will 
signify  by  saying  aye.  (Chorus  of  ayes.)  Contrary  minded  no.  (Chorus 
of  noes.)  The  motion  is  lost. 

MR.    MACKENZIE:     I    have    another    motion. 
PRESIDENT  WELLS:     All  right. 

MR.  MACKENZIE:  I  am  sorry  that  took  so  much  time.  This  discus- 
sion got  entirely  away  from  my  previous  motion,  and  I  am  going  to  make 
another  one.  I  prefaced  my  remarks  by  saying  that  the  committee  had 
rejected  the  idea  of  the  Federal  law.  I  do  not  urge  that.  I  move  that 
the  latter  part  of  this  resolution,  following  the  word  "legislation,"  on  line 
five,  be  stricken  out. 

PRESIDENT  WELLS:     Just  what  words  do  you  mean? 

MR.  MACKENZIE:  Where  is  says,  "That  it  is  the  sense  of  this  Con- 
vention that  State  regulatory  measures  now  in  force  in  the  several  States 
are  sufficient  in  form,  with  slight  modification,  to  meet  all  the  require- 
ments." 

Now,  can  I  get  a  second  to  that  for  the  purpose  of  making  some  remarks? 

MR.  GEORGE  L.  NYE:     I  second  it. 


50  REPORT  OF  PROCEEDINGS 

MR.  MACKENZIE:  That  will  be  considered  as  an  endorsement  of  ex- 
isting State  blue-sky  laws  by  the  American  Mining  Congress.  Go  ahead 
and  kill  your  Federal  bill,  but  do  not  send  that  voice  to  Congress. 

MR.  KERR:  I  signed  the  minority  report  of  that  committee,  and  I 
would  like  to  have  the  report  read  in  full,  and  I  would  like  to  have  Mr. 
MacKenzie  read  the  entire  resolution.  It  provides  that  we  are  opposed 
to  blue-sky  legislation  now  pending  before  Congress.  California  has  an 
ideal  law,  as  Judge  Davis  said,  and  we  are  perfectly  satisfied.  I  stand 
by  the  report  of  the  committee. 

PRESIDENT  WELLS:     What  is  it  you  want  read? 

MR.  KERR:  The  entire  minority  report,  that  signed  by  Mr.  Tomblin 
and  myself. 

PRESIDENT  WELLS:  I  have  it — "In  accordance  with  the  above,  the 
undersigned  members  of  your  committee  on  blue-sky  legislation,  most 
respectfully  submit  the  following  resolution: — " 

MR.  KERR:  It  probably  has  been  detached  from  the  resolutions,  for 
some  reason,  Mr.  Chairman. 

PRESIDENT  WELLS:    This  seems  to  be  all  there  is  to  it: 

"Be  it  resolved  by  the  Delegates  to  the  twenty-third  Annual  Con- 
vention of  the  American  Mining  Congress,  held  at  Denver,  Colo., 
November  15-19,  1920,  that  we  are  opposed  to  all  proposed  enactments 
now  pending  in  Congress  providing  for  so-called  'blue-sky'  legisla- 
tion, and  that  it  is  the  sense  of  this  Convention  that  State  regulatory 
measures  now  in  force  in  the  several  States  are  sufficient  in  form, 
with  slight  modification,  to  meet  all  requirements." 

This  is  all  that  I  have,  Mr.  Kerr. 

MR.  KERR:     There  was  another  sheet. 

MR.  McBETH:     Let  us  have  the  question  on  Mr.  MacKenzie's  motion. 

PRESIDENT  WELLS:     Was  there  a  second? 

MR.  NYE:     Yes. 

PRESIDENT  WELLS:  You  understand  the  motion  is  to  strike  out  all 
after  the  word  "legislation."  Those  in  favor,  signify  by  saying  aye. 
(Chorus  of  ayes.)  Contrary  minded  no.  (Chorus  of  noes.)  The  mo- 
tion is  lost  again. 

MR.  MACKENZIE:     I  call  for  a  division. 

Vote  on  Resolution  9 

PRESIDENT  WELLS:  All  right.  Those  in  favor  of  the  motion  made 
by  Mr.  MacKenzie,  please  stand.  (16  members  arise.)  Now  those  op- 
posed to  the  motion  to  strike  out  the  latter  part,  will  please  rise.  (14 


THE  AMERICAN  MIXING  CONGRESS  51 

members  arise.)  The  motion  is  carried.  The  resolution  is  amended  by 
the  elimination  of  all  following  the  word  "legislation"  in  the  fifth  line. 
Is  there  any  further  discussion  of  this  resolution?  (No  response.) 

[Reading  resolution  No.  10.] 

PRESIDENT  WELLS:    Any  discussion?     (No  response.) 

[Reading  resolutions  Nos.  11  to  24,  inclusive.] 

MR.  NYE:  I  sent  a  resolution,  as  I  thought,  for  presentation  to  this 
body  in  the  regular  manner.  Owing  to  the  fact  that  I  was  in  attend- 
ance at  another  conference,  I  was  unable  to  attend  the  regular  meeting 
of  the  Resolutions  Committee,  and  I  entrusted  it  to  someone  else,  and  he 
in  turn  thought  it  had  reached  the  proper  channels;  but  inasmuch  as  it 
has  not  been  presented  here  today,  I  guess  it  was  mislaid,  and  I  there- 
fore ask  the  consent  of  this  body  that  this  resolution  be  considered  with 
the  other  resolutions,  and  incorporated  therein. 

PRESIDENT  WELLS:     What  is  your  pleasure,  gentlemen? 
A  MEMBER:     Let  us  hear  the  resolution. 

Armenian  Affairs 

MR.  NYE:  "WHEREAS,  among  the  Christian  peoples  of  the  Near  East 
a  most  intolerable  situation  was  brought  about  by  the  World  War  and 
taken  advantage  of  by  the  Turkish  fanaticisim  and  cruelty  and  which 
situation  still  continues,  and 

WHEUEAS,  the  Armenian  nation  in  particular  has  demonstrated  by  in- 
numerable acts  of  heroism,  its  unflinching  support  of  Christian  principles 
and  civilization,  and 

WHEREAS,  the  Near  East  Relief  taking  over  the  work  formerly  done  by 
the  American  Red  Cross  has  been  chartered  by  the  Congress  of  the  United 
States,  and  is  energetically  doing  all  possible  with  the  resources  at  its 
command  to  care  for  the  countless  thousands  of  orphans,  and  rescue  from 
Turkish  slaver  many  thousands  of  Christian  girls,  and  in  short,  carry 
oil  the  best  ideals  of  America; 

Resolved,  that  the  American  Mining  Congress  in  annual  convention 
assembled  do  hereby  endorse  the  efforts  and  principles  of  the  Near  East 
Relief  in  their  great  work  and  recommend  that  all  members  and  chapters 
give  aid  by 

First— Assisting  the  Near  East  Relief  workers  in  their  efforts  wher- 
ever they  may  be; 

Second — Accepting  the  responsibility  for  the  support  of  an  orphan 
Near  East  child  whenever  possible; 

Third— Assist  the  educational  program  of  the  Near  East  Relief  by  pub- 
lishing Near  East  Relief  stories  in  trade  publications." 

I  move  the  adoption  of  the  resolution.  I  do  not  desire  to  speak  to  the 
resolution  unless  there  is  opposition,  in  which  case  1  do  desire  to  be 
heard. 


52  REPORT  OF  PROCEEDINGS 

MR.  LORING:  That  resolution  was  presented  and  unanimously  re- 
jected. I  don't  know  how  it  happened  to  be  left  out  of  the  report. 

MR.  NYE:  Mr.  Loring,  I  was  advised  by  the  Secretary  that  it  had 
not  been  presented  by  the  committee.  , 

SECRETARY  CALLBRE ATH :  I  found  that  resolution  after  the  reso- 
lutions hade  gone  in.  In  some  way  I  overlooked  it,  and  there  was  no  record 
that  it  had  been  considered  by  the  committee. 

A  MEMBER:  I  was  a  member  of  the  committee,  and  it  was  read  and 
discussed,  and  rejected. 

A  MEMBER:  It  came  before  the  Resolutions  Committee,  and  was 
unanimously  rejected. 

MR.  NYE:  Mr.  President,  I  desire  to  offer  the  resolution,  and  if  I  can 
get  a  second,  will  discuss  it. 

MR.  MACKENZIE:  I  will  second  the  motion  for  the  purpose  of  dis- 
cussion. 

MR.  NYE:  Mr.  President,  I  do  not  desire  to  take  up  any  great  length 
of  time  of  this  Convention,  but  why  this  body  of  men,  which  includes 
within  its  fraternity,  if  not  within  its  actual  membership,  such  a  man  as 
Herbert  C.  Hoover,  could  reject  a  resolution  endorsing  the  humanitarian 
work  of  the  Near  East  Relief  committee  is  something  I  cannot  under- 
stand. This  resolution  may  not  mean  anything  to  you,  but  it  means 
something  to  these  people  over  there,  and  to  those  men  and  women  who 
are  giving  their  time  to  rescuing  these  people.  Certainly,  the  least  that 
this  body  can  do  is  to  recognize  and  endorse  that  work,  and  do  it 
unanimously  and  now. 

PRESIDENT  WELLS:  Does  anybody  else  desire  to  be  heard?  (No 
response.)  The  motion  is,  then,  upon  the  adoption  of  this  resolution,  as 
read  by  Mr.  Nye  and  seconded  by  Mr.  MacKenzie. 

MR.  NYE:     Mr.  Chairman,  I  will  ask  for  a  rising  vote. 

PRESIDENT  WELLS:  I  will  be  glad  to  have  it.  Those  in  favor  of 
the  motion  will  stand.  (21  members  arise.  >  Those  opposed  to  the 
resolution  will  rise.  (3  members  arise.)  The  motion  is  carried,  and 
the  resolution  is  adopted  and  becomes  a  part  of  the  report. 

Your  previous  vote  having  been  upon  the  adoption  of  the  report  of  the 
Resolutions  Committee,  I  will  entertain  a  motion  covering  the  adoption 
of  these  25  resolutions. 

MR.  FRANKLIN:  I  move  that  the  Convention  adopt  the  resolutions 
as  read. 

PRESIDENT  WELLS:     The  25  resolutions? 

MR.  FRANKLIN:     The  25  resolutions: 

PRESIDENT  WELLS:      The   25    resolutions,   excepting   No.   8.     Those 


THE  AMERICAN  ^MINING  CONGRESS  53 

in  favor  of  the  motion  to  adopt  these  resolutions  will  signify  by  saying 
aye.  (Chorus  of  ayes.)  Contrary  minded,  no.  (No  response.)  It  is  so 
ordered. 

RESOLUTIONS 

(1)  Uurging  That  The  War  Finance  Corporation  Resume  Activities 

WHEREAS,  The  sharp  contraction  during  the  past  few  weeks  in  domestic 
demand  for  American  products  has  been  so  acute  as  to  bring  about  a  seri- 
ous business  situation  and  as  to  threaten  even  more  unfortunate  condi- 
tions, in  agriculture  and  the  commercial  business,  and  the  mining  industry, 
and 

WHEREAS,  The  European  market  has  in  the  past  under  ordinary  world 
conditions  served  in  large  measure  as  an  outlet  for  the  American  pro- 
ducer, and 

WHEREAS,  Europe,  although  desperately  in  need  of  American  raw  mate- 
rial and  food  products  today,  both  for  the  purpose  of  feeding  and  clothing 
its  population  and  of  giving  them  employment,  is  unable  to  do  a  large 
volume  of  business  with  the  American  producer  by  reason  of  the  need 
on  the  part  of  the  European  buyer  for  long-term  credits,  and 

WHEREAS,  The  War  Finance  Corporation,  for  the  purpose  of  meeting 
the  world  emergency,  was  vested  by  Congress  in  March,  1919,  with  the 
power  (which  has  not  yet  expired),  either  out  of  funds  heretofore  appro- 
prited  by  Congress  or  out  of  funds  to  be  obtained  from  the  public  by  the 
sale  of  its  bonds,  to  make  advances  on  good  security  to  American  export- 
ers and  American  banks  to  assist  in  the  sale  and  exportation  on  credits 
up  to  five  years  in  duration,  and 

,  WHEREAS,  The  War  Finance  Corporation  did,  up  to  May  10th.  1920, 
demonstrate  its  usefulness  to  the  country  by  assisting  in  the  exportation 
of  American  products  on  credits  or  from  six  months  to  five  years,  and 

WHEREAS,  The  Secretary  of  the  Treasury,  in  May,  1920,  caused  said 
Corporation  to  suspend  such  exercise  of  its  powers  in  the  preservation 
and  stimulus  of  American  export  trade,  although  such  powers  still  exist 
under  the  law,  so  that  said  Corporation  is  today  inactive  at  a  time  when 
the  American  people  have  the  most  urgent  need  for  its  activity,  and 

WHEREAS,  This  meeting  of  the  American  Mining  Congress,  in  Denver, 
Colo.,  November  15,  1920,  is  informed  that  said  Corporation  could  resume 
the  exercise  of  its  said  functions  with  reference  to  export  trade  if  the 
Secretary  of  the  Treasury  would  consent  thereto;  now,  therefore,  be  it 

Resolved,  That  this  meeting  does  hereby  most  earnestly  urge  upon  the 
Secretary  of  the  Treasury  that  he  now  cause  the  War  Finance  Corpora- 
tion to  resume  the  exercise  of  its  powers  under  Section  Twenty-one  of  the 
War  Finance  Corporation  Act  to  make  advances  in  aid  of  the  exporation 
of  American  products  until  such  time  as  its  said  power  in  that  behalf 
shall  have  expired  under  the  law,  or  until  the  present  dire  emergency 
shall  have  passed;  and  further 

Resolved,  That  the  chairman  of  this  meeting  be  and  he  is  hereby 
authorized  and  requested  to  forward  these  resolutions  to  the  Secretary 
of  the  Treasury,  and  a  copy  to  Honorable  William  M.  Calder,  chairman 
of  the  Senate  Committee  on  Reconstruction  and  Production. 

(2)  The  Public's  Interest  In  Patents  of  Invention 

WHEREAS,  Patents  on  inventions  represent  a  monopoly  granted  funda- 
mentally in  the  public's  interests;  and 


54  REPORT  OF  PROCEEDINGS 

WHEREAS,  In  the  case  of  similar  monopolies  such  as  public  franchises 
it  long  ago  became  evident  that  some  form  of  public  administrative  ma- 
chinery such  as  public  service  commissions  was  necessary  to  function  in 
a  way  between  the  issuing  of  franchises  and  final  appeal  to  the  courts; 
and 

WHEREAS,  The  necessity  for  somewhat  similar  general  supervision  of 
monopolistic  elements  in  other  lines  of  business  has  more  recently  been 
generally  organized,  as  for  instance,  through  the  creation  of  the  Federal 
Trade  Commission;  and 

WHEREAS,  The  extension  of  these  same  principles  IT  th?  study  and 
guidance  of  public  policy  with  regard  to  the  interpretation  and  control  of 
patent  rights  appears  to  have  distinctly  lagged  behind  that  of  other  tech- 
nical aspects  of  trade  and  industry;  and 

WHEREAS,  a  broad,  intelligent  and  equitable  pablic  policy  with  regard 
to  patents  of  invention  is  of  vital  importance  to  the  whole  mining  and 
mineral  industry;  now,  therefore,  be  it 

Resolved,  That  The  American  Mining  Congress  appoint  a  committee 
on  patents  of  invention  to  co-operate  with  the  proper  governmental  bu- 
reaus and  committees  of  other  business  and  technical  organizations  in 
working  out  methods  for  insuring  to  the  patentee,  to  industry,  and  to  the 
public  more  comprehensive  and  adequate  guidance  of  public  education 
and  policy  in  the  interpretation  of  patent  rights. 

(3)  Protesting  Against  Abolition  of  Interior  Department 

WHEREAS,  more  than  one-half  of  the  acreage  of  the  United  States  west 
of  a  north  and  south  line  drawn  through  the  eastern  border  of  Colorado 
is  now  owned  by  the  Federal  Government;  and 

WHEREAS,  The  enactment  of  the  Public  Lands  Leasing  Bill  creates  a 
continued  responsibility  upon  the  Federal  Government  in  handling  the 
public  lands  of  the  West;  and 

WHEREAS,  This  vast  expanse  of  territory  contains  more  than  3,000,000  - 
000  tons  of  coal,  untold  oil  reserves,  oil  shale  deposits  of  unmeasured 
value,  water  power  measured  in  productive  force  many  times  greater  in 
value  than  its  oil,  oil  shale  and  coal  reserves  combined,  and  immense 
deposits  of  phosphate  and  other  minerals,  and 

WHEREAS,  The  administration  of  these  vast  resources  will  require  a~i 
increasing  service  from  that  department  which  is  charged  with  the  work 
of  supervising  the  development  of  the  Rocky  Mountain  and  Pacific  Coast 
Western  States,  namely,  the  Department  of  the  Interior;  and 

WHEREAS,  A  proposal  has  been  made  looking  to  the  discontinuance  o? 
the  Interior  Department  and  the  creation  in  its  stead  of  a  Department  o? 
Public  Works;  now,  therefore,  be  it 

Resolved,  That  The  American  Mining  Congress  in  its  twenty-third  an- 
nual session  assembled  in  Denver,  Colorado,  November  15-19.  inclusive 
enters  its  protest  against  the  abolition  of  the  Interior  Department  and 
urges  that  the  Interior  Department  shall  be  continued  for  the  abovo 
weighty  duties  and  as  that  department  through  which  the  mining  indus- 
try of  the  United  States  shall  function  in  Federal  affairs. 

(4)  Division  of  Mines  and  Geology 

WHEREAS,  The  importance  of  the  mining  industry  of  the  United  States 
has  been  better  appreciated  during  the  days  of  the  war  when  it  was 
realized  that  the  production  of  minerals  was  essential  to  the  carrying  on 
of  the  nation's  contests  in  the  great  world  war;  and 


THE  AMERICAN  MINING  CONGRESS  55 


WHEREAS,  The  relative  importance  of  mining  is  shown  by  the  fact  that 
during  the  year  1919  the  railroads  of  the  country  received  from  the  trans- 
portation of  mining  products  approximately  $576,000,000  while  from  the 
transportation  of  manufactured  products  the  total  amount  paid  to  the 
railroads  was  approximately  $168,000,000;  and 

WHEREAS,  Those  two  activities  of  the  Federal  Government  which  have 
rendered  most  specific  service  to  the  mining  industry  are  the  United 
States  Bureau  of  Mines  and  the  United  States  Geological  Survey,  and 

WHEREAS.  It  is  desired  that  these  agencies  with  such  other  agencies  as 
render  service  to  the  mining  industry  shall  be  co-ordinated  in  a  more 
effective  way  than  is  possible  through  the  present  organization  of  the 
Interior  Department;  and 

WHEREAS.  Senate  Bill  No.  4369,  known  as  the  Henderson  Bill,  provides 
for  the  creation  of  a  Division  of  Mines  and  Geology  within  the  Interior 
Department  under  an  Assistant  Secretary  of  the  Interior  to  be  appointed 
for  that  specific  purpose  by  the  President;  now,  therefore,  be  it 

Resolved,  That  the  American  Mining  Congress  in  twenty-third  annual 
session  assembled  at  Denver,  Colo.,  November  15-19  inclusive,  hereby 
expresses  its  approval  of  the  principles  contained  in  the  Henderson  Bill 
and  urges  the  enactment  by  Congress  of  a  bill  embodying  the  principles 
therein  contained. 

(5)  Bureau  of  Public  Works 

WHEREAS,  The  enormous  burden  of  taxation  which  must  be  met  by  the 
industry  of  the  nation  requires  greater  economy  in  the  conduct  of  govern- 
mental affairs, .the  abolition  of  all  useless  expenditures,  the  highest  effi- 
ciency in  every  governmental  agency,  and  the  prevention  of  all  duplica'.' 
ciency  in  every  governmental  agency,  and  the  prevention  of  all  duplica- 
tion of  service  and  expenditure;  and 

WHEREAS,  The  engineering  and  construction  services  of  the  Government 
are  now  lodged  in  various  bureaus  of  the  several  departments;  now, 
therefore,  be  it 

Resolved,  That  the  American  Mining  Congress  in  twenty-third  annual 
session  assembled  in  Denver,  Colo.,  November  15-19,  inclusive,  hereby 
expresses  its  belief  that  a  Bureau  of  Public  Works  should  be  created  under 
the  direction  of  which,  so  far  as  feasible,  all  engineering  and  construction 
features  of  the  government  service  should  be  consolidated  to  the  end  that 
greater  economy,  higher  efficiency,  and  more  effective  service  shall  be 
rendered,  and  all  duplication  of  effort  shall  be  prevented. 

(6)  Oil-Shale  Experimental  Station 

WHEREAS,  For  the  past  several  years  the  domestic  production  of  petro- 
leum has  been  insufficient  to  satisfy  the  domestic  requirements  of  the 
United  States,  and; 

WHEREAS,  The  deficit  between  domestic  production  and  consumption  of 
petroleum  is  estimated  to  be  more  than  100,000,000  barrels  for  the  year 
1920,  making  it  necessary  to  import  enormous  quantities  of  oil  from 
Mexico  and  to  draw  continually  on  our  rapidly  waning  stocks  of  petro- 
leum, and 

WHEREAS,  The  present  rate  of  increase  of  consumption  of  petroleum  in 
the  United  States  makes  it  appear  that  in  the  near  future  the  nation  will 
be  largely  dependent  on  foreign  sources  for  its  petroleum  supplies,  a  con- 
dition which  will  place  the  nation  in  a  dangerous  position  in  time  of  war 
and  tend  to  a  loss  of  commercial  supremacy  in  time  of  peace,  and 


56  REPORT  OF  PROCEEDINGS 

WHEREAS,  The  nation's  enormous  deposits  of  oil  shales  represent  a  re- 
source which,  when  properly  developed,  will  give  the  nation  a  practically 
inexhaustible  domestic  source  of  petroleum,  and 

WHEREAS,  The  commercial  development  of  these  oil  shales  can  be  im- 
measurably facilitated  by  properly  conducted  scientific  research,  and 

WHEREAS,  The  United  States  Bureau  of  Mines,  a  federal  agency  properly 
qualified  to  conduct  such  investigations,  has  requested  of  the  Congress  of 
the  United  States  an  appropriation  for  the  construction,  equipment  and 
operation  of  an  experimental  station  for  such  investigations,  therefore 
be  it 

Resolved,  That  this,  the  twenty-third  annual  convention  of  the  American 
Mining  Congress  does  hereby  approve  of  the  plans  of  the  U.  S.  Bureau  of 
Mines  for  investigations  on  oil  shale  and  further  urges  upon  the  Congress 
of  the  United  States  the  necessity  of  favorably  considering  the  appropria- 
tion requested. 

(7)  Opposing  Federal  Control  of  Bituminous  Coal  Industry 

WHEREAS,  For  the  past  eleven  months  in  certain  sections  of  the  United 
States,  there  has  existed  a  shortage  of  bituminous  coal,  and 

WHEREAS,  It  has  been  charged  that  certain  tonnage  of  bituminous  coal 
in  certain  sections  of  the  United  States  has  been  sold  by  the  producers  at 
excessive  and  exorbitant  figures,  and 

WHEREAS,  Today  in  the  minds  of  certain  of  our  lawmakers  exists  a 
strong  belief  that  government  supervision  and  control  of  the  bituminous 
coal  industry  is  of  earnest  consideration,  therefore,  be  it 

Resolved,  That  the  fuel  supply  problem,  in  so  far  as  bituminous  coal  is 
concerned,  is  one  of  transportation  and  that  the  recent  evils  of  coal 
speculation  were  the  result  of  such  transportation  shortage,  and  should 
not  be  charged  against  the  coal  producers  who  were  helpless  in  this 
emergency,  and  be  it  further 

Resolved,  That  we  feel  that  no  condition  exists  in  the  bituminous  coal 
industry,  at  this  time,  calling  for  federal  control  of  the  bituminous  coal 
mines  of  our  country,  such  as  has  been  advocated  by  Senator  Calder  of 
the  Senate  Committee  on  Reconstruction  and  "that,  if  the  industry  is  let 
alone  that  the  present  co-operation  between  transportation,  producers  and 
labor  will  continue,  and  the  present  high  tonnage  production  will  be 
maintained  which  will  necessarily  clear  away  certain  evils  heretofore 
complained  of. 

(8)  This  Resolution,  on  Blue-Sky  Legislation  Was  Rejected 

(9)  Against  Pending  Blue-Sky  Legislation 

Be  It  Resolved,  by  the  delegates  to  the  twenty-third  annual  convention 
of  The  American  Mining  Congress,  held  in  Denver,  Colo.,  November  15 
to  19,  1920,  that  we  are  opposed  to  all  proposed  enactments  now  pending 
in  Congress  providing  for  so-called  "Blue-Sky"  legislation. 

(10)  The  McFadden  Bill 

WHEREAS,  The  Government  of  the  United  States  is  justly  committed  to 
the  gold  standard;  and 

WHEREAS,  The  maintenance  of  a  healthy  gold  mining  industry  is  abso- 
lutely essential  to  the  maintenance  of  a  gold  standard;  and 

WHEREAS,  The  gold  mining  industry  of  the  United  States  is  in  tleplor- 


THE  AMERICAN  MINING  CONGRESS  57 

able  straits,   having  almost   ceased   to  function,   and    it   is   necessary  to 
apply  immediate  measure  for  relief;  and 

WHEREAS,  The  McFadden  Bill,  H.  R.  13201,  offers  the  best  present  solu- 
tion of  the  problem; 

Resolved.  That  The  American  Mining  Congress,  in  convention  as- 
sembled, heartily  endorses  the  McFadden  Bill,  and  pledges  its  support  to 
the  measure,  and  urges  a  like  support  on  the  part  of  all  our  citizens  who 
have  at  heart  the  maintenance  of  the  gold  standard  and  the  common  wel- 
fare of  the  country. 

(11)  Proposal  to  Amend  Oil-Shale  Section  of  Leasing  Law 

WHEREAS,  in  various  parts  of  the  West,  particularly  in  the  States  of 
Utah,  Colorado,  and  Wyoming,  there  exist  bedded  deposits  of  sandstone, 
limestone,  and  other  rocks  impregnated  with  bituminous  or  similar  or- 
ganic matter  in  solid  or  semi-solid  form  which  may  be  utilized  commer- 
cially and  which  are  not  oil  shales,  and 

WHEREAS,  No  provision  for  prospecting,  developing,  or  leasing  such 
deposits  is  made  under  the  existing  laws;  therefore,  be  it 

Resolved.  That  The  American  Mining  Congress  recommend  to  the  Con- 
gress of  the  United  States  that  Section  21  of  the  Act  of  February  25,  1920 
(Public  146),  known  as  the  Oil  Shale  Section  of  the  Leasing  Law,  be 
amended  so  as  to  include  all  lands  containing  valuable  deposits  of  bitu- 
minous or  similar  organic  material  in  solid  or  semi  solid  form. 

(12)  Bi-Partisan  Tax  Board 

WHEREAS,  The  immediate  need  of  the  present  moment  is  a  definite 
fixing  of  the  past  tax  liability  for  each  taxpayer,  especially  for  the  war 
years,  1917,  1918,  and  1919,  and  this  need  is  emphasized  by  the  present 
unstable  business  conditions;  and 

WHEREAS.  This  need  for  prompt  final  tax  determination  for  the  war 
years  is  so  vital  as  to  require  immediate  provision  for  final  settlement  of 
all  unsettled  cases  for  the  years  1917,  1918,  1919; 

Resolved,  That  The  American  Mining  Congress  recommend  to  the  Fed- 
eral Congress  the  enactment  of  a  statute  authorizing  the  President  to 
appoint,  by  and  with  the  consent  of  the  Senate,  a  bi-partisan  board  of  ten 
men,  composed  of  lawyers,  accountants,  engineers  and  business  men,  who 
will  sit  for  a  period  of  one  year,  to  pass  upon  and  settle  the  cases  of  taxa- 
tion arising  during  or  consequent  upon  the  war-time  period  of  1917  to 
1919,  both  inclusive.  The  powers  of  such  board  to  be  of  the  broadest 
character;  to  summon  witnesses,  to  compel  the  production  of  books  and 
papers,  to  determine  questions  of  fact  and  law,  and  to  make  assessments 
under  both  the  general  terms  of  the  statutes  and  those  special  remedial 
provisions  embodied  in  Section  210  of  the  Revenue  Act  of  1917  and  Sec- 
tions 327  and  328  of  the  Revenue  Act  of  1918. 

The  board  to  be  given  power  to  compromise  taxes  in  cases  where  the 
need  arises,  and  should  be  given  a  power  which  is  not  now  provided  for  in 
our  statutes,  namely,  to  postpone  the  payment  of  taxes  for  reasonable 
periods,  or  to  provide  for  their  payment  in  installments  where  the  board 
deems  it  necessary  in  order  to  prevent  undue  hardship  on  the  taxpayer, 
requiring,  of  course,  adequate  security  from  the  taxpayers  to  safeguard 
the  interests  of  the  revenue. 

We  strongly  urge  that  the  board  shall  be  an  independent  body  separate 
and  apart  from  the  Bureau  of  Internal  Revenue  and  the  Treasury  Depart- 
ment. 

The  board  should  have  authority  tc  remand  the  case  to  the  Bureau  of 


58  REPORT  OF  PROCEEDINGS 

Internal  Revenue,  with  instructions  how  to  close  it,  or  on  the  other  hand 
to  summarily  dispose  of  the  case  and  determine  the  final  assessment. 

If,  however,  a  determination  and  assessment  is  made  in  the  case  of  any 
taxpayer  and  an  agreement  in  writing  signed  by  the  taxpayer  and  the 
board  that  such  determination  and  assessment  shall  be  final  and  con- 
clusive, then  (except  upon  a  showing  of  fraud,  malfeasance  or  misrepre- 
sentation of  fact  materially  affecting  the  determination  or  assessment  thus 
made)  the  statute  shall  provide  that  the  case  shall  not  be  reopened  or  the 
determination  and  assessment  modified  by  any  officer,  employee  or  agent 
of  the  United  States,  and  no  suit,  action  or  assessment  shall  be  enter- 
tained by  any  court  of  the  United  States. 

The  board  to  be  a  large  board,  OILG  composed  of  ten  members  since  the 
work  it  will  perform  may  be  divided  into  three  or  four  general  classes. 
The  full  board  should  not  be  required  to  sit  in  every  case;  three  members 
should  constitute  a  sufficient  quorum  to  hear  and  determine  the  case, 
although  more  members  may  sit  on  complicated  or  important  cases.  The 
decision  in  each  case  should  be  subject  to  the  written  approval  of  a 
majority  of  the  board,  including  those  members  who  sat  on  the  case. 

The  board  shall  have  the  power  to  refuse  to  hear  any  appeals  that  they 
may  deem  frivolous  or  vexatious.  It  shall  prescribe  rules  and  regulations 
for  its  procedure  and  the  hearing  of  cases.  Proper  recourse  to  the  courts 
to  lie  from  any  decision  of  the  board,  by  any  taxpayer  dissatisfied  with 
the  decision  of  the  board. 

A  sufficient  appropriation  should  be  made  to  compensate  adequately  the 
members  of  the  board  and  to  enable  the  board  to  employ  an  adequate  staff 
of  clerks  and  assistants.  In  addition  it  should  have  power  to  call  upon 
the  Bureau  of  Internal  Revenue  for  such  auditing  or  other  assistance  a,s 
it  might  require  in  any  particular  case. 

We  believe  the  energetic  impartial  operation  of  such  a  board,  clothed 
with  broad  and  ample  powers  suggested,  would  result  in  the  settlement 
of  practically  all  the  cases  of  war  taxation  within  a  year,  and  leave  the 
Department  free  to  carry  on  its  current  work.  The  expeditious  settlement 
and  assessments  accomplished  through  the  medium  of  such  a  board  would 
save  in  interest  alone  many  times  the  appropriation  needed  therefor. 

(13)  Urging  Repeal  of  War  and  Excess  Profits  Taxes 

WHEREAS,  The  burdens  created  by  the  Excess  War  Profits  Tax  Law  have 
become  an  excessive  burden  upon  business  and  a  deterrent  to  investment 
and  the  undertakings  of  new  business  enterprises;  now,  therefore,  be  it 

Resolved,  That  we  most  earnestly  urge  upon  Congress  the  immediate 
repeal  of  the  War  Profits  and  Excess  Profits  Taxes. 

(14)  Deduction  and  Depletion 

WHEREAS,  The  Department  of  Internal  Revenue,  having  under  the  1909 
Tax  Law  contended  that  the  net  proceeds  of  mines  constituted  profits  and 
were  all  taxable  without  any  deduction  for  depletion,  basing  such  conten- 
tion on  the  general  practice  of  the  mining  industry  at  that  time,  and 
having  succeeded  in  establishing  that  view  in  the  courts;  be  it 

Resolved,  That  it  is  the  sense  of  this  Congress  that  the  rule  now 
adopted  by  the  Bureau  of  Internal  Revenue  in  ascertaining  the  invested 
capital  of  mining  corporations  by  which  a  deduction  is  made  from  profits 
for  each  unit  of  minerals  removed  since  the  commencement  of  mining 
operations  down  to  the  year  1916,  regardless  of  actual  conditions,  actual 
facts  and  valuations  of  the  mining  property,  is  inconsistent  and  unfair; 
and  it  is  further 

Resolved,  That  this  Congress  take  steps  to  present  its  reasons  to  the 
Bureau  of  Internal  Revenue  supporting  an  abrogation  of  such  rule. 


THE  AMERICAN  MIXING  CONGRESS  50 

(15)  Tariff  On  Metals  and  Minerals 

Be  It  Resolved,  By  the  American  Mining  Congress  in  Twenty-third  An- 
nual Convention  assembled,  that  we  favor  the  imposition  at  the  earliest 
possible  date  of  such  United  States  custom  duties  or  tariffs  on  metals, 
minerals,  and  metalliferous  and  mineral  products,  presented  for  entry 
into  the  United  States  from  foreign  countries  as  shall  be  sufficient  to 
enable  United  States  producers  of  like  or  similar  metals,  minerals,  and 
metalliferous  and  mineral  products,  to  meet  such  foreign  competition  and 
continue  to  maintain  American  standards  of  wages  and  living  conditions. 

(16)  Revision  of  Freight  Rates  On  Ores 


BY   CALIFORNIA   METAL   &   MINERAL   PRODUCERS'    ASSOCIATION. 
COLORADO  CHAPTER,  AMERICAN  MINING  CONGRESS. 
COLORADO  METAL  MINING  ASSOCIATION. 
IDAHO  MINING  ASSOCIATION. 
MONTANA    MINING   ASSOCIATION. 
NEVADA  MINE  OPERATORS'  ASSOCIATAION. 
NEW  MEXICO  CHAPTER,  AMERICAN  MINING  CONGRESS. 
UTAH  CHAPTER,  AMERICAN  MINING  CONGRESS. 
WASHINGTON    STATE  METAL   MINING  ASSOCIATION. 

WHEREAS.  The  continued  production  of  metals  and  consequently  the 
employment  of  large  numbers  of  men  as  well  as  the  profitable  operations 
of  the  ore  carrying  railroads  are  all  dependent,  to  a  very  large  extent, 
upon  reasonable  and  living  freight  rates;  and 

WHEREAS.  Due  to  the  peculiar  character  of  the  rate  structure  under 
which  the  ores  are  moved,  the  rate  advances  of  June  25,  1918,  and  of 
August  26,  1920,  have  resulted  in  placing  an  undue  proportion  of  the  bur- 
den of  furnishing  additional  revenue  to  the  carriers  upon  the  metal  min- 
ing, smelting  and  refining  business;  therefore,  be  it 

Resolved,  That  in  the  opinion  of  this  Congress  immediate  steps  should 
be  taken  by  the  carriers  and  ore  producers  and  shippers,  jointly,  to  secure 
such  readjustment  and  revision  of  the  present  ore  rates  as  will  permit  of 
the  continued  operation  of  the  metal  mines  and,  at  the  same  time,  will 
give  to  the  carrier  a  just  and  reasonable  compensation  for  the  services 
rendered  by  it. 

(17)     Approving  Mining  Congress  Stand  On  Minerals  Separation 

WHEREAS,  On  November  12,  1918.  the  Federal  Trade  Commission  com- 
menced a  proceeding  against  the  Minerals  Separation  North  American 
Corporation;  and 

WHEREAS,  The  American  Mining  Congress  has  lent  its  assistance  in  de- 
veloping and  presenting  evidence  in  connection  with  this  proceeding;  now 
therefore,  be  it 

Resolved.  By  The  American  Mining  Congress  in  Convention  assembled, 
with  members  and  representatives  present  from  every  mining  State  in 
the  Union; 

That  The  American  Mining  Congress  hereby  indorses  and  commends 
the  proceeding  of  the  Federal  Trade  Commission  against  the  Minerals 
Separation  North  American  Corporation,  and  indorses  and  approves  the 
action  of  the  officers  and  counsel  of  The  American  Mining  Congress  in 
supporting  the  Commission's  proceeding;  and  be  it  further 

Resolved,  That  The  American  Mining  Congress  hereby  pledges  the  as- 
sistance of  its  officers,  its  counsel,  its  chapters,  and  its  members  to  assist 
the  Federal  Trade  Commission  in  this  proceeding. 


60  REPORT  OF  PROCEEDINGS 

(18)  War  Minerals  Relief  Appropriations 

Be  It  Resolved,  That  The  American  Mining  Congress  urge  the  retention 
in  statu  quo  of  the  appropriation  provided  in  Section  5,  of  the  Act  of 
March  2,  1919  (40th  U.  S.  Statutes,  page  1272),  until  such  time  as  further 
congressional  legislation  be  enacted  and  the  claimants  under  this  said 
Act  of  March  2,  1919,  shall  have  received  the  relief  intended  to  be  granted 
thereunder,  and  that  the  Executive  Committee  of  the  Board  of  Directors 
of  The  American  Mining  Congress  are  empowered  to  take  such  action  in 
this  behalf  as  they  deem  necessary  and  proper. 

(19)  Right  of  Appeal  for  War  Mineral  Claimants 

WHEREAS,  In  Section  5  of  the  Act  of  March  2,  1919  (40th  Statutes, 
page  1272),  provision  was  made  to  pay  producers  of  chrome,  tungsten, 
manganese  and  pyrites  net  losses  suffered  by  them  in  an  effort  to  comply 
with  the  requests  or  demands  of  the  Governmental  agencies  mentioned 
therein  to  produce  the  said  minerals  required  by  the  exigencies  of  the  war 
and  appropriating  the  sum  of  $8,500,000  therefor;  and 

WHEREAS,  Under  the  constructions  which  have  been  placed  upon  this 
law,  many  claimants  thereunder  protest  that  they  have  not  received  the 
relief  this  law  was  intended  to  administer;  and 

WHEREAS,  The  present  administration  of  this  Act  is  approaching  com- 
pletion; therefore,  be  it 

Resolved,  That  the  American  Mining  Congress  urges  the  immediate  pas- 
sage of  H.  R.  13091  by  the  House  of  Representatives,  which  bill  has  already 
been  passed  by  the  Senate,  and  been  favorably  recommended  to  the  House 
by  unanimous  report  of  the  Committee  on  Mines  and  Mining,  and  accords 
to  claimants  who  have  not  received  adequate  awards  under  this  Act  the 
right  of  appeal  to  the  Court  of  Claims  from  the  decision  of  the  Secretary 
of  the  Interior. 

(20)  Urging  Passage  of  Timberlake  Bill 

Be  it  Resolved,  That  the  American  Mining  Congress  favors  the  speedy 
passage  of  the  Timberlake  Bill  (H.  R.  4437)  for  the  protection  of  tungsten 
and  its  products,  which  has  passed  the  House,  and  is  now  pending  upon 
the  calendar  of  the  Senate,  with  a  favorable  report  from  the  Senate 
Finance  Committee. 

(21)  To  Prevent  Dumping 

Be  It  Resolved,  That  the  American  Mining  Congress  support  legislation 
to  prevent  the  dumping  of  the  products  of  foreign  mineral  industries  on 
the  shores  of  this  country  at  prices  so  far  below  the  cost  of  domestic  pro- 
duction as  to  make  competition  of  domestic  mineral  industries  impossible. 

(22)  Better  Information  on  Mines  and  Quarries 

Resolved,  By  the  American  Mining  Congress  in  convention  assembled, 
that  we  favor  and  will  co-operate  with  such  joint  action  by  the  Federal 
Congress,  the  Bureau  of  the  Census  and  such  other  governmental  agencies 
as  may  beneficially  participate  therein  to  the  end  that  more  informative 
data  than  those  now  available  be  collected,  compiled  and  published  by  the 
national  Government,  and  that  if  found  necessary  to  accomplish  this  re- 
sult, a  special  census  of  mines  and  quarries  be  authorized  and  made. 


THE  AMERICAN  MINING  CONGRESS  01 

(23)  For  Reduction  in  Freight  and  Price  Charges 

Be  It  Resolved,  That  in  order  to  bring  about  a  return  to  normal  condi- 
tions as  rapidly  as  possible,  it  is  the  judgment  and  request  of  the  Ameri- 
can Mining  Congress  that  the  manufacturers  and  sellers  of  mining  sup- 
plies and  equipment  reduce  prices,  and  public  carriers  reduce  freight 
charges  in  accord  with  the  present  economic  trend,  to  the  end  that  the 
mining  industry  may  resume  its  normal  activity. 

(24)  Resolution  of  Appreciation 

Thanks  were  given  to  the  City  of  Denver  and  State  of  Colorado,  their 
respective  officials,  the  press,  and  all  others  who  assisted  in  facilitating 
the  business  of  the  Convention  of  the  American  Mining  Congress. 

(25)  Armenian  Relief 

As  appears  on  page  51. 

The  next  order  of  business  is  a  discussion  of  plans  for  the  twenty- 
fourth  Annual  Convention.  It  should  be  understood  in  advance  that  this 
is  a  mere  discussion,  as  the  assignment  of  the  place  for  the  next  annual 
meeting  is  left  to  the  directors;  but  discussion  at  this  time  and  presenta- 
tion as  to  the  advantages  of  their  cities  is  in  order. 

A  MEMBER:     I  would  like  to  offer  a  resolution. 

(Reading  resolution  that  the  next  convention  be  located  in  some  city 
east  of  the  Mississippi  River  easily  accessible  to  all  points,  and  recom- 
mending Atlantic  City,  N.  J.;  Chicago,  III.,  and  Pittsburgh,  Pa.] 

PRESIDENT  WELLS:  I  think  that  should  be  in  the  form  of  a  discus- 
sion, instead  of  a  resolution. 

THE  MEMBER:  The  resolution  is  merely  to  get  it  before  the  Conven- 
tion, the  idea  being  that  some  of  these  cities  offer  more  advantages. 

PRESIDENT  WELLS:      You  have  already  accomplished  your  purpose. 

ASSISTANT  SECRETARY  BURNS:  We  have  had  three  invitations, 
as  stated,  one  from  Atlantic  City,  and  we  have  a  number  of  invitations 
which  are  too  long  to  read.  I  might  state  that  I  visited  Atlantic  City, 
after  receiving  these  invitations  from  the  Atlantic  City  Publicity  Bureau, 
the  Chamber  of  Commerce  of  Atlantic  City,  and  the  Atlantic  City  Hotel 
Men's  Association.  I  find  that  there  is  a  very  fine  exposition  building  on 
the  pier,  with  something  like  68,000  ft.  of  space,  advantageously  located, 
with  plenty  of  hotel  accommodations,  and  they  have  promised  not  to 
increase  their  hotel  rates. 

End  of  Sixth  Session 

PRESIDENT  WELLS:  Is  there  any  other  business  to  be  presented? 
If  not,  I  want  personally  to  thank  you  for  the  loyal  support  that  you  have 
given  me,  for  the  friendly  feeling  that  I  have  been  able  to  experience  in 
calling  upon  many  of  you  at  various  times  to  help  the  work  of  the  Con- 
gress, and  to  thank  you  in  particular  for  so  cheerfully  coming  here  to 


62  REPORT  OF  PROCEEDINGS 

Denver,  because  I  really  had  a  good  deal  to  do  with  having  the  Conven- 
tion here  this  year,  as  other  places,  I  might  say,  were  rather  slow  about 
guaranteeing  anything  in  the  way  of  expense  funds,  and  so  on,  coming 
here  where  a  number  of  us  were  at  home  and  could  put  the  thing 
through.  I  do  appreciate  very  cordially  that  so  many  of  you  have  come 
here. 

And  now  I  turn  you  over,  and  with  you  this  gavel,  to  the  new  presi- 
dent, Mr.  Loring,  and  I  beg  you  to  support  him  even  more  loyally  than 
you  have  me,  and  to-  accept  from  me  the  assurance  that  Mr.  Loring  will 
carry  you  just  as  far  as  you  elect.  (Applause.) 

MR.  W.  J.  LORING:  Mr.  Buckeley  Wells,  ladies  and  gentlemen:  I  am 
not  going  to  make  a  long  speech.  The  hour  is  getting  late.  I  will  sim- 
ply say  that  it  will  be  my  endeavor  to  do  the  best  that  is  in  me,  and  at 
the  same  time  follow  in  the  successful  footsteps  of  my  predecessor.  1  am 
going  to  ask  all  members  of  the  American  Mining  Congress  to  assist  me 
in  my  endeavor  to  do  as  well,  if  not  better,  than  Mr.  Buckeley  Wells  has 
done.  I  wish  to  thank  you  for  your  confidence,  and  I  shall  put  my  heart 
into  the  work,  and  with  your  assistance,  I  think  we  can  go  forward 
rapidly.  I  think  you.  (Applause.) 


THE  AMERICAN   MINING  CONGRESS  (53 

GOLD  CONFERENCE 

American  Mining  Congress 

TUESDAY,  NOVEMBER   16,  1920 

Mr.  H.  N.  LAWRIE,  economist  for  the  American  Mining  Congress, 
presided. 

CHAIRMAN    LAWRIE:       Ladies    and    gentlemen:       An    able   address 

Binding  our  Financial  Wounds 

was  delivered  last  night  on  the  subject  of  binding  up  the  wounds  of  the 
war.  The  maintenance  of  a  normal  gold  production  in  this  country  is 
a  very  essential  part  of  any  program  to  bind  up  our  financial  wounds, 
and  thus  safeguard  a  return  to  normal  financial  conditions.  For  five 
years  the  economic  pressure  has  been  operating  to  retard  gold  produc- 
tion, and  no  remedy  has  been  applied.  We  have  yet  to  go  through  a 
period  which,  according  to  the  opinions  of  many  economists,  may  be 
ten  years  and  may  even  extend  further,  before  the  dollar  of  1914  will  have 
regained  its  purchasing  power,  in  terms  of  commodities.  With  that  in 
view,  we  are  approaching  a  period  where  the  economic  stress  will  prob- 
ably not  be  any  less  for  over  the  next  five-year  period  than  that  which 
has  been  sustained  by  the  gold-mining  industry  during  the  period  of  1915 
to  1920. 

How  Price  of  Gold  was  Fxed 

Some  people  have  asked  whether  the  price  of  gold  is  fixed,  and  there 
seems  to  be  an  indistinct  idea  as  to  why  that  should  be.  Briefly,  there 
are  480  grains  of  gold  in  an  ounce,  and  by  United  States  statute  there 
are  23.22  grains  of  fine  (pure)  gold  in  the  standard  dollar.  Dividing 
the  number  of  grains  in  an  ounce  by  the  number  of  grains  in  a  dollar, 
the  quotient  obtained  is  20.6718  dollars,  the  price  of  the  fine  gold  ounce. 
There  is  no  question  that  the  price  of  gold  has  been  arbitrarily  fixed  by 
the  Government.  Also  there  is  no  question  because  of  the  fact  that  the 
price  of  gold  is  fixed,  gold  does  not  respond  to  the  law  of  supply  and 
demand;  nor  does  it  take  on  the  market  conditions  that  prevail  with 
regard  to  the  production  of  and  consumption  of  any  other  commodity. 

It  is  my  purpose  to  review  briefly  the  exact  loss,  based  upon  the  pro- 
duction of  new  gold  in  the  United  States  during  the  past  five  years,  due 
to  the  depreciated  purchasing  power  of  the  dollar,  assuming  that  had 
gold  been  free  to  respond  to  the  law  of  supply  and  demand  it  would 
have  risen  at  least  to  the  level  of  other  commodities  in  the  country.  That 
is  a  fair  assumption,  because  the  industrial  arts  are  consuming  more  than 


04  REPORT  OF  PROCEEDINGS 

is  extracted  from  the  mines.  Naturally,  had  the  gold  throughout  the 
world  been  free  to  respond  to  the  law  of  supply  and  demand,  it  would 
probably  have  been  at  still  higher  level  than  all  other  commodities. 

[Mr.  Lawrie  then  showed  and  explained  two  charts  that  he  had  pre- 
pared, which  will  be  found  on  page  615  of  the  Proceedings,  under  the 
head  of  'The  Industrial  Gold  Consumers'  Subsidy.'] 

CHAIRMAN  LAWRIE:  You  will  be  particularly  interested  in  listen- 
ing to  the  review  of  Mr.  George  E.  Collins  of  Colorado,  entitled  'The 
Condition  of  the  Gold  Producer  in  Colorado.' 

[Mr.  Collins'  paper  will  be  found  on  page  625  of  the  Proceedings.] 

MR.  PERKINS:  Are  not  bankers  buying  gold  in  England  at  $28  an 
ounce  at  the  present  rate  of  exchange  and  making  a  large  profit? 

MR.  COLLINS:  No,  I  do  not  think  so.  I  will  ask  the  Chairman  to 
answer  thai  question,  because  it  needs  a  rather  involved  explanation. 

Premium  for  Gold  in  England 

CHAIRMAN  LAWRIE:  I  cannot  figure  that  at  all.  The  exchange 
premium  is  based  already  upon  the  discount  and  sterling  exchange.  The 
price  paid  for  gold  in  London  is  a  direct  accounting  of  the  exchange  dis- 
count. If  a  man  had  American  dollars  and  paid  117  shillings  [$28  normal 
exchange]  an  ounce  for  gold  in  London,  brought  it  to  New  York,  and  sold 
it  for  dollars,  the  transaction  would  wipe  itself  out  because  he  would 
have  to  pay  transportation  costs  and  insurance. 

MR.  PERKINS:     That  is  practically  $5  on  the  other  side. 

CHAIRMAN  LAWTRIE:  No,  it  is  not  five  dollars;  it  is  not  dollars;  it 
is  still  pounds  when  you  are  using  it  on  the  other  side. 

MR.  PERKINS:     The  pound  is  worth  five  dollars. 

CHAIRMAN  LAWRIE:  No,  I  should  say  not.  I  do  not  see  how  you 
base  American  dollars  in  London  for  pounds  on  the  basis  of  the  par 
exchange.  You  cannot  buy  a  pound  sterling  at  $3.35  and  expect  to  get  $5 
for  it.  When  you  make  a  transfer  from  sterling  to  dollars,  you  come 
back  to  the  point  of  origin. 

MR.  H.  W.  SEAMAN:  You  can  buy  all  you  want  in  the  United  States 
Treasury  for  $20.67  an  ounce,  notwithstanding  it  costs  $30  to  $35  to 
produce  it. 

CHAIRMAN  LAWRIE:     Not  at  five  dollars;   it  is  a  pound  still. 
MR.  PERKINS:     That  is  the  point  I  make. 

CHAIRMAN  LAWRIE:  Mr.  Milnor  Roberts,  Dean  of  the  College  of 
Mines,  University  of  Washington,  who  has  had  an  extended  experience 
with  gold-mining  conditions  in  Alaska,  has  prepared  an  interesting  view 
of  those  conditions,  but  he  is  unable  himself  to  attend.  Mr.  Horace  F. 


THE  AMERICAN  MINING  CONGRESS  65 

Lunt,   the   State   Commissioner  of  Mines   of   Colorado,   will  present  Mr. 
Roberts'  paper  at  this  time. 

Alaska  and  Oregon 

MR.  JLUNT:  Mr.  Chairman,  ladies  and  gentlemen:  The  title  of  Mr. 
Roberts'  paper  is  'Gold  Mining  Conditions  in  Alaska.' 

[Mr.  Roberts'  paper  will  be  found  on  page  632  of  the  Proceedings.] 

CHAIRMAN  LAWRIE:  Gold-mining  conditions  in  Oregon  probably 
vary  from  those  elsewhere,  and  Mr.  H.  M.  Parks,  Director  of  the 
Oregon  Bureau  of  Mines  and  Geology,  will  give  us  a  brief  review  of  the 
present  conditions  in  that  State. 

[Mr.  Parks'  paper  will  be  found  on  page  645  of  the  Proceedings.] 
CHAIRMAN  LAWRIE:      I   have   received  a  resolution  adopted  by  the 
Chamber  of  Mines  and  Oil  of  Los  Angeles,  Cal.     It  is  a  direct  endorse- 
ment, and  as  it  is  brief  I  will  read  and  put  it  into  the  record: 

"WHEREAS,  the  production  of  gold  in  the  United  States  is  steadily 
declining  because  the  margin  between  the  cost  of  production  and  the  fixed 
price  of  gold  is  being  absorbed  by  high  costs  of  labor  and  supplies,  and, 

"WHEREAS,  gold  mining  has  ceased  to  be  profitable  in  many  cases,  and 
this  fact  has  discouraged  prospecting  and  exploration  and  has  even 
compelled  many  properties  to  close  down,  which  may  be  expected  to  result 
in  permanent  injury  to  such  properties,  and 

"WHEREAS,  the  gold  standard  has  been  and  will  be  further  imperiled 
unless  action  is  taken  to  stimulate  the  production  of  gold, 

"Now,  THEREFORE,  BE  IT  RESOLVED,  that  the  Chamber  of  Mines  and  Oil, 
representing  the  mining  industry  of  the  Southwest,  indorses  the  McFad- 
den  Gold  bill  (H.  R.  13201)  and  urges  upon  the  Congress  of  the  United 
States  that  it  enact  this  legislation  which  provides  for  the  protection  of 
the  monetary  gold  reserve  by  maintenance  of  the  normal  gold  production 
of  the  United  States,  and  creates  the  machinery  by  which  the  con- 
sumer of  commodity  gold  in  manufactures  and  the  arts  may  pay  an  excise 
covering  the  cost  of  its  production, 

"AND  BE  IT  FURTHER  RESOLVED,  that  the  duly  authorized  delegates 
of  the  Chamber  of  Mines  and  Oil  to  the  National  Gold  Conference 
of  the  American  Mining  Congress  Convention  at  Denver,  Colo., 
November  15-20,  1920,  be  instructed  to  present  this  resolution,  advis- 
ing the  Conference  of  its  adoption." 

View; 

CHAIRMAN  LAWRIE  (continuing) :  Here  is  a  letter  that  was  writ- 
ten by  Prof.  Carl  C.  Plehn,  head  of  the  Department  of  Economics,  Uni- 
versity of  California.  Many  of  you  will  recall  having  listened  to  an 
interesting  address  by  him  before  the  Gold  Conference  at  Reno,  Nev., 
in  September,  19i8.  He  regrets  that  he  cannot  be  with  us  on  this  occa- 


s  of  Another  Economist 


66  REPORT  OF  PROCEEDINGS 

sion,  but  this  i&  his  statement:  "I  wish  I  could  convey  to  the  Convention 
one  thought:  Gold  money  is  sound  money.  None  other  is  sound.  By 
fostering  this  sentiment  your  Convention  can  do  the  country  a  great 
service." 

Committee  Suggested 

In  order  to  facilitate  the  businesS  of  the  Gold  Conference,  it  may  be 
well  to  appoint  a  committee  for  the  consideration  of  whatever  matters 
this  Gold  Conference  may  want  to  recommend  to  the  general  convention 
for  adoption,  and  to  draft  the  same.  If  the  gentlemen  will  be  kind 
enough  to  serve,  I  would  like  to  appoint  Messrs.  H.  W.  Seaman,  W.  J. 
Loring,  and  E.  P.  Mathewson.  It  is  a  subject  we  should  debate  at  some 
length  after  listening  to  this  address,  as  to  what  action  this  Convention 
may  take  which  will  more  facilitate  the  consideration  of  this  relief  legis- 
lation; and  then  again  the  formulation  of  it  is  another  matter  requiring 
some  little  detail.  At  the  last  Convention  we  had  a  similar  committee, 
and  it  reported  back  to  the  Gold  Conference.  The  action  was  confirmed 
there,  and  the  resolution  was  turned  over  to  the  General  Resolutions  Com- 
mittee of  the  Convention  of  the  whole  and  received  its  endorsement  there, 
so  I  presume  that  the  machinery  will  be  the  same  this  year  as  last. 

No  other  speakers  being  available  at  this  'moment,  we  will  adjourn  until 
the  afternoon  session. 


The  meeting  convened  at  2  o'clock  on  November  16,  1920,  Mr.  E.  P. 
Mathewson  presiding. 

CHAIRMAN  MATHEWSON:  The  meeting  will  come  to  order.  We  are 
expecting  Governor  Emmett  Boyle  of  Nevada  to  speak  this  afternoon.  In 
the  meantime,  Mr.  B.  C.  Yates,  representing  the  gold  industry  of  South 
Dakota,  will  give  us  a  talk. 

Mining  in  South  Dakota 

MR.  YATES:  Ladies  and  gentlemen:  The  subject  assigned  to  me 
reads  like  this:  'What  Failure  Means  to  South  Dakota.'  In  the  first 
place,  I  want  to  say  that  I  am  not  going  to  tell  you  what  failure  means 
to  South  Dakota,  because  I  do  not  believe  that  the  gold  miner  has  ever 
admitted  failure.  Perhaps  the  best  way  to  show  what  failure  means  to 
obtain  an  increased  price  of  gold  in  South  Dakota  is  to  present  the  true 
conditions  of  that  State  with  the  more  apparent  reason  for  those  condi- 
tions. Briefly  stated,  the  gold-mining  industry  of  the  Black  Hills  of 
South  Dakota  is  in  a  state  of  disintegration,  not  because  the  mines  are 
oecoming  exhausted,  but  because  the  price  obtained  for  the  gold  when 
extracted  does  not  pay  the  cost  of  production.  The  Black  Hills  do  not 
comprise  a  large  area — about  100  miles  square — and  the  gold-produc- 
mg  section  is  only  a  small  part  of  this  area.  Four  years  ago  there  were 
iroin  10  to  12  producing  mines;  now  there  are  only  two  operating.  I 
opeak  from  knowledge  in  one  case;  and  I  think  I  speak  also  with  correct- 


THE  AMERICAN  MINING  CONGRESS  67 

ness  with  regard  to  the  other,  that  it  is  operating  simply  to  keep  its 
organization  intact,  hoping  that  in  the  near  future  conditions  may  change 
or  will  change  so  that  it  can  receive  some  profit  from  operations. 

Prospecting  is  at  a  standstill,  and  only  two  or  three  mines  in  the 
ueveiopment  stage  show  any  signs  of  activity.  The  population  of  the 
two  largest  mining  towns  of  the  Hills — Lead  and  Deadwood — has  de- 
creased from  12,045  in  1910  to  7,415  in  1920,  and  the  population  of  Law- 
rence County,  which  is  the  principal  mining  section  of  the  Hills,  has 
o.btjS)  less  people  in  1920  than  in  1910. 

[Mr.  Yates'  paper  will  be  found  on  page* 639  of  the  Proceedings.] 

MK.  SEAMAN:  Mr.  Chairman,  I  wonder  if  it  is  not  in  order  at  this 
time  to  present  the  resolution  that  has  been  prepared  for  the  considera- 
tion of  this  body,  so  that  it  may  or  may  not  be  presented  to  the  general 
Resolutions  Committee.  With  your  permission  I  will  read  the  resolution. 

CHAIRMAN  MATHEWSON:  Just  read  the  resolution.  There  is  no 
action  to  be  taken  by  the  meeting. 

Resolution  Endorsing  McFadden  Bill 

MR.  SEAMAN:  In  the  preparation  of  this  short  resolution,  we  aimed 
at  brevity,  for  the  reason  that  everybody  knows  what  the  McFadden  Bill 
is,  rather  than  an  extended  discussion  of  the  present  conditions: 

''WHEREAS,  the  gold-mining  industry  of  the  United  States  is  in 
deplorable  straits,  having  almost  ceased  to  function,  and  it  is  neces- 
sary to  apply  immediate  measures  for  relief;  and 

"WHEREAS,  the  McFadden  Bill  (H.  R.  13201),  offers  the  best  present 
solution  to  the  problem; 

"RESOLVED,  that  the  American  Mining  Congress,  in  congress  as- 
sembled, heartily  endorses  the  McFadden  Bill,  and  pledges  its  sup- 
port to  the  measure,  and  urges  a  like  support  on  the  part  of  all  our 
citizens  who  have  at  heart  the  maintenance  of  the  gold  standard  and 
the  common  welfare  of  the  country." 

CHAIRMAN  MATHEWSON:  It  is  not  often  that  the  mining  engineer 
becomes  prominent  in  politics.  He  is  usually  too  busy  looking  after  his 
employer's  interest  to  take  an  active  part  in  that  business.  Within  recent 
years,  mining  engineers  have  been  forced  to  take  part  in  politics,  because 
they  have  round  that  those  engaged  in  every  other  industry  have  taken 
an  active  part  in  polities',  and  why  should  the  engineer,  particularly  the 
mining  engineer,  take  a  back  seat?  So,  of  late  we  have  had  a  few  in- 
stances of  successful  mining  engineers  becoming  successful  politically. 
We  have  with  us  today  one  of  the  most  successful  mining  engineers  in 
this  country.  He  has  also  shown  that  mining  engineers  can  be  a  success 
in  political  matters,  and  I  am  going  to  call  on  Governor  Boyle  of  Nevada 
to  tell  us  something  about  the  gold  question,  which  he  has  studied  deeply, 
and  of  which  he  can  speak  feelingly.  (Applause.) 


68  REPORT  OF  PROCEEDINGS 

Views  of  an  Engineer  and  State  Governor 

GOVERNOR  BOYLE:  Ladies  and  gentlemen:  This  is  a  totally  un- 
expected pleasure  upon  my  part.  I  arrived  a  few  minutes  ago  on  the 
train,  and  was  rather  under  the  impression  that  I  might  be  given  the 
privilege  of  speaking  from  the  floor  and  that  perhaps  would  not  be  called 
to  the  pulpit.  At  a  matter  of  fact,  I  would  prefer,  if  it  met  with  the 
pleasure  of  this  audience,  to  be  permitted  to  speak  at  greater  length  on 
the  gold  question  later  on. 

I  have  had  the  good  or  bad  fortune  to  be  connected  with  many  of  the 
enterprises  which  had  for  their  purposes  the  relief  of  the  gold-miners' 
situation,  and  I  have  come  to  view  the  thing  from  a  good  many  different 
angles.  I  have  seen  it  likewise  from  the  standpoint  of  a  public  official, 
during  the  period  in  which  I  was  a  member  of  the  Gold  Production  Com- 
mittee of  the  United  States  Treasury,  formed  immediately  following  the 
armistice.  I  might  say  also  that  I  have  come  to  this  conclusion,  that 
the  possiblity  of  making  an  address  to  a  group  of  gold  miners  which 
will  meet  their  entire  approval  of  such  group  is  a  difficult  task.  I  find 
that  the  conversion  of  men  who  are  already  convinced  in  their  minds 
that  a  gold  subsidy,  gold  premium  or  bonus,  does  not  call  for  any  special 
form  of  ingenuity.  I  have  discovered,  however,  that  the  whole  question 
of  gold  is  so  intimately  related,  and  is  so  inter-related  with  the  question 
of  finance  and  the  question  of  credit,  as  to  call  at  this  time  for  a  period 
of  propaganda.  We  have,  happily,  passed  from  the  consideration  of  the 
problem  from  the  bankers'  standpoint.  We  have,  I  believe,  a  case  where 
the  economists  of  the  country  generally,  wedded  to  the  theory  of  the  so- 
called  quantity  theory  of  money,  may  easily  enough  influence  the  better 
sentiments  of  the  Nation  as  a  whole  to  the  point  where,  unless  the  gold 
miner  can  indicate  his  rights  in  absolutely  unanswerable  fashion  to  sell 
that  portion  of  his  product,  which  is  not  used  for  monetary  purposes,  on 
a  commercial  basis,  that  the  bankers  have  the  better  of  the  argument. 

Bankers  to  be  Converted 

This  is  not  a  pleasant  thing  to  say,  but  it  is  nevertheless  true.  We  are 
called  upon,  not  to  convert  ourselves  to  something  that  we  already  believe; 
but  rather  to  convert  bankers  to  the  proposition,  or  theory,  that  cer- 
tain alterations  in  the  former  habit  of  gold  in  the  markets  of  the  world 
may  be  made  without  affecting  credits;  and  in  consideration  of  the  propo- 
sition from  that  standpoint  we  must  look  at  it  through  the  banker's  eyes, 
and  from  the  standpoint  of  the  man  who  is  at  once  the  public  book- 
keeper and  a  man  who  is  at  the  same  time  the  custodian  of  the  credit  of 
the  Nation.  We  cannot  charge  him  with  bad  faith  to  the  gold  industry 
when  we  consider  his  responsibility.  He  has  found  innumerable  in- 
stances where  things  that  appeared  upon  their  face  to  be  innocent  in  the 
extreme,  have  had  serious  effects  upon  the  national  credit,  on  interna- 
tional relations,  and  on  domestic  customs.  I  would  say  that  were  this 
gathering  to  devote  itself  henceforth  to  the  assimilation  of  the  sort  of 
facts  that  would  help  to  disprove  the  theory  that  the  alterations  of  the 
functions  of  gold  would  have  no  effect  upon  credit,  we  might  present  a 


THE  AMERICAN  MINING  CONGRESS  69 

better  and  more  united  front  to  the  opposition,  which  will  inevitably  be 
found  in  any  enterprise  that  touches  upon  the  delicate  question  of  credits. 
With  that  in  mind,  and  with  your  permission,  I  would  like,  for  the  present, 
to  hear  what  may  be  said,  and  if  in  the  course  of  the  discussions  it  ap- 
pears possible  for  me  to  introduce  anything  of  a  nature  that  might  be 
used  as  a  suitable  and  legitimate  argument  in  the  presentation  of  our 
problems  to  the  custodian  of  the  Nation's  credit,  I  would  like  the  privi- 
lege of  appearing  before  you  a  second  time.  I  thank  you  very  much. 

CHAIRMAN  LAWRIE:  There  is  in  the  audience  one  of  those  un- 
repentant sinners,  we  want  to  give  him  a  chance  to  be  heard;  perhaps 
we  can  convert  him,  and  I  am  going  to  call  upon  Mr.  T.  A.  Rickard,  of 
San  Francisco,  a  cosmopolitan  gentleman,  a  mining  engineer,  now  retired 
from  the  profession,  but  permanent  in  the  literature  of  the  profession,  to 
give  us  a  few  words  from  his  point  of  view,  and  see  if  we  cannot  bring 
him  to  the  means  of  grace. 

Views  of  a  Journalist  and  Engineer 

MR.  RICKARD:  Mr.  Chairman  and  gentlemen:  I  am  not  a  sinner; 
I  am  only  an  ignorant  man;  and  I  am  not  a  cosmopolitan;  I  am  an 
American.  I  approach  this  point  of  the  subject  from  the  viewpoint  that 
concerns  all  of  us.  Naturally  I  was  much  interested  in  listening  to 
Governor  Boyle.  I  was  reminded  of  an  occasion  at  the  beginning  of  this 
year  when  at  a  similar  Convention  at  Seattle  we  discussed  this  ques- 
tion of  aiding  the  gold-mining  industry  by  some  form  of  legislation. 
Governor  Boyle  was  the  hero  of  the  occasion;  he  was  the  big  man  of  that 
convention — I  say  that  sincerely — he  carried  the  Convention  with  him  as 
he  can  carry  most  conventions  when  he  wants  to.  Just  now  he  did  not 
seem  to  be  particularly  anxious;  he  seemed  to  have  taken  a  little  of  a 
more  intellectual  attitude  on  the  subject,  and  I  sympathize  with  him;  and 
that  is  exactly  my  position.  1  am  here  as  one  of  us;  we  are  all  actually 
interested  in  gold  mining;  we  want  to  see  it  assisted;  and  I  venture  to 
say  to  you  as  a  technical  man,  a  scientific  man,  it  is  a  good  thing  if  we 
can  ventilate  some  of  the  apparent  difficulties  that  are  arising  from  the 
etudy  of  this  subject.  If  I  make  any  suggestions  this  afternoon,  it  is  in 
the  hope  that  such  a  man  as  Governor  Boyle  will  be  exactly  the  one  who 
will  clarify  my  doubts  in  the  course  of  this  Convention.  I  have  no  desire 
to  speak  again,  and  I  am  delighted  to  think  that  he  will,  and  that  we  will 
then  be  able  to  hear  some  of  the  troubles  that  come  before  us.  At  Seat- 
tle, we  were  practically  unanimous  in  our  sympathies  with  the  Governor 
and  his  friend,  Mr.  Fletcher  Hamilton  of  California;  I  felt  in  harmony 
with  them.  At  the  end  of  that  Convention  we  were  addressed  by  Mr. 
Frank  Vanderlip,  who  made  a  good  appearance.  He  spoke  well  and 
courteously,  although  99%  of  the  audience  were  hostile  to  his  view;  but 
as  I  listened  to  him,  as  able  a  financier  as  he  is,  and  an  authority  on  the 
subject,  I  felt  that  he  did  not  know  much  about  it.  I  honestly  believe 
it  is  a  subject  of  such  complexity,  owing  to  its  international  aspects,  that 
not  many  of  us  know  much  about  it,  and  I  am  among  those  who  know 
less  about  it;  and  I  am  here  to  learn,  and  that  is  why  I  am  going  to  pro- 


70  REPORT  OF  PROCEEDINGS 

pound  one  or  two  questions.  Mr.  Vanderlip,  as  you  will  recall,  made  the 
statement  that  if  we  were  to  increase  our  gold  production,  it  would  have 
a  bad  effect;  in  fact,  it  would  delay  the  deflation  so  necessary,  because  by 
the  Federal  Reserve  Act  the  increase  of,  say  $50,000,000,  in  the  produc- 
tion of  gold,  would  authorize  just  that  proportionate  amount  more  paper. 

Gold  Production  and  Paper  Money 

Of  course,  that  argument  seems  to  me  trivial.  Supposing  we  increased 
our  gold  production  $50,000,000,  the  amount  of  paper  legally  issuable 
would  only  be  $125,000,000,  and  that  is  only  a  small  sum  of  money  for 
the  United  States.  In  all  these  matters  we  need  some  perspective. 
This  morning  I  felt  some  sympathy  for  the  gentleman  from  Central 
City,  a  place  where  I  used  to  live,  and  whose  plight  at  this  moment  I 
regret.  I  had  keen  sympathy  with  my  friend  Mr.  Collins  when  he  dwelt 
upon  the  gold-mining  industry  of  Colorado,  a  State  with  which  I  used 
to  be  officially  connected;  and  when  this  gentleman  from  Central  City 
asked  that  question  I  felt  like  smiling,  but  I  still  felt  he  was  doing  right 
in  asking  this  question.  What  he  asked  indicated  what  he  thought,  and 
I  have  no  doubt  a  great  many  others  think  likewise.  He  thought  that 
Great  Britain  is  paying  a  premium  on  gold.  I  have  no  doubt  that  many 
of  you  some  time  or  other  have  thought,  "Well,  if  Great  Britain  is  paying 
a  premium  on  gold,  Uncle  Sam  can  do  it,  and  we  ought  to  be  protected 
and  cared  for  and  assisted;  this  is  a  great  industry,  and  if  one  country 
does  it,  we  are  rich  and  we  can  do  it."  Of  course,  that  is  absolutely 
nonsense.  Great  Britain  is  not  paying  any  premium.  All  that  Great 
Britain  did  after  the  close  of  the  war  was  to  remove  the  embargo  on  the 
free-trading  gold  on  the  export  and  import  gold.  As  soon  as  that  embargo 
was  raised,  the  artificial  prop  was  removed  from  the  pound  sterling,  and 
it  went  to  the  discount  where  it  properly  belonged,  in  consequence  of 
the  shifting  of  financial  credit.  When  a  man  in  South  Africa  sells  his 
gold,  he  is  only  getting  a  premium  in  a  sense  that  he  sells  it  for  a  depre- 
ciated currency  in  terms  of  gold,  and  he  gets  his  128  shillings.  As  long 
as  he  buys  his  machinery  and  supplies  and  pays  for  it  in  shillings,  of 
course  he  has  the  advantage  of  that;  but  as  soon  as  he  begins  to  trade 
outside  he  finds  that  it  will  take  the  whole  of  the  128  shillings  to  buy  an 
ounce  of  gold,  or  the  equivalent  in  American  exchange.  If  you  were 

How  the  Premium  Works  in  Other  Countries 

mining  in  Italy — there  are  gold  mines  in  Italy,  or  there  used  to  be  in 
northern  Italy — you  would  get  an  enormous  premium  for  your  gold  be- 
cause the  lira  is  only  worth  four  cents;  consequently  your  gold  would  be 
worth  more  than  it  is  in  London  and  about  five  times  what  it  is  worth 
in  New  York.  So  long  as  your  business  activities  were  confined  to  Italy 
you  would  receive  the  benefit  of  it,  and  it  would  be  a  benefit  because  the 
cost  of  other  things,  including  your  labor,  in  Italy,  has  gone  up  as  much 
relatively  as  the  cost  of  gold.  If  you  were  mining  in  Germany,  you 
would  have  an  enormous  premium.  This  premium  is  simply  a  differ- 
ence in  exchange,  and  when  people  talk  about  the  British  gold  snprem- 


THE  AMERICAN  MINING  CONGRESS  71 

acy,  why,  it  is  rather  pathetic.  Of  course,  in  Great  Britain,  and  coun- 
tries under  the  British  flag,  they  are  producing  a  great  part  of  the  gold 
of  the  world,  but  the  power  of  their  supremacy  is  measured  by  the  fact 
that  the  pound  sterling  is  worth  only  $3.50  of  United  States  money. 
Supremacy!  Why,  the  United  States  dollar  today  is  supreme  as  it  never 
was  in  history.  That  argument  is  ridiculous;  and,  moreover,  you  have 
to  remember  that  whether  the  gold  is  produced  under  the  British  flag  or 
any  other  flag,  the  fact  of  gold  being  produced  in  a  country  does  not 
mean  that  it  remains  in  the  country  of  its  origin.  The  gold  produced  at 
Johannesburg,  and  the  great  mining  regions  of  South  Africa,  is  coming 
here.  If  we  produce  $50,000,000  worth  more  of  gold  tomorrow,  where  it 
would  go  depends  upon  the  tide  of  commerce.  I  hope  Governor  Boyle 
will  correct  some  of  the  deficiency  of  my  knowledge  to  present  this 
aspect  of  the  case.  It  is  one  of  the  problems  that  confronts  us,  and  I 
hope  he  will  make  it  clearer. 

For  the  rest,  gentlemen,  I  will  only  suggest  this,  that  during  the  war 
we  learned  to  think  nationally.  We  have  also  begun,  in  a  measure,  to 
think  internationally.  Sometimes  we  would  like  to  cease  thinking  inter- 
nationally, and  we  would  like  to  forget  some  of  the  other  fellow's  trou- 
bles, feeling  that  we  have  enough  to  engage  in;  but  I  would  submit  to 
you,  and  to  those  who  are  better  versed  in  these  matters — to  my  friend, 
Mr.  Lawrie.  whose  scholarly  statements  this  morning  I  listened  to  with 
deep  respect — that  that  is  a  question,  which  is,  essentially,  an  inter- 
national question,  and  that  is  what  makes  it  so  very  popular.  I  believe 
I  refused  to  be  called  a  sinner;  I  even  would  not  accept  the  idea  that  I 
need  conversion.  I  may  be  a  doubting  Thomas. 

MR.  SEAMAN:  Mr.  Rickard,  I  would  like  to  ask — you  seem  to  have 
a  special  knowledge  of  the  South  African  situation — isn't  it  a  fact  that 
Great  Britain  did  encourage  her  gold  miners  by  forcing  the  sales  of 
materials  they  used?  For  instance,  manufacturers  were  forced  to  sell 
cyanide  at  12  cents,  while  we  were  paying  30  to  35  cents. 

MR.  RICKARD:  At  the  beginning  of  the  war  Great  Britain  took 
steps  to  prevent  the  collapse  of  gold  mining  in  South  Africa,  and  did  see 
to  it  that  shipments  of  cyanide  were  made  available  for  the  mines. 

MR.  SEAMAN:  Didn't  they  also  take  care  of  their  miners,  who  other- 
wise would  have  gone  to  war;  and  didn't  they  keep  them  at  home,  where- 
as we  didn't  take  that  precaution? 

MR.  RICKARD:     I  really  don't  know;  I  wasn't  here. 

CHAIRMAN  MATHEWSON:  Yu  have  heard  from  a  sinner,  and  you 
have  heard  something  about  the  doubting  Thomas;  there  may  be  a  few 
more  doubting  Thomases  in  the  place,  and  we  would  like  to  hear  from 
them.  We  haven't  any  more  speakers  on  the  regular  program;  but  we 
want  to  have  a  good  discussion  on  this  question. 

MR.  TAYLOR:  Mr.  Chairman,  I  am  not  a  doubting  Thomas;  I  don't 
want  to  be  put  in  that  class,  but  I  might  ask  a  question:  The  principal 


72  REPORT  OF  PROCEEDINGS 

opposition  to  the  McFadden  Bill  seems  to  come  from  the  banker.  1 
don't  know  enough  about  credit,  but  I  think  that  we  all  know  this:  that 
during  the  war  every  bank — every  national  bank — has  doubled  its  divi- 

Profits  in  Banking 

dends.  I  know  of  two  banks  that  I  have  a  lot  to  do  with  have  doubled 
theirs,  and  have  added  considerably  to  their  surplus.  The  Federal  Re- 
serve Bank,  last  year,  I  think,  made  $100,000,000.  and  I  have  heard  several 
good  business  men  say  recently  that  it  was  only  a  question .  of  a  few 
years  until  the  Federal  Reserve  owned  all  the  money  in  the  United 
States;  that  they  were  making  it  all.  Now,  as  long  as  a  banker  has  got  a 
pretty  good  thing,  and  the  gold  miner  has  lost  pretty  much  his  all — the 
banks  are  using  what  gold  he  still  produces,  keep  it  in  the  Federal  Re- 
serve, refuse  to  let  us  have  it  in  circulation,  and  issue  paper  dollars — as 
long  as  they  are  making  100%  more  than  they  ever  did,  isn't  it  possible 
that  they  may,  not  intentionally,  but  unintentionally,  influence  the  banker 
to  advise  us  to  let  the  gold  standard  alone?  (Applause.) 

CHAIRMAN  MATHEWSON:  Is  there  any  banker  here  present  who 
could  offer  us  a  little  suggestion  on  this  point? 

Bankers  not  Unanimous 

In  regard  to  this  matter,  I  inqured  of  some  bankers  in  New  York  City 
and  St.  Louis,  and  I  do  not  find  a  unanimity  of  opinion  on  this  subject. 
One  said  we  had  too  much  gold;  another  said  we  did  not  have  gold 
enough.  Now,  if  they  are  not  agreed,  although  they  are  making  so  much 
money  on  it,  there  is  room  for  the  miner  to  doubt  whether  they  are  right 
in  their  contention;  but  I  do  not  think  all  banks,  by  any  means,  all  of 
the  bankers,  are  in  favor  or,  rather,  against  the  McFadden  Bill.  This 
Bill,  as  I  recollect  it,  has  been  twice  recommended  by  the  American  Bank- 
ers' Association  for  endorsement,  and  once  turned  down.  I  have  been 
given  to  understand  that  there  is  some  little  personal  feeling  in  the  mat- 
ter; that  it  is  not  all  a  question  of  right,  but  there  is  a  litle  personal 
animosity  between  some  of  the  gentlemen  on  the  bankers'  committee  and 
the  gentlemen  who  are  backing  the  Bill,  so  that  we  do  not  get  at  the 
truth  of  the  matter  from  the  Bankers'  Association.  We  want  to  get 
enlightenment,  however,  and  I  am  going  to  ask  Governor  Boyle  a  little 
later  to  enlighten  us  on  this  topic. 

Are  there  any  more  of  those  present  who  want  to  ask  questions,  or  to 
offer  any  suggestions  on  the  question? 

The  Secretary  Concisely  Explains  the  Bankers'  Position 

MR.  CALLBREATH:  Mr.  Chairman  and  gentlemen:  It  seems  that 
there  is  a  good  deal  of  misapprehension  about  the  attitude  of  the  bank- 
ers of  America  upon  this  character  of  legislation.  As  your  Chairman  has 
just  said,  two  separate  national  meetings  of  the  American  Bankers'  As- 
sociation have  passed  a  resolution  unquestionably  favoring  the  aid  of  the 
Federal  Government  in  the  stimulation  of  the  gold-mining  industry. 
Both  of  these  annual  meetings  of  the  Association  recognized  the  fact 


THE  AMERICAN  MINING  CONGRESS  73 

that  gold  was  the  basis  of  our  credit,  and  that  we  could  not  have  too  much 
gold.  They  recognized,  as  we  recognize,  that  this  country,  having  one- 
third  of  the  world's  gold  supply,  maintains  its  currency  at  par.  England, 
having  the  next  amount  of  the  great  nations,  comes  nearer  maintaining 
its  currency  at  par  than  the  other  countries;  and  just  in  proportion  to  the 
amount  of  gold  which  the  foreign  countries  own,  just  in  that  proportion 
is  their  credit  and  currency  depreciated  in  value.  Therefore,  they  recog- 
nize that  there  should  be  some  proper  aid  given  by  the  Federal  Govern- 
ment for  the  stimulation  of  gold  production.  After  those  two  annual 
meetings  had  passed  that  resolution,  then  consideration  was  focused  upon 
the  McFadden  Bill  in  its  present  form,  at  that  time  the  theory  of  aid  not 
having  been  developed.  The  matter  was  then  referred  to  the  legislative 
committee  of  the  American  Bankers'  Association,  and  it  reported  in  favor 
of  the  Bill  in  its  present  form.  One  of  the  departments  of  the  Associa- 
tion voted  unanimously  for  it.  It  is  not  to  be  wondered  at  that  there  are 
many  doubting  Thomases  among  the  bankers.  The  banker  is  a  con- 
servative; he  does  not  loan  his  money  to  you  unless  he  is  absolutely 
sure  that  he  can  get  it  back  again,  and  he  does  not  take  very  many 
chances.  His  business  is  to  be  conservative;  and  when  there  is  a  ques- 
tion in  his  mind,  even  a  remote  possibility,  that  there  might  be  some- 
thing in  this  thing  that  was  revolutionary,  rather  than  undertaking  to 
study  out  the  question — and  it  is  not  an  easy  question  to  understand — 
he  says,  "Well,  we  will  just  let  well  enough  alone;"  and  upon  that  basis 
there  has  been  some  opposition.  Even  with  that  conservative  feeling 
upon  the  part  of  the  bankers,  their  Association,  through  its  legislative 
committee,  approved  the  enactment  of  the  Bill.  Thereafter  there  was 
a  flutter:  A  few  people  upon  the  inside  objected  to  this  procedure;  men, 
whom  I  fear,  had  not  given  the  study  to  the  subject  that  they  ought  to 
have  given  it  before  acting;  or,  perhaps  as  your  chairman  has  intimated, 
were  controlled  by  a  personal  resentment  of  some  sort,  and  I  would 
rather  not  bring  out  that  point,  although  I  am  thoroughly  familiar  with 
the  facts— a  committee  was  appointed  which  undertook  to  bring  in  a 
reverse  report.  That  was  brought  before  the  last  session  of  the  Associa- 
tion, and  it  was  known  that  the  question  was  to  be  considered  by  them. 

Truth  of  the  Bankers'  Reports 

We  want  to  know  how  the  bankers  of  the  Nation  were  acquainted  with  the 
fact  that  the  McFadden  Bill  was  to  be  considered  at  that  meeting.  This 
adverse  report  of  this  special  committee  was  brought  before  the  Associa- 
tion a  week  ago  pearly  in  November,  1920]  in  Washington,  and  pre- 
sented to  the  Convention;  but  it  was  not  approved;  on  the  contrary,  the 
answer  and  reply  to  that  report  given  by  Congressman  McFadden  v/aa 
referred  to  that  report  to  another  committee  upon  policy,  and  therefore, 
instead  of  the  bankers  going  upon  record  as  opposed  to  this  bill,  they 
went  on  record  as  refusing  to  approve  an  adverse  report.  So  it  seems  to 
me  we  have  every  reason  to  believe  that  the  bankers  of  the  Nation  ara 
thoroughly  imbued  with  the  idea  that  the  gold  reserve  of  this  Nation  mus 
be  maintained,  that  our  supremacy  in  the  world's  finance  »^<j  mdusts- 


74  REPORT  OF  PROCEEDINGS 

are  based  upon  that  gold  reserve,  and  therefore  every  effort  should  be 
made  to  sustain  that  gold  reserve.  I  believe  that  in  the  end,  the  Ameri- 
can Bankers'  Association  and  all  of  its  members,  with  the  exception  of  a 
few  people  who  cannot  be  convinced  of  everything,  will  be  our  best  aid 
in  securing  the  enactment  of  the  McPadden  Bill  at  the  coming  session  of 
Congress.  I  thank  you. 

MR.  COLLINS:  I  would  like  to  ask  a  question  arising  from  Mr.  Rick- 
ard's  remarks.  He  truly  said  that  the  American  dollar  was  now  domi- 
nant in  the  finance  of  the  world:  I  believe  that  is  true;  is  it,  however, 
true  that  our  paper  dollar  is  everywhere  at  par? 

GOVERNOR  BOYLE:     Yes,  and  above  par. 
MR.  COLLINS:     Everywhere? 
GOVERNOR  BOYLE:     Yes. 

MR.  COLLINS:  I  was  informed  that  about  six  months  after  the  armis- 
tice— on  authority  that  I  believe  to  be  absolute,  and  which  I  will  be  glad 
to  give  in  confidence  to  Governor  Boyle — that  the  American  dollar  was 
at  a  discount,  fluctuating  between  20  and  25%  in  China,  which  was  the 
reason  for  the  shipment  of  considerable  amounts  of  gold  to  China  at  that 
time.  Supposing  that  the  American  dollar  is  everywhere  always  at  par, 
why  do  we  have  to  export  such  large  quantities  of  gold  all  the  time? 

Gold  Preferred  to  Paper  Dollars 

It  is  obvious  the  reason  is,  that  gold  is  preferred  to  our  paper  dollars  in 
the  countries  where  we  are  shipping  gold,  particularly  to  South  America 
and  the  Orient.  I  believe  it  is  entirely  true  that  the  American  paper 
dollar  stands  far  ahead  of  the  paper  of  any  other  nation ;  that  is  naturally 
to  be  expected.  The  next  nation  in  credit  is  Great  Britain,  and  I  believe 
it  to  be  true,  as  I  stated  this  morning,  that  the  reason  for  that  was  that 
Great  Britain  was  able,  by  the  use  of  the  constant  flow  of  gold  from  her 
possessions,  to  maintain  her  credit.  Whenever  the  British  credit  dropped — 
that  is  perhaps  not  so  now,  but  up  to  a  year  ago  when  British  exchange 
dropped — large  shipments  of  gold  were  made  over  here,  which  helped. 
All  other  nations  are  much  behind  for  the  same  reason,  because  they  have 
not  the  gold  in  case  of  need  to  aid  their  exchange;  but  taking  the  world 
as  as  whole,  it  has  issued  quantities  of  paper  money  which  is  out  of  all 
reasonable  proportion  to  the  gold  backing  that  they  have.  Generally 
speaking,  the  exchange  of  those  nations  in  the  international  market  is 
proportionate  to  the  percentage  of  gold  backing  that  each  nation  pos- 
sesses. I  have  referred  to  British  exchange:  The  entire  difference  between 
British,  and  say  German  exchange,  does  not  depend  on  the  amount  of  gold 
that  is  available  to  send  in  case  of  need;  part  of  it  is  due  to  greater  con- 
fidence in  British  stability  as  compared  with  Germany.  The  difference 
between  English  and  French  exchange  today,  the  main  part  of  it.  cannot 
be  attributed  to  anything  else  except  the  fact  that  when  the  British  need 
to  pay  their  balances  here  [in  America!  they  can  do  more  than  can  the 
French. 


THE  AMERICAN  MINING  CONGRESS  75 

A  VOICE:     As  a  farmer,  I  am  glad  I  am  here. 
CHAIRMAN  MATHEWSON:     Name,  please? 

A  VOICE:  I  am  a  stranger  here,  but  some  of  my  friends  have  been 
careful  to  send  me  a  lot  of  financial  literature  which  I  have  looked  over, 
and  would  like  to  ask  a  question.  It  seems  to  me  that  all  the  gold  that 
has  ever  been  in  the  United  States  has  been  three  billion  dollars,  and  all 
our  paper  money,  our  bonds,  and  our  credit  is  based  on  that  gold;  but  I 
have  not  found  out  how  much  we  have  shipped  of  that  three  billions.  It 
must  be  a  lot,  because  we  cannot  do  business  in  a  great  nation  like  this 
on  three  billions.  If  we  have  gold  to  that  amount,  and  issue  about 
seventy-five  billion  dollars,  what  is  the  value  of  the  gold  dollar? 

MR.  LAWRIE:  Mr.  Chairman,  I  might  be  able  to  answer  that  more 
directly  by  citing  the  gold  cover  that  is  given  by  the  Federal  Reserve 
Bank,  which  is  46.6  cents  of  gold  to  every  Federal  Reserve  note  in  circu- 
lation. The  Federal  Reserve  Act  holds  that  a  40%  gold  cover  was  proper, 
so  that  leaves  a  surplus  of  6.6%  of  gold  at  the  present  time  back  of  the 
Federal  Reserve  note  for  every  dollar. 

GOVERNOR  BOYLE:  There  are  two  or  three  matters  that  apparently 
may  be  well  to  consider  by  this  Conference  in  relation  to  the  functions 
of  the  gold  reserve.  The  gold  reserve  of  this  country*  is  established  by 
law.  The  Federal  Reserve  Act  requires  that  it  must  be  maintained  at 
40%.  The  whole  question  of  the  gold  reserve  is  a  psychological  one. 

Gold  Reserve  Against  Notes  in  England 

The  Bank  of  England,  without  any  restrictions  whatever,  and  the  other 
two  banks  of  issue  in  England,  have,  by  agreement,  maintained  a  gold 
reserve  that  has  fluctuated  between  54% — they  have  permitted  the  gold 
reserve  to  go  as  low  as  30%.  The  gold  reserve,  in  effect,  is  this:  It 
means  that  a  sufficient  amount  of  gold  must  be  held  in  some  reservoir 
to  permit  of  the  redemption  in  specie  of  any  outstanding  demand — paper 
of  banks  of  issue,  or  of  the  Government.  Under  those  circumstances,  the 
experience  of  any  community  determines  what  the  gold  reserve  ought  to 
be.  If  it  is  found  that  people  who  have  demand-paper,  demand  gold  in 
place  of  paper,  then  a  70%  gold  reserve  is  necessary;  that  is,  if  all  the 
people  who  have  demand-paper,  demand  gold.  Then  a  70%  gold  reserve 
is  necessary  in  order  to  maintain  the  parity  of  the  paper  in  circulation. 
On  the  other  hand,  as  institutions  have  become  old  and  well  known,  and 
have  had  certain  governmental  backing,  such  as  that  supplied  to  the 
Bank  of  England  since  1694—1  believe  it  was  first  chartered— a  lessei 
amount  of  gold  serves  to  satisfy  the  requirements  of  a  satisfactory  golf 
reserve  back  of  notes  of  issue. 

Gold  Essential  During  War 

One  of  the  points  I  hope  to  bring  out  is  the  idea  that  the  gold  reserve 
essentially  needed  in  time  of  war,  essentially  needed  in  times  of  pe^n » 
when  the  credit  of  the  nation  is  affected  by  adverse  trade  balances,  is>  a 


76  REPORT  OF  PROCEEDINGS 

matter  that  depends  almost  entirely  on  national  and  international  trade. 
It  may  be  interesting  to  know  that  many  of  the  South  American  coun- 
tries have  no  gold  standard,  issue  no  gold-secured  paper,  and  do  not  have 
to  issue  it,  because  they  don't  require  it;  but  those  countries  whose  ad- 
verse trade  balances  must  maintain  their  exchange  paper  on  the  parity 
of  the  knowledge  possessed  by  everyone  with  whom  they  deal,  then  they 
must  have  gold  in  the  amount  of  the  face  of  the  paper;  so  the  whole 
question  of  the  gold  reserve  is  a  psychological  one.  I  think,  if  I  recall 
correctly,  that  in  Austria,  all  banking  agencies,  and  notes  of  issue  agen- 
cies, are  able  to  maintain  their  exchange  paper  on  a  parity  of  16%  gold 
production  reserve,  or  gold  reserve.  In  France,  the  gold  reserve  was 
maintained  at  about  40%,  or  a  little  over  30%.  It  may  be  an  interesting 
fact  to  know  that  the  gold  back  of  the  United  States  Federal  Reserve 
notes,  at  the  time  of  the  outbreak  of  the  war,  was  98^%  of  the  total 
issue;  and  the  question  of  how  much  gold  must  stand  back  of  those  notes 
is  a  matter  that  is  related  directly  to  the  amount  of  confidence  which  the 
public,  domestic  and  international,  has  come  to  repose  in  the  credit  of 
the  issuing  country,  or  the  issuing  institution. 

Three  Distinct  Views  Held  by  Bankers 

As  a  fact,  the  argument  against  the  expansion  of  our  gold  industries  in 
the  United  States' and  in  the  world  is  not  ill-founded.  I  tell  you  this  with 
no  expectations  of  applause.  It  is  one  of  those  points  that  must  be  em- 
ployed in  our  consideration  of  this  proposition,  if  we  are  going  with  it 
properly  before  the  bankers.  I  have  found  that  there  are  three  separate 
and  distinct  classes  among  banks.  Those  who  believe  firmly  in  the  propo- 
sition of  continually  adding  to  the  gold  reserve;  those  who  do  not  believe 
in  adding  to  the  gold  reserve  and  who  confine  their  convictions  in  the 
utterances  of  the  economists;  and  those  who  say  that  the  final  settling 
upon  the  increased  gold  supply  of  the  world  is  the  one  cause  for  the 
increased  prices  which  prevailed  from  1890  until  1915,  during  which 
period  a  careful  analysis  indicated  that  commodity  prices  generally  had 
risen  48%.  The  third  group — a  small  one — after  eliminating  all  of  the 
causes  that  might  have  contributed  to  high  prices,  determined  that  the 
quantity  of  money  in  circulation,  bearing  no  longer  on  the  amount  of 
business  transacted,  had  something  to  do,  if  it  was  not  entirely  the  con- 
trolling factor,  with  the  purchasing  price  of  that  money.  Going  further 
in  their  analysis  they  found  that  the  world  produced  during  the  last '430 
years,  or  thereabouts,  approximately  $16,500,000,000  of  gold,  and  in  the 
last  30  years  of  that  period  about  $8,000,000,000  of  gold.  In  other  words, 
during  the  last  30  years  we  have  produced  half  of  the  gold  extracted  in 
the  last  4Vi  centuries.  These  bankers  are  not  going  to  be  waived  aside 
by  any  processes  of  passion  and  class  argument.  The  firm  conviction  of 
the  second  group  of  bankers — who  depend  upon  the  utterances  of  econo- 
mists, who  dwell  upon  the  so-called  quantity  theory  of  money — is  that 
their  views  have  to  be  met  by  the  type  of  argument  which  takes  into 
account  the  historical  effects  of  alterations  of  standards  and  domestic 
credits.  Those  men  may  be  reached  by  argument. 


THE  AMERICAN  MINING  CONGRESS  77 

Purchase  Power  of  the  Dollar 

We  had  the  pleasure  in  Seattle  of  listening  to  Mr.  Vanderlip.  He 
stated  that  as  a  result  of  what  he  termed  the  unwarranted  expansion  of 
the  currency  by  the  acts  of  the  Federal  Reserve  Board  over  the  period 
of  the  war,  the  dollar  had  been  reduced  in  purchasing  power  to  the 
point  where  it  was  only  40  cents.  Mr.  Vanderlip  failed  to  state  that 
bankers  loaned  that  money — that  40  cents — on  excellent  security,  while 
the  war  prevailed;  and  that  those  bankers,  in  the  expectation  of  a  return 
to  normalcy,  were  more  anxious  to  see  inflation  carried  on  by  whatever 
means  might  be  devised  in  order  that  the  40-cent  dollar,  which  they  were 
to  receive  in  payment  for  their  40-cent  loans,  would  have  a  normal  100- 
cent  value.  There  are  bankers  of  that  type  who  are  going  to  oppose  any- 
thing that  impedes  in  the  slightest  degree  the  rapid  depletion  of  the  cur- 
rency, or  the  rapid  decrease  in  the  volume  of  the  currency,  known  as 
deflation;  but  I  would  say  that  we  need  not  consider  them. 

The  middle  class  of  banker — who  is  from  Missouri — can  be  approached 
by  certain  forms  of  argument,  which,  it  seems  to  me,  might  be  considered 
by  the  mining  industry  as  a  whole.  There  are  no  more  complex  problems 
in  the  world,  perhaps,  than  the  problem  involved  in  modern  mining  and 
metallurgy;  and  it  is  reasonable  to  assume  that  the  equally  complex 
problems  of  domestic  and  international  finance  are  capable  of  being 
grasped  by  the  mining  engineer. 

My  plea  here  is  not  one  against  the  McFadden  Bill — I  have  been  in 
favor  of  it  since  the  start — but  rather  that  we  begin  to  approach  the  use 
of  propaganda  on  its  legitimate  and  fair-thinking  opponent,  in  such  a 
manner  as  will  reflect  real  credit  on  the  intelligence  of  the  mining  indus- 
try. With  that  in  mind,  I  wish  you  would  hold  yourself  in  the  frame  of 
mind  that  permits  you  to  see  his  side  of  the  problem.  He  has  his  own 
theory.  He  has  been  required,  as  commerce  had  advanced  and  as  the  busi- 
ness of  the  world  has  become  more  complex,  to  find  ways  and  means  for 
expanding  currency  much  more  rapidly  than  he  could  have  had  he  main- 
tained a  standard  gold  cover.  I  do  not  believe  that  our  case  should  be 
presented  in  any  other  terms  than  in  those  terms  which  go  to  the  very 
bottom  of  the  major  function  of  gold,  that  being  the  maintenance  and 
support  of  domestic  and  foreign  and  international  credit.  I  believe  that 
you  have  an  opportunity — and  a  golden  one  here — to  step  in  and  present 
a  real  economic  argument  and  convert  your  legitimate  opponents  among 
the  bankers.  (Applause.) 

World's  Gold  and  Debts 

MR.  SEAMAN:  Mr.  Chairman,  I  just  want  to  call  attention  briefly  to 
what  seems  to  be  more  of  a  neglected  side  of  this  question:  It  has  been 
suggested  that  the  gold  problem  should  be  considered  from  the  interna- 
tional standpoint,  which  I  believe  is  really  the  controlling  one  in  this 
matter.  What  is  the  total  stock  of  gold  in  the  world  available  for  the 
payments  of  debts?  What  is  the  amount  of  indebtedness  in  the  world 
that  is  predicated  upon  that  gold  stock?  From  that  standpoint  I  believe 
that  we  should  ask  the  United  States,  its  Senate,  its  people,  to  consider 


78  REPORT  OF  PROCEEDINGS 

the  gold  problem  as  one  of  a  square  deal.  We  have  loaned  to  the  nations 
of  Europe  nearly  $10,000,000,000,  every  dollar  of  which  is  re-payable  to 
us  in  gold  coin  of  the  present  standard  of  weight  and  fineness.  Our 
Government  sublimely  sits  by  and  sees  a  waste  of  hundreds  of  millions 
of  dollars  in  the  lack  of  operations  of  the  gold  mines,  which  is  a  national 
calamity.  Our  Government  should  help  the  gold  miner,  and  we  should 
take  the  necessary  measures  to  urge  it  to  do  so. 

MR.  VOORHEIS:  I  would  like  to  ask  Mr.  Lawrie  a  question:  I  be- 
lieve that  all  of  the  gold  produced  now  in  the  United  States  is  used  in 
the  arts.  Is  that  correct? 

MR.  LAWRIE:     More  than  that. 

MR  VOORHEIS:  More  than  that?  The  people  who  use  this  gold  in 
the  arts  buy  it  from  the  Government,  do  they  not? 

MR.  LAWRIE:     Yes. 

MR.  VOORHEIS:         How  do  they  pay  for  it? 

MR.  LAWRIE:     They  pay  for  it  in  gold  certificates. 

Gold  Used  in  the  Arts 

MR.  VOORHEIS:  Would  it  not  be  possible  for  the  Director  of  the 
Mint,  or  could  we  not  have  some  law  passed  prohibiting  the  sale  of  gold 
for  the  arts?  (Applause.)  If  such  a.  law  could  be  passed,  and  the  gold 
that  is  in  the  country  be  put  into  bullion  bars  and  stored  to  redeem 
the  currency,  then  those  who  use  the  gold  for  arts  would  have  to  buy 
it  from  the  producer  and  pay  the  price  that  was  asked.  Would  that  be 
logical?  Could  that  be  done" 

MR.  LAWRIE:  The  situation  is  this-  The  Secretary  of  the  Treasury 
has  full  power  at  any  time  to  regulate  the  sale  of  gold  bars,  but  it  has 
been  found  that  the  best  means  to  protect  the  gold  coin  in  circulation  is 
that  sales  should  be  made  as  far  as  possible  to  the  industrial  consumers. 

MR.  VOORHEIS:     And  they  pay  $20.67  an  ounce  for  refined  gold? 

MR.  LAWRIE:  Yes.  Of  course  other  gold  will  come  into  the  market, 
and  the  benefit  to  the  producer  would  be  much  lessened  by  virtue  of  the 
larger  volume  of  gold  to  satisfy  industrial  requirements;  therefore,  the 
disadvantage  of  giving  the  profit  to  those  people  who  have  been  hoarding 
gold — that  problem  is  met  with — and  they  are  not  entitled  to  that  con- 
sideration. In  England  there  is  a  law  to  prohibit  the  destruction  of  gold 
coin;  here  we  have  none.  Mr.  McFadden  has  introduced  a  bill  in  Con- 
gress for  that  purpose.  As  you  will  recall,  a  great  deal  of  destruction  was 
carried  on  in  the  past,  and  there  is  no  reason  why  there  should  not  be 
such  a  law  in  order  to  protect  gold  bars  or  gold  coin  from  being  destroyed. 

MR.  VOORHEIS:  If  the  Government  would  guard  all  gold  coin  and 
put  it  into  bars,  would  there  be  any  destruction  of  coinage? 

GOVERNOR  BOYLE:     Use  only  gold  notes. 


THE  AMERICAN  MINING  CONGRESS  79 

MR.  VOORHEIS:  The  gold  notes  would  be  redeemable  in  gold  and  they 
could  use  gold  bars  for  that  purpose. 

Gold  Certificates 

MR.  LAWRIE:  Of  course,  gold  certificates  for  an  equal  amount  of 
gold  bullion  back  of  them.  Gold  certificates  are  nothing  more  nor  less 
than  a  receipt  for  that  amount  of  gold,  so  that  the  gold  reserve  is  there 
for  the  purpose  of  redeeming  those  certificates;  and  the  balance  of  the 
gold  reserve  in  the  Federal  Reserve  fund  is  practically  all  consumed  now, 
under  the  restrictions  of  the  Federal  Reserve  Act  against  the  deposit 
liability  and  against  Federal  Reserve  notes  and  other  forms  of  currency 
in  circulation;  that  is,  there  is  very  little  free  gold  to  be  dealt  with  in 
any  way  in  the  United  States  without  releasing  it  by  deflation. 

MR.  VOORHEIS:  If  the  producers  of  gold  in  this  country  did  not 
deposit  their  money  with  the  Mint  and  receive  paper  for  it,  where  would 
the  Government  get  any  gold? 

MR.  LAWRIE:  They  are  getting  gold,  of  course,  as  Mr.  Rickard  has 
pointed  out.  I  would  like  to  call  your  attention  to  the  fact  that  our  export 
trade  is  now  seriously  threatened  by  the  fact  that  the  recent  shipments 
of  gold  from  Great  Britain  and  France  have  had.  a  tendency  to  weaken 
their  purchasing  power  in  our  market.  It  has  been  debated  whether 
those  foreign  debts  should  be  made  payable  immediately.  It  seems 
reasonable,  if  our  export  trade  is  to  be  hampered  in  any  way,  to  extend 
the  interest  payments  over  a  greater  period  of  time,  so  that  they  will 
not  lose  this  gold  and  thereby  weaken  their  purchasing  power.  If  $10,- 
000,000  is  received  in  New  York,  and  it  has  a  marked  effect  on  the  money 
market,  whether  it  is  psychological  question  more  than  a  real  one,  I  be- 
lieve is  a  debatable  point.  Probably  it  is  largely  psychological;  but  in 
any  event  it  has  an  expensive  effect  on  the  money  market,  and  a  great 
many  of  these  critics  who  complain  of  the  small  amounts  of  gold,  I  think, 
are  greatly  in  error. 

MR.  MYERS:  Isn't  it  a  fact  that  manufacturers  in  England  have  to 
go  outside  of  that  country  to  buy  the  .gold  which  they  use  for  manufactur- 
ing purposes,  jewelry  and  so  forth,  and  that  the  law  regulates  all  gold? 

MR.  LAWRIE:  There  are  restrictions  upon  the  exportation  of  gold 
by  the  gold  producers  in  South  Africa;  it  is  all  by  certificates,  but  there 
is  a  certain  amount  of  gold  in  any  nation,  and  it  is  more  or  less  out  of 
sight.  It  has  a  mobility,  both  in  the  arts  and  in  the  mint,  and  from 
the  mint  back  into  the  arts.  It  is  almost  impossible  to  regulate  the  destruc- 

Destruction  of  Gold  Coin 

tion  of  gold  coin,  although  there  is  a  law  against  it  in  Great  Britain,  and 
I  believe  also  in  France.  The  United  States  Mint  has  made  no  detailed 
estimate  of  such  destruction  since  1883.  It  did  make  some  yearly  esti- 
mates before  that  time,  and  acounted  for  $3,500,000  per  annum  as  a  regu- 
lar statement.  There  has  been  a  great  deal  more  g»ld  coin  destroyed 
than  that;  dentists  and  small  manufacturers  have  destroyed  it.  We 


80  REPORT  OF  PROCEEDINGS 

exported  gold  to  England  for  industrial  consumption  during  1919,  and  we 
exported  gold  to  France.  $14,500,000  of  that  $80,000,000  was  gold  ex- 
ported specifically  for  manufacturing  purposes,  so  that  on  the  other  hand 
the  French  manufacturer  is  paying  this  exchange  difference  plus  the  cost 
of  transporting.  He  is  paying  three  francs,  in  addition  to  the  sumptuary 
tax  of  $3.60  an  ounce  for  the  privilege  of  manufacturing  at  all;  and  it  is 
levied  on  the  metal  content  of  the  article  of  jewelry. 

MR.  COLLINS:  1  would  like  to  submit  to  this  committee  of  this  Con- 
ference, to  be  considered  in  a  preliminary  way,  a  resolution  with  a  view 
to  submission,  or  otherwise,  to  the  Resolution  Committee  of  the  American 
Mining  Congress: 

"WHEREAS,  the  gold  producers  of  the  United  States  are  in  urgent  need 
of  assistance  to  maintain  their  properties  and  organizations  in  such  con- 
dition as  shall  permit  them  to  maintain  production  in  the  event  that  the 
Congress  of  the  United  States  shall,  through  the  McFadden  Bill,  or  other 
means,  provide  assistance  such  as  shall  enable  them  to  operate,  and, 

"WHEREAS,  the  opposition  by  certain  interests  to  the  McFadden  Bill 
suggests  the  possibility  that  this  sound  and  well-considered  measure  may 
be  delayed  in  passing  through  Congress, 

"THEREFORE,  BE  IT  RESOLVED,  that  iho  directors  of  the  American  Mining 
Congress  immediately  take  such  measures  as  may  be  necessary  in  the 
event  of  the  failure  of  the  passage  through  the  forthcoming  short  session 
of  Congress  of  the  McFadden  Bill,  to  organize  the  gold  producers  of 
the  United  States  and  Alaska  for  the  following  purposes: 

(a)  To  deposit  the  gold  produced  by  them  in  the  mines,  and  demand 
coined  gold  in  exchange  therefor. 

(b)  In  the  case  of  gold  ore  sold  to  smelting  companies  to  arrange  for 
the  equivalent  of  gold  content  to  be  deposited  in  the  Mints,  withdrawn 
as  coined  by  the  smelting  company,  and  delivered  to  the  producer  in  set- 
tlement for  the  ore. 

(c)  To  place  such  gold  in  circulation  by  using  it  in  liqudation  of  pay- 
rolls, in  payment  of  supplies  and  so  forth. 

(d)  To  arrange  with  local  bankers  in  gold-producing  localities  to  fur- 
nish gold  in  all  withdrawals  to  an  amount  equivalent  to  deposits  of  gold 
made  locally  with  them. 

(e)  To    provide   for   companies    where   local   banks   are   unwilling   to 
adopt   this   course,    by   the    organization    of   a   central   gold    bank,    with 
branches  in  various  mining  camps,   organized  under  the   State  banking 
laws. 

(f)  To  conduct  concerted  propaganda  in  favor  of  the  use  of  gold  and 
silver  certificates,  in  preference  to  Federal  Reserve  notes." 

Mr.  Chairman,  I  suggest  that  if  it  meets  wHh  your  approval  that  this 
resolution  should*  be  considered  by  your  committee  and  reported  back  to 
this  conference  for  action. 


THE  AMERICAN  MINING  CONGRESS  81 

CHAIRMAN  MATHEWSON:     Will  you  kindly  turn  the  document  over 
to  the  Chairman? 

If  there  is  nothing  further  to  offer,  we  will  consider  the  meeting  ad- 
journed. 


The  meeting  convened  at  2  P.  M.  Wednesday,  November  17,  1920.  Mr. 
W.  J.  Loring,  of  San  Francisco,  presided. 

THE  CHAIRMAN:  In  the  absence  of  your  Chairman  I  have  been 
requested  to  take  the  chair  this  afternoon. 

The  McFadden  Bill  in  Brief 

I  am  going  to  ask  Mr.  Seaman  to  give  a  short  outline  of  the  McFadden 
Gold  Bill.  At  a  later  meeting  I  hope  somebody  will  ask  Mr.  Seaman,  or 
somebody  else,  to  describe  the  Bill  m  greater  detail,  and  the  reason  for 
such  a  bill,  because  I  am  afraid  that  there  are  a  great  many  people  inter- 
ested in  gold  who  do  not  understand  the  Bill.  I  say  that  because  I  have 
been  asked  whether  it  was  for  the  purpose  of  changing  the  monetary 
value  of  money.  Newspaper  men,  of  all  people,  should  know  what  the 
Bill  is,  and  I  had  one  prominent  newspaper  man  in  San  Francisco  ask 
me  if  that  was  the  case.  If  the  men  occup\dng  public  positions  do  not 
understand  more  about  the  McFadden  Bill  than  to  ask  questions  ol  that 
kind  there  may  be  some  gentlemen  attending  this  Conference  who  do  not 
quite  understand  the  reason  for  it. 

MR.  SEAMAN:  Mr.  Chairman,  with  your  permission  may  I  introduce 
a  reconstructed  resolution?  Yesterday  we  passed  a  short  resolution  favor- 
ing the  McFadden  Bill.  We  have  seen  fit  to  change  that  slightly,  and 
I  would  like  to  read  the  amended  resolution  as  prepared  by  the  com- 
mittee: 

"WHEREAS,  the  Government  of  the  United  States  is  justly  com- 
mitted to  the  gold  standard;  and 

"WHEREAS,  the  maintenance  of  a  healthy  gold-mining  industry  is 
absolutely  essential  to  the  maintenance  of  a  gold  standard;  and 

"WHEREAS,  the  gold-mining  industry  of  the  United  States  is  in  de- 
plorable straits,  having  almost  ceased  to  function,  and  it  is  neces- 
sary to  apply  immediate  measures  for  relief;  and 

"WHEREAS,  the  McFadden  Bill,  H.  R.  13201,  offers  the  best  present 
solution  of  the  problem; 

'•RESOLVED,  that  the  American  Mining  Congress,  in  Convention  as- 
sembled, heartily  endorses  the  McFadden  Bill,  and  pledges  its  sup- 
port to  the  measure,  and  urges  a  like  support  on  the  part  of  all  our 
citizens  who  have  at  heart  the  maintenance  of  the  gold  standard  and 
the  common  welfare  of  the  country." 

This  resolution  was  signed  by  all  of  the  members  of  the  Gold  Confer- 
ence Committee,  and  I  move  its  adoption,  Mr.  Chairman. 


82  REPORT  OF  PROCEEDINGS 

A  DELEGATE:     I  second  the  motion. 

THE  CHAIRMAN:  Gentlemen,  it  has  been  moved  and  seconded  that 
the  resolution  just  read  be  submitted  to  the  Resolution  Committee,  i?  that 
correct? 

MR.  SEAMAN:     Yec. 

(Thereupon  the  chairman  put  the  motion  to  the  delegates  present  and 
the  same  was  carried.) 

[The  resolution  as  finally  passed,  will  be  found  on  page  56.] 

MR.  SPJAMAN:  There  are  only  a.  few  of  us  here,  but  as  your  chairman 
has  stated,  it  seems  that  while  innumerable  copies  of  the  McFadden  Bill 
have  been  distributed,  there  is  still  an  uncertainty  as  to  what  its  real 
meaning  is.  Many  of  our  people,  even  miners,  believe  that  the  bankers 
are  afraid  of  this  proposition  because  it  will  emasculate  the  gold  stand- 
ard. We  must  spread  the  propaganda  that  such  is  not  the  fact. 

What  the  McFadden  Bill  Specifies 

In  the  first  place,  in  order  to  bring  such  a  measure  before  Congress, 
it  was  very  wise — Mr.  Loring  is  responsible  for  this  Bill — to  place  it  on 
the  theory  that  it  is  a  revenue  bill,  primarily  it  is  such,  simply  placing 
upon  the  users  or  the  manufacturers  of  the  product  of  our  energy  a  tax 
that  will  bring  it  up  somewhere  near  commensurate  to  the  cost  of  the 
raw  materials  which  they  use.  That  is  a  simple  statement,  and  we  are 
entitled  to  that  much  consideration  at  the  hands  of  the  people.  The 
McFadden  Bill  simply  says  that  all  manufacturing  jewelers,  and  all  gold 
used  in  the  arts,  when  sold,  is  chargeable  with  a  tax  of  $10  per  ounce 
for  the  gold  contents  of  that  article,  not  when  it  is  manufactured,  but 
when  it  is  ultimately  sold.  That  $10  does  not  amount  to  much  on  a  little 
piece  of  jewelry.  Jewelers,  I  think,  use  the  major  portion  of  the  gold. 
Jewelry  is  a  non-essential  to  begin  with;  and  if  it  is  so,  why  should  they 
enjoy  the  fruits  of  our  labor  without  paying  for  it?  That  is  the  principal 
argument.  By  means  of  the  McFadden  Bill  the  Government  will  get  a 
greater  revenue  than  it  dispenses  to  the  mining  industry.  Mr.  Loring 
has  calculated  that  there  will  be  $8,000,000  or  $10,000,000  more  on  last 
year's  business  to  the  Government. 

In  the  next  place,  when  the  jeweler  wants  gold,  many  people  will  say, 
"Well,  he  will  go  to  Mexico  and  bring  gold  surreptitiously  across  the  border, 
and  will  manufacture  it.  Now,  that  will  be  against  the  best  interests  of 
our  industry.  It  does  not  make  any  difference  where  the  jeweler  gets  it, 
because  the  tax  is  not  imposed  until  he  sells  it;  so  the  argument  that  he 
will  get  the  bullion  does  not  apply.  We  do  not  care  where  he  goes,  but 
when  he  sells  it  he  must  pay  the  tax.  Furthermore,  the  jewelers,  and 
others  who  use  gold  in  the  arts,  have  been  going  to  the  Treasury  of  the 
United  States,  buying  gold  bullion  to  the  extent  of  $5000  or  more  at  a 
time,  and  converting  it  into  jewelry  or  for  other  purposes.  Now  the 
jewelers  are  opposed  to  this  Bill  because  they  think  that  it  is  an  infringe- 
ment upon  their  business. 


THE  AMERICAN  MINING  CONGRESS  83 

Gold  Exports  and  the  Jewelry  Trade 

When  war  was  declared;  when  we  found  that  our  gold  was  seeking 
cover,  as  it  always  does  in  times  of  disaster;  and  when  we  found  that 
Japan  took  $253,000,000  of  our  gold  before  we  knew  what  they  were 
doing;  then  the  Treasurer  of  the  United  States  wrote  to  every  raining 
man  possible,  beseeching  him  under  the  guise  of  patriotism  to  continue 
producing  gold  in  order  that  we  win  the  war.  Yet  the  Secretary  of  the 
Treasury  sells  $80,000,000  of  gold  to  jewelers.  That  is  an  inconsistency  I 
can  very  well  air  right  here. 

All  we  ask  as  a  result  of  the  McFadden  Bill  is  that  they  return  to  us 
somewhat  of  a  measure  of  relief  for  the  conditions  in  which  they  have 
placed  us.  They  used  our  gold,  not  only  as  a  national  value  and  stand- 
ard for  our  currency,  but  as  a  commodity,  only  at  one  price,  and  it  could 
not  respond  to  the  law  of  supply  and  demand.  The  McFadden  Bill  places 
the  burden  upon  the  man  or  woman  who  thinks  he  or  she  should  hava 
a  giddy  trinket  to  wear. 

If  there  are  any  questions  you  would  like  to  ask,  I  would  be  glad 
to  answer  taem  if  I  can.  There  must  be  a  widespread  misunderstanding 
as  to  ihe  purposes  and  effects  of  the  McFadden  Bill. 

THE  CHAIRMAN.  Mr.  Seaman,  would  you  mind  describing  in  some 
detail  what  the  producer  does  with  his  gold,  and  how  the  Bill  brings 
him  any  permanent  relief.  There  are  only  two  sections  in  the  whole  Bill 
that  concerns  us  very  much. 

MR.  McCUTCHEON:  I  am  against  any  resolution  that  will  piece  us 
on  record,  or  will  start  us  attacking  the  gold  standard.  I  think  it  will 
take  us  into  politics.  We  can  support  the  McFadden  Bill  if  it  will  do 
any  good. 

MR.  SEAMAN:  For  your  information  there  is  a  resolution  covering 
every  question  that  you  have  referred  to,  only  that  it  is  for  the  general 
conference.  That  resolution  was  prepared  this  morning. 

MR.  McCUTCHEON:     I  thought  this  was  the  general  conference. 

MR.  SEAMAN:  No,  this  is  only  the  gold  conference.  The  other  reso- 
lution is  for  the  general  conference.  All  we  want  in  this  gold  conference 
is  to  see  that  the  Ways  and  Means  Committee  gets  the  Bill  and  puts  it 
through  the  House,  and  that  the  Senate  gets  it  and  puts  it  through  the 
Senate.  Then  we  can  get  $10  an  ounce  extra. 

MR.  McCUTCHEON:     I  am  in  favor  of  anything  that  will  give  relief. 

MR.  SEAMAN:  I  have  been  requested  to  explain  how  the  gold  producer 
realizes,  and  would  realize  on  this  $10  per  ounce. 

How  the  Gold  Producer  Benefits 

We  produce  gold  largely  by  the  cyanide  process  and  by  smelting.  We 
do  not  send  a  great  deal  of  placer  gold  to  the  Mint;  it  is  nearly  all  shipped 
in  the  form  of  bars.  We  have  Government  Assay  Offices  throughout  the 


84  REPORT  OF  PROCEEDINGS 

country,  which  re-melt  the  bullion  and  give  a  certificate  as  to  fineness  and 
the  amount  due,  with  a  draft  upon  the  Treasurer  of  the  United  States. 
We  can  send  that  draft  to  any  point  and  get  cash — in  any  kind  of  coin, 
gold  coin,  Treasury  notes,  or  anything  else.  But  we  have  a  right  to 
demand  gold  coin  or  gold  bullion  if  we  wish.  When  the  Treasury  De- 
partment has  sold  the  bullion  to  jewelers  or  others,  the  consumer  of  that 
gold  for  the  arts  make  a  return  on  a  blank  prescribed  by  the  Govern- 
ment for  the  amount  of  tax  that  he  pays,  and  that  is  turned  into  the 
Treasury.  The  Treasury  calls  upon  the  proper  department  for  figures  on 
the  amount  of  virgin  or  new  gold  produced,  then  gold  producers  will  get 
from  the  Treasury  an  additional  draft  covering  the  $10  due  because  of 
this  gold.  There  will  be  two  transactions —one  for  the  usual  $20.67  per 
ounce,  and  the  other  $10  after  the  Government  has  determined  how  much 
producers  are  entitled  to.  We  only  ask  for  a  temporary  relief  for  five 
years.  That  answers  the  question,  does  it  not? 

THE  CHAIRMAN:     Yes. 

THE  CHAIRMAN:  You  have  heard  certain  sections  of  the  McFadden 
Bill  explained,  art  tbere  any  points  you  would  like  further  illuminatior 
on? 

MR.  DEWITT:  In  regard  to  the  size  of  the  dollar,  will  it  be  smaller 
or  the  same  size? 

MR.  SEAMAN:  It  has  no  relation  to  that  at  all,  it  comes  out  of  the 
excise  tax  on  jewelery  through  the  machinery  of  the  Treasury  Depart- 
ment in  determining  the  amount  of  our  gold  at  that  time.  In  other  words, 
the  Government  won't  make  $20  or  $30  out  of  it. 

THE  CHAIRMAN:  I  am  glad  that  point  was  mentioned,  because  it  is 
just  exactly  what  I  was  afraid  of,  that  the  people  of  this  country  inter- 
ested in  the  gold  industry  do  not  understand  the  meaning  of  the  McFad- 
den Bill.  It  has  nothing  to  do  with  the  changing  of  the  dollar.  We 
take  our  gold  to  the  bank  or  Mint  and  cash  it  for  $20,  or  $30  an  ounce. 

MR.  SEAMAN:  In  my  testimony,  when  I  was  under  cross-examina- 
tion by  the  Ways  and  Means  Committee,  all  of  these  questions  were  dis- 
cussed because  they  did  not  understand  it  either. 

MR.  YATES:  As  manager  of  one  large  producer  [the  Homestake] 
I  wish  to  say  that  whether  Republicans  or  Democrats,  as  a  Nation  we 
should  protect  our  industries. 

MR.  LAWRIE:  I  would  like  to  say,  this  being  a  matter  of  concern  to 
the  entire  Nation — it  might  be  well  to  bring  it  to  the  attention  of  other 
mining  men — that  it  will  strengthen  the  purchasing  power  of  Europe,  and 
rehabilitate  the  market  for  copper  and  other  products,  which  largely 
depend  upon  the  export  market  for  their  prosperity.  By  calling  atten- 
tion to  this,  I  think  we  will  obtain  the  co-operation  of  other  branches  of 
industry. 


THE  AMERICAN  MINING  CONGRESS  85 

Gold  in  Base  Ores,  But  little  Base  Metal  in  Gold  Ore 

MR.  SEAMAN:  I  just  want  to  emphasize  the  fact  further  that  there 
is  hardly  a  producer  of  copper,  lead,  silver,  tungsten,  or  zinc  but  produces 
more  or  less  geld  as  a  by-product;  whereas  there  are  a  large  number  of 
gold  mines  which  contain  none  of  these  ether  metals,  so  that  all  mining 
companies  are  inteersted  in  this  measure. 

THE  CHAIRMAN:     Are  there  any  other  questions? 

MR.  ROBERT  I.  KERR:  I  endorse  the  statement  made  that  we  take 
our  bars  to  the  Mint  and  get  $30  an  ounce  for  gold. 

MR.  SEAMAN:  No  you  don't;  you  get  $20.67.  After  the  article  has 
been  manufactured  and  sold,  then  we  draw  an  additional  $10  per  ounce 
out  of  it.  That  is  iny  understanding  of  it. 

THE  CHAIRMAN:     That  is  correct. 

MR.  LAWR1E:     In  other  words,  it  conies  from  the  consumer  on  a  lux- 
ury tax,  doesn't  it?  and  does  not  fall  on  the  general  public. 
[Some  extraneous  discussion  here  followed.] 

THE  CHAIRMAN:  I  would  like  to  risk  Mr.  Lawrie  whether  he  has 
investigated  the  inflation  or  deflation  of  the  quantity  of  gold  produced 
in  Europe  since  the  war  was  declared. 

MR.  LAWRIE:  Yes.  All  of  the  figures  that  show  relationship  between 
the  gold  reserves  of  foreign  nations,  and  the  currency  which  they  have 
issued  since  the  war  period,  or  during  the  period  of  the  war  and  since 
then,  have  been  expanding  since  that  time.  It  is  true  the  commodity 
prices  in  the  various  countries  have  increased  more  or  less  proportionately 
with  the  ratio  of  gold  and  currency  that  has  been  directed  upon  it.  That 
destroys  the  quantity  theory  of  money,  because  as  European  countries 
lose  the  gold  they  had  accumulated,  their  prices  advanced  during  the 
period  they  lost  the  gold,  and  they  are  still  advancing  because  they  have 

Currency  of  Foreign  Countries  Weak  Makes  the  Dollar  Strong 

not  the  gold  with  which  to  re-adjust.  It  is  not  that  the  dollar  in  this 
country  is  so  strong  as  it  is  that  the  currency  of  foreign  nations  is  so 
weak. 

THE  CHAIRMAN:  I  would  like  to  ask  if  you  have  investigated  the 
output  of  the  various  European  countries  in  terras  of  gold  as  compared 
to  pre-war  periods? 

MR.  LAWRIE:  Well,  before  the  war  Great  Britain  controlled  in  14 
producing  countries  62.3%  of  the  total  gold  output  of  the  world,  and 
this  year  it  is  estimated  that  the  British  Empire  will  produce  about  75%. 
The  reason  for  thp*t  increase  is  because  the  United  States  proportion  de- 
clined from  23%  in  1914  until  in  1920  it  will  not  exceed  !!<#>.  The  cause 
of  that  is  first  the  gold  producer  of  America  has  been  subjected  to  an 
economic  pressure  to  which  he  has  not  been  in  other  countries;  and 


86  REPORT  OF  PROCEEDINGS 

secondly,  the  British  gold  producer  has  been  assisted  materially  by  the 
exchange  premium,  and  for  that  reason  the  British  gold  decline  has  not 
been  so  great  as  it  has  in  the  United  States.  Great  Britain  will  gain  a 
great  supremacy  in  production  of  gold  unless  we  do  something. 

Gold  as  a  By-product 

During  1918,  $8,000,000  of  gold  was  recovered  as  a  by-product  from  the 
treatment  of  copper  and  lead  ores,  while  in  1919  it  was  less  than  $5,000,- 
000;  and  in  1920  it  will  probably  be  much  less  than  $4,000,000.  The  ques- 
tion cannot,  therefore,  depend  in  any  sense  upon  the  gold  produced  as 
an  incidental  by-product  in  the  treatment  of  base  ores,  and  that  is  the 
reason  why  measures  should  be  promptly  taken  before  the  gold-mining 
industry  ceases. 

MR.  BETTS  of  Oregon:  It  seems  to  me  that  the  point  to  be  dis- 
cussed or  emphasized  is  that  the  McFadden  Bill  is  not  a  measure  merely 
to  allow  the  gold-mining  industry  to  recover,  but  it  is  one  that  affects  the 
whole  country.  Whoever  you  talk  to  should  be  made  to  understand  that 
it  is  a  national  question,  not  merely  a  gold  producer's  question.  It  affects 
all  of  our  industries,  and  it  is  a  financial  as  well  as  an  industrial  ques- 
tion. 

THE  CHAIRMAN:  It  should  be  remembered  that  if  the  McFadden 
Bill  is  passed,  the  Government  will  share  in  the  profit,  as  gold  producers 
will  have  more  money  for  developing  mines  and  other  properties;  conse- 
quently there  will  be  more  taxable  property  in  the  United  States. 

MR.  ELBERT  of  Alaska:  There  is  a  question  I  would  like  to  ask 
Mr.  Lawrie:  In  the  first  place,  what  is  the  total  gold  reserve  of  the 
Nation,  about  six  or  eight  billions? 

MR.  LAWRIE:  No,  the  amount  is  $2,646,615,750,  as  I  showed  in  my 
address  of  yesterday. 

MR.  ELBERT:  Then  can  the  United  States  issue  any  form  of  cur- 
rency against  that  gold  to  the  extent  of  2%  times  that  amount? 

MR.  LAWRIE:  The  fact  is,  when  I  say  the  gold  stock  is  $2,600,000,000 
or  so,  that  has  been  segregated  by  the  effort  of  the  Federal  Reserve  Act  so 
that  approximately  $2,000,000,000  of  that  amount  is  properly  given  in  as 
a  reserve  against  the  currency  and  net  deposits  of  the  Federal  Reserve 
Act.  The  Federal  Reserve  Act  specifies  that  of  net  deposit  of  the  Federal 
Reserve  System  35%  must  be  carried  in  gold.  After  setting  aside  that 

Gold  Back  of  Federal  Reserve  Notes 

amount,  there  is  to  be  40%  gold  maintained  against  the  Federal  Reserve 
notes  in  circulation.  This  means  that  there  is  a  gold  cover  in  excess 
of  that  required  by  the  Federal  Reserve  Act  of  6.6  cents  of  every  dollar 
for  Federal  Reserve  notes  in  circulation.  There  are  12  Reserve  districts, 
New  York  Reserve  probably  commanding  the  most  important  position,  by 
volume  of  business.  Their  ratio  has  been  down  practically  to  the  zero 


THE  AMERICAN  MINING  CONGRESS  87 

limit  under  the  Federal  Reserve  Act,  and  it  would  be  impossible  for  the 
whole  Federal  Reserve  to  reduce  it  to  40  cents  and  maintain  the  gold 
cover  in  the  various  subsidiary  districts.  So,  at  the  present  time,  they 
are  down  to  the  minimum.  That  gold  is  tied-up.  They  have  to  draw  in 
and  cancel  Federal  Reserve  notes  or  lessen  the  net  deposit  in  order  to 
release  that  gold  for  other  purposes. 

MR.  BETTS:  Then,  I  understand  that  practically  all  of  the  gold  re- 
serve is  consumed? 

MR.  LAWRIE:  Practically,  there  is  no  free  gold  fdr  any  other  use 
than  reserve  against  the  currency  and  credit  of  the  Federal  Reserve 
Banks.  There  is  very  little  exportable  surplus,  we  will  say. 

MR.  BETTS:  Can  you  tell  me  how  much  the  Liberty  Bonds  outstand- 
ing total  in  gold? 

MR.  LAWRIE:  The  Treasury  Department  has  $1,800,000,000,  and  I 
think  the  net  debt  is  something  like  $22,500,000,000  still  outstanding  that 
has  to  be  met. 

MR.  BETTS:  Then,  the  Government  has  got  $23,000,000,000  promised 
and  nothing  to  meet  it  with? 

MR.  LAWRIE:  All  of  these  promises  do  not  come  due  at  one  time, 
they  are  all  projected  into  the  future,  and  it  is  supposed  that  the  financial 
structure  of  the  country  will  become  so  straightened  that  there  will  not 
be  any  embarrassment  with  regard  to  the  redemption  of  the  interest  and 
payment  of  Liberty  Bonds. 

MR.  BETTS:  If  we  are  not  going  to  produce  gold  we  will  have  a  hard 
time  paying  Liberty  Bonds  in  gold. 

MR.  SEAMAN;  Mr.  Lawrie,  you  have  special  information  on  some  of 
these  subjects,  but  just  to  show  to  the?e  people  how  the  wind  blows,  and 
to  show  that  we  are  only  asking  a  simple  act  of  justice  from  the  Govern- 
ment, I  wish  you  would  state  in  what  way  the  Government  is  profiteering 
itself  against  the  gold-mining  industry  by  the  Treasury  Department  giving 
the  subsidy  to  the  jewelers.  They  themselves  are  guilty  of  giving  this 
subsidy  to  the  jeweler.  Will  you  state  the  reasons  for  that? 

MR.  LAWRIE:  The  reason  that  this  premium  to  the  gold  producer  has 
been  attacked  is  on  the  ground  that  it  is  a  subsidy  to  the  gold  producer. 
As  a  matter  of  fact  it  is  merely  part  compensation  for  the  loss  of  the 

Premium  not  a  Subsidy  to  Gold  Mines 

purchasing  power  of  the  gold  produced  due  to  the  purchasing  power  ot 
the  dollar,  and  that  arises  from  the  fact  that  the  Government  is  arbitrarily 
fixing  the  price  of  gold.  What  the  Government  has  done  it  should  also 
be  able  to  relieve,  as  it  becomes  a  matter  of  national  necessity,  and  th<* 
Government  certainly  must  have  the  power  to  relieve  a  situation  that  it 
has  already  created.  On  the  other  hand,  inasmuch  as  the  gold  con- 


88  REPORT  OF  PROCEEDINGS 

sumer  in  the  industrial  arts  has  been  supplied  with  the  metals  at  a  pre- 
war price,  while  all  other  industries  have  been  forced  to  pay  increases,  it 
is  perfectly  plain  that  this  excise  tax  is  only  a  part  tax,  while  all  other 
industries  are  paying  about  120%,  so  that  the  industrial  consumer,  in 
the  first  two  or  three  years  and  a  portion  of  this  year,  will  still  be  sub- 
sidized after  paying  the  excise  tax,  as  they  will  be  getting  their  material 
at  a  percentage  of  increase  less  than  others  are  forced  to  pay. 

MR.  SEAMAN:  I  was  getting  at  the  fact  that  the  Government  was 
accepting  40%  on  excess  profits  to  pay  the  cost  of  war;  the  Government 
itself  is  profiteering  to  the  extent  that  it  is  interested  in  that  40%  excise. 

MR.  BET.TS:  Mr.  Lawrie,  if  the  reserve  of  the  Federal  Reserve  system 
is  up  to  the  limit,  and  we  will  say  the  jewelry  trade  draws  a  considerable 
amount  of  gold  from  the  Treasury,  isn't  it  a  fact  that  they  have  to  de- 
crease the  notes  in  circulation  so  that  the  reserve  will  not  be  full  up  to  the 
limit? 

MR.  LAWRIE:  Of  the  $2,600,000,000  of  that  amount,  approximately 
52,000,000,000  is  in  the  Federal  Reserve  system.  It  is  not  from  the  Federal 
Reserve  system  that  the  gold  is  drawn  for  that  business.  That  would 
not  in  any  way  complicate,  or  would  net  force  a  reduction  in  the  note 
circulation  and  net  deposit  liabilities  of  the  Federal  Reserve  Bank. 

THE  CHAIRMAN:  Are  there  any  further  questions  anyone  desires  to 
ask?  We  have  plenty  of  copies  of  the  McFadden  Bill,  and  all  of  those  who 
have  not  read  it  I  would  suggest  that  they  get  a  copy. 

Mr.  McFadden  Unable  to  Attend 

I  have  a  telegram  from  Mr.  McFadden  at  Washington,  as  follows: 

"Transportation  arrangements  had  been  completed  for  my  attendance 
tonight,  but  at  the  last  moment  most  important  mattery  concerning  the 
program  of  financial  reconstruction  compelled  me  to  remain  here  and 
forego  the  pleasure  of  addressing  the  Convention  upon  the  most  important 
subject  of  maintaining  the  normal  gold  production,  which  is  fundamental 
to  the  financial  security  of  the  Nation.  My  reply,  delivered  before  the 
Convention  of  the  American  Bankers'  Association  on  October  21,  to  the 
adverse  report  of  special  committee,  explains  fully  the  need  for  this  con- 
structive legislation  to  protect  the  monetary  gold  reserve.  Please  con- 
vey to  the  Convention  my  sincerest  regret  that  circumstances  prevent  my 
attendance  at  this  most  important  meeting." 

(The  meeting  then  adjourned.) 


THE  AMERICAN  MINING  CONGRESS  89 

TARIFF  CONFERENCE 

American  Mining  Congress 
THURSDAY,  NOVEMBER  18,  1920,  2  P.  M. 

Mr.  Nelson  Franklin,  of  Denver,  presided. 

MR.  H.  W.  SMITH:  I  want  to  introduce  to  you  as  Chairman  of  this 
afternoon's  meeting  Mr.  Nelson  Franklin,  of  Denver,  who  has  been  active 
during  most  of  the  past  year  in  Washington  in  behalf  of  the  War  Minerals 
tariffs,  with  particular  reference  to  the  tariff  on  tungsten. 

MR.  NELSON  FRANKLIN:  It  is  not  my  purpose  to  make  any  speech 
on  the  tariff  question,  or  on  any  other  question,  or  to  take  up  much  of 
your  time.  You  are  not  here  to  hear  a  lot  of  statistics  and  technical 
information  in  reference  to  these  so-called  war  minerals,  but  you  are 
here  to  know  what  is  being  done  in  Washington,  and  what  efforts  are 
being  made  towards  getting  legislation  enacted  to  protect  the  mineral 
interests  of  this  country. 

Status  of  the  Tungsten  Bill 

As  Mr.  Smith  said,  I  spent  about  seven  months  of  the  past  year  in 
Washington,  particularly  concerning  legislation  on  tungsten.  Congress- 
man Timberlake  introduced  a  bill  on  tungsten  in  June,  1919.  That  bill 
passed  the  House  in  August  after  a  hearing  by  the  Ways  and  Means 
Committee,  and  went  to  the  Senate.  We  participated  in  a  number  of  hear- 
ings in  the  Senate  on  the  tungsten  bill,  one  in  November,  1919,  and 
another  one  in  January,  1920.  We  had  expected  during  the  last  session, 
which  closed  in  June,  that  the  tungsten  bill  would  become  law  before  the 
close  of  that  session,  but  on  account  of  the  great  pressure  of  business 
before  Congress,  it  failed  to  pass.  The  bill  is  now  [November,  1920]  on 
the  calendar  of  the  Senate,  and  those  who  have  charge  of  it,  other  than 
myself,  are  promised  by  the  Senators  that  the  Senate  will  take  action 
immediately  on  the  convening  of  Congress  in  December. 

On  all  of  the  bills  that  go  especially  before  the  Senate — and  the  same 
is  true  of  those  before  the  House — considerable  information  has  to  be 
given.  They  do  not  pass  lightly  over  these  matters,  and  they  do  not 
agree,  when  you  talk  to  them,  to  put  your  bill  through;  therefore  it  needs 

considerable  persuasive  argument. 

• 
That  is  the  condition  of  the  tungsten  bill  at  this  time.     We  received 

every  assistance  from  the  American  Mining  Congress.  Frank  Griffin  of 
California  and  myself  were  in  charge  of  the  bill  all  the  time;  we  were 
assisted  by  others  part  of  the  time.  We  worked  with  the  people  who  had 
the  zinc  bill.  I  think  that  any  tariff  legislation  on  other  minerals  will  be 
hard  to  get  through  in  the  short  time  between  December  6  and  March  4. 


90  REPORT  OF  PROCEEDINGS 

However,  I  believe  that  the  next  session  of  Congress  will  pass  the  general 
tariff  bill  on  the  so-called  war  minerals. 

Need  for  Tariff  on  Tungsten 

To  give  you  an  idea  about  the  necessity  for  the  tariff  on  tungsten,  I 
will  say  simply  that  at  the  hearings  before  the  Ways  and  Means  Com- 
mittee and  the  Finance  Committee  of  the  Senate  we  presented  sworn 
statements  as  to  the  cost  of  producing  tungsten  in  different  parts  of  the 
United  States.  It  was  shown  that  the  average  cost  of  producing  a  unit 
of  tungsten  is  $13.60,  exclusive  of  depletion  or  depreciation.  Of  course, 
there  are  a  lot  of  mines  that  can  not  work  at  a  tariff  of  $9  a  unit.  It  was 
$10  a  unit,  but  finally  those  that  had  it  in  charge  in  the  Finance  Com- 
mittee cut  it  to  $9.  That  carries  with  it  a  compensatory  tariff  on  all  the 
official  products  of  tungsten. 

Tungsten  is  now  coming  from  China  at  $5  a  unit,  c.i.f.  New  York,  or 
any  other  seaport,  and  shows  a  profit,  for  this  reason:  In  1918  they  dis- 
covered a  large  surface  deposit  of  tungsten  in  China.  Up  to  that  year 
they  had  probably  not  exported  to  America  more  than  700  or  800  tons  in 
any  year.  We  cannot  compete  with  the  low-paid  labor  of  China,  but  with 
a  tariff  of  $9  a  unit  we  can  start  to  do  business;  and  as  the  mines  develop, 
we  can  probably  compete  with  China  on  that  tariff.  In  the  meantime, 
there  is  not  a  tungsten  mine  in  operation  in  the  United  States 

We  are  expecting  our  Colorado  representative  on  the  United  States 
Tariff  Commission,  Mr.  E.  P.  Costigan,  to  tell  you  what  their  plans  are, 
and  the  evidence  being  accumulated  concerning  all  of  these  minerals. 

Meanwhile,  I  will  first  call  upon  Senator  Voorheis  of  California,  whose 
company,  the  Atolia,  was  the  first  to  discover  tungsten  in  California,  and 
the  first  to  produce  any  large  quantity.  Tungsten  was  first  discovered  in 
the  United  States  in  1900 — in  Boulder  County,  Colorado 

Cost  of  Producing  Tungsten 

SENATOR  VOORHEIS:  We  can  never  mine  any  tungsten  in  the 
United  States  without  a  tariff.  During  the  last  year  that  our  company 
operated,  it  cost  $13.60  a  unit  to  produce  the  ore.  Chinese  ore  is  deliv- 
ered in  New  York  and  sold  for  $4.50  and  $5  a  unit;  therefore  no  mine  can 
operate  without  a  duty,  unless  we  could  get  labor  at  the  same  price  as 
paid  in  China.  That  we  never  want  to  see  happen.  If  the  bill  passes  and 
the  President  signs  it,  the  act  will  immediately  become  a  law,  but  the 
large  stocks  that  are  now  in  the  country  will  have  to  be  exhausted  before 
the  price  will  be  raised  sufficiently  to  allow  Californian  and  Colorado 
mines  to  operate.  We  hope  for  favorable,  action  by  Congress  and  the 
President. 

CHAIRMAN  FRANKLIN:  We  have  with  us  today  the  author  of  the 
present  tungsten  bill,  our  good  Congressman  from  the  Second  District  of 
Colorado,  the  Hon.  Charles  B.  Timberlake,  who  knows  all  about  the 
progress  of  the  bill,  and  I  will  call  upon  him  to  come  to  the  platform. 


THE  AMERICAN  MINING  CONGRESS  91 

MR.  TIMBERLAKE:  I  am  the  author  of  the  bill,  due  to  the  fact  that 
I  represent  the  Second  District,  in  which  lies  Boulder  County,  where 
tungsten  was  originally  discovered  in  Colorado.  Soon  after  my  election 
in  1914,  and  after  going  to  Washington,  I  acquainted  myself  with  condi- 
tions in  the  Boulder  tungsten  fields.  I  saw  that  a  tariff  was  necessary, 
and  I  introduced  the  present  tariff  bill  in  1919,  but  the  first  one  in  1916. 
War  intervened,  and  nothing  further  could  be  done;  but  when  the  armis- 
tice was  signed  we  were  not  long  in  doubt  as  to  the  future  of  the  tungsten 

Condition  of  Tungsten  Mining  in  Colorado 

industry,  when  our  markets  were  opened  to  foreign  products.  Shortly 
after,  all  of  the  tungsten  mines  in  this  country  were  closed  down,  being 
unable  to  compete  with  products  from  South  America  and  China.  It  was 
at  that  time  [1919]  that  I  re-introduced  the  tungsten  bill.  I  was  induced 
to  do  this  by  the  President  in  his  address  to  Congress,  in  which  he  re- 
counted the  experiences  that  had  been  gained  in  this  war  with  reference 
to  the  necessity  for  this  country  to  protect  itself  in  the  future  by  encour- 
aging production  of  those  metals  and  minerals  which  had  been  found  to 
be  so  necessary. 

[Mr.  Timberlake  thereafter  detailed  how  the  tungsten  bill  was  steered 
through  Committees;  its  passing  the  House  in  August,  1919;  submission 
to  the  Senate;  opposition  by  certain  manufacturers,  etc.]. 

CHAIRMAN  FRANKLIN:  We  have  with  us  Judge  John  F.  Davis  from 
California,  who  spent  a  great  deal  of  time  in  Washington  last  year  during 
the  progress  of  this  tungsten  legislation. 

HON.  JOHN  F.  DAVIS:  I  feel  like  apologizing  to  you  for  the  action 
of  the  Chairman  in  calling  upon  me  to  say  anything  on  this  subject,  but, 
of  course,  I  recognize  that  when  we  are  waiting  for  something  that  almost 
anyone  can  be  drafted  from  the  audience  as  a  filler  in,  without  having 
the  privilege  of  registering  his  protest. 

[Mr.  Davis  thereupon  gave  his  views  on  the  political  situation  generally]. 

CHAIRMAN  FRANKLIN:  We  also  have  with  us  Mr.  A.  Cressy  Mor- 
rison of  New  York,  whose  company  is  largely  interested  in  manufacturing 
products  from  the  tungsten  of  our  mines. 

MR.  MORRISON:  It  will  interest  you  to  know  that  the  electric  fur- 
nace in  which  ferro-alloys  are  made,  largely  had  its  practical  development 
in  this  country,  and  many  of  these  alloys  originated  here.  That  early 
work  gave  promise  of  great  advantage  to  America,  but  shortly  after  it  had 
got  a  mere  foothold,  the  two  principal  manufacturers  took  up  the  produc- 
tion of  ferro-alloys.  Up  to  about  1908  there  was  little  ferro-alloy  business 
done  in  this  country.  By  ferro-alloys  is  meant  a  mixture  of  iron  with 
some  mineral  such  as  chrome,  manganese,  molybdenum,  silicion,  tungsten, 
and  zirconium  [some  of  which  Mr.  Morrison  described].  They  are  used  in 
making  special  steels. 


92  REPORT  OF  PROCEEDINGS 

Tariff  on  Ferro-Alloys 

Owing  to  misinterpretations  there  was  practically  no  protection  on  the 
ferro-alloys,  prior  to  1908,  and  at  the  time  of  the  Payne  Bill  nothing  had 
been  done  to  secure  protection.  By  the  Payne  Bill,  the  tariff  on  ferro- 
chrome  was  22%  for  what  is  called  low-carbon  chrome,  and  25%  for  high- 
carbon  chrome,  and  25%  on  the  other  alloys.  Then  came  the  Underwood 
Bill  and  I  am  inclined  to  think  that  had  Underwood  not  been  in  a  position 
to  appreciate  the  value  of  ferro-alloys  the  duty  would  have  been  reduced 
still  further;  it  was  reduced  from  20  and  25%  to  15%  flat,  and  there  it  is 
today.  That  is  not  an  adequate  protection. 

You  will  be  interested  to  know  that  at  the  tariff  hearing  where  Mr. 
Underwood  was  presiding,  the  argument  was  advanced  in  1912  or  1913 
that  should  this  country  enter  war,  ferro-alloys  would  be  absolutely  essen- 
tial. The  laughter  arising  from  such  an  argument  would  have  been 
amusing  if  it  had  not  been  so  tragic.  As  a  matter  of  fact,  no  attention 
whatever  was  paid  by  the  Underwood  committee  to  the  theory  that  we 
should  build  up  in  this  industry  the  ability  to  manufacture  war  essentials. 

CHAIRMAN  FRANKLIN:  I  will  now  call  on  Mr.  Harrison  Wilson 
Smith,  chief  of  the  minerals  division,  American  Mining  Congress,  to 
explain  what  are  the  ideas  of  that  organization  concerning  this  legislation. 

MR.  SMITH:  The  American  Mining  Congress  is  not  a  partisan  organi- 
zation; it  at  no  time  adheres  to  the  tenets  of  any  political  party;  it  is 
neither  a  free  trade  nor  a  protectionist  organization;  but  it  has  ceased  to 
apologize  for  and  it  has  ceased  to  explain  any  activity  for  worthy  tariff 
measures  on  American  metals  that  need  protection;  because  any  Ameri- 
can mining  industry  that  buys  its  materials,  supplies,-  equipment,  ma- 
chinery, and  labor  in  a  protective  market,  should  be  entitled  to  sell  its 
finished  products  in  a  protective  market,  in  case  such  protection  is  nec- 
essary for  the  life  of  the  industry,  and  that  industry  is  necessary  for  the 
industrial  fabric  of  the  Nation. 

Cloud  of  Conservation 

One  of  the  first  objections  that  we  have  had  in  our  tariff  fight  has  been 
the  influence — the  shadow  you  might  say — that  has  hung  over  this  country 
for  a  period  of  12  to  15  years,  which  we  can  call  a  cloud  of  extreme  con- 
servation. Any  man  .who  predicted  any  statement,  any  theory,  any  plat- 
form on  the  necessity  for  conservation  of  some  natural  resource,  was  held 
immediately  as  a  prophet,  without  regard  to  the  economic  principles  in- 
volved. It  was  a  sort  of  a  front-parlor  conservation  of  resources.  This 
type  of  conservation  is  to  be  severely  criticized,  such  as  by  a  member  of 
the  U.  S.  Tariff  Commission,  who  made  this  statement: 

"That  such  conservation,  regardless  of  the  needs  of  American  industry 
is  the  conservation  of  inertia,  and  a  totally  undeveloped  natural  resource 
is  as  indolent  to  American  industry  in  times  of  peace  production  as  a 
totally  depleted  one;  and  between  the  two  we  must  find  some  indus- 
trial means  by  which  our  American  resources  can  be  operated  on  an 
economic  basis.  We  have  learned,  since  the  cessation  of  the  war,  that 


THE  AMERICAN  MINING  CONGRESS  93 

these  mineral  industries  are  more  than  war  minerals — they  are  peace- 
time minerals;  their  development  and  the  production  from  these  Ameri- 
can mines  is  necessary.  All  these  minerals  are  so  interwoven  with  our 
industrial  fabric  that  these  threads  of  industry  cannot  be  pulled  out  and 
leave  the  fabric  whole.  They  form  not  only  part  of  the  pattern,  but  they 
form  part  of  the  strength  of  the  fabric." 

I  think  that  I  can  give  you  a  clear  illustration  of  why  the  tungsten  peo- 
ple got  results:  Not  only  were  they  on  the  job  in  Washington,  but  they 
were  intelligently  on  the  job;  and  regardless  of  all  efforts  the  Mining 
Congress  put  forth,  regardless  of  all  the  interests  that  the  investigating 
bureaus  of  the  Government  have  and  the  confidence  tljat  they  may  give 
to  these  tariff  officials,  it  is  apparently  absolutely  incumbent  upon  the 
industry  to  have  its  own  representatives  there  to  present  the  standpoint 
of  the  producers  and  the  owners  of  the  property.  I  am  not  as  well  versed 
in  tungsten  or  graphite  or  pyrites  as  the  gentlemen  present,  but  the 
Mining  Congress,  through  its  tariff  organization,  does  gather  a  unit  of 
information  which  interlocks  all  of  these  interests,  and  brings  them  to- 
gether as  one  problem,  in  a  way  in  which  no  one  interest  can  present 
for  itself. 

Result  of  Idle  Mining  Fields 

We  have  before  us,  and  we  must  show  that  the  country  has  before  it, 
the  question  of  whether  or  not  we  are  to  have  idle  mining  towns,  aban- 
doned and  flooded  mines,  men  seeking  other  employment,  the  permanent 
loss  of  skilled  miners  and  other  workers  in  these  particular  industries, 
the  disturbance  of  industrial  conditions  in  communities  that  range  as  high 
as  Boulder,  Colorado,  or  even  of  some  of  the  outlying  districts  contiguous 
to  Butte,  Montana  [such  as  Great  Falls],  where  their  alloy  furnaces  are 
located;  or  whether  we  are  to  have  a  continuous  operation,  busy  towns, 
operating  mines,  with  the  money  for  this  labor,  for  this  production,  and 
for  the  minerals  remaining  in  this  country? 

Among  your  problems,  and  possibly  the  first  one  with  which  you  have 
to  deal,  in  presenting  any  of  these  mineral  questions  to  Congress,  is  the 
very  effect  of  the  interlining  of  your  industry  with  the  industrial  fabric. 
Where  your  industry  crosses  the  lines  of  another,  and  where  they  are  tem- 
porarily securing  their  raw  materials  from  abroad  at  a  price  lower  than  it 
can  be  purchased  in  this  country,  we  may  expect  opposition.  The  best 
crystallization  of  sentiment  with  regard  to  just  such  opposition  was 
expressed  by  the  Chairman  of  the  Ways  and  Means  Committee  in  the 
hearings  on  graphite.  The  largest  graphite  manufacturing  company  in 
the  United  States  was  opposing  the  miners  of  graphite  from  Alabama, 
Pennsylvania,  and  the  West.  Their  representative  was  asked  this  ques- 
tion after  he  had  finished  his  statement  in  opposition  to  the  tariff: 

Double  Attitude  on  Tariff  by  Graphite  People 

"Do  you,  then,  oppose  a  tariff  on  the  American  graphite  mining  indus- 
try?" To  which  he  replied:  "I  emphatically  do  oppose  such  a  tariff;  it 
imposes  too  great  a  burden  on  the  ultimate  consumer;  it  is  unnecessary 
for  the  protection  of  the  industry;  if  the  industry  has  merit,  it  can  live 


94  REPORT  OF  PROCEEDINGS 

without  a  tariff,  and  it  will  seriously  disrupt  all  the  manufacturing 
business." 

The  Chairman  of  the  Committee  then  asked  him:  "You  have,  have 
you  not,  a  tariff  on  your  manufactured  graphite  products?"  To  which 
he  replied,  "We  have."  "Do  you  wish  it  discontinued?"  To  which  he 
replied:  "We  would  perish  without  it." 

Following  that  statement,  the  Chairman  said:  "I  have  small  patience 
with  any  branch  of  any  industry  enjoying  prosperity  under  protection  that 
appears  before  this  Committee  and  asks  that  the  same  right  of  protec- 
tion be  denied  to  leading  branches  of  the  same  industry."  (Applause.) 

I  want  to  emphasize  further,  in  speaking  of  work  in  Washington,  what 
Mr.  Davis  said  regarding  the  attitude  of  legislators  who  are  considering 
these  problems:  The  attitude  of  the  business-man  up  to  the  last  few 
years  has  been  to  put  his  feet  on  his  desk  and  swear  at  some  of  our 
Congressmen  and  some  particular  group  of  Senators  (Laughter).  The 
longer  I  work  in  Washington  the  more  I  am  convinced  of  the  •  serious, 
earnest,  conscientious  thoughtfulness  with  which  all  of  these  men 
approach  the  great  problems  before  them.  You  have  no  conception,  with- 
out a  close  contact  with  activities  in  Washington,  of  how  far-reaching  in 
their  effects  are  all  the  measures  that  come  before  Congress  for  serious 
consideration.  Every  man  that  goes  to  Washington  asking  for  some 
particular  thing,  although  you  may  believe  that  it  is  something  that  need 
not  be  granted,  puts  up  a  good  argument.  That  is  the  condition  with 
which  one  has  to  compete.  People  come  to  Washington  wanting  special 
things;  executive  departments  want  special  things  in  the  way  of  legisla- 
tion, and  go  away  disgruntled  and  dissatisfied  with  their  Government 
because  they  do  not  get  as  good  service  as  when  they  go  to  a  cigar  store 
for  a  smoke.  It  cannot  be  done  that  way. 

How  the  Mining  Congress  Assists 

In  its  work  on  tariffs  the  Mining  Congress  has  two  measures  of  activi- 
ties: The  first  is  in  its  co-operation  with  members  of  Congress  who  are 
anxious  for  basic  statistics  on  which  to  form  their  opinions.  The  Mining 
Congress  endeavors  to  supply  these  figures  or  information,  and  the  entire 
basis  on  which  the  legislation  is  asked  for,  is  as  concise,  non-technical, 
and  understandable  as  possible.  The  more  intricate  work  is  presented 
to  the  Geological  Survey,  particularly  to  the  Tariff  Commission,  of  facts 
and  statistics  with  regard  to  domestic  and  foreign  production,  precise 
labor  conditions,  and  balances  of  credit  between  this  and  foreign  coun- 
tries. 

I  have  with  me  a  sheet  which  will  give  you  something  of  an  idea  of 
the  class  of  work  that  the  tariff  division  of  the  Mining  Congress  does  in 
this  regard.  This  sheet  is  long  and  intricate,  and  is  much  too-detailed 
and  technical  to  consider,  but  by  reading  the  headings,  you  can  see  the 
economic  basis  on  which  our  requests  of  the  Tariff  Commission  are  made. 

Data  are  given  in  this  sheet  on  the  following  minerals:  antimony, 
pyrites,  chrome,  graphite,  lead,  manganese,  molybdenum,  potash,  tungs- 
ten, and  zinc,  including  the  annual  production  in  the  United  States" — pre- 


THE  AMERICAN  MIXING  CONGRESS  95 

war,  war  period  and  post-war;  imports  from  foreign  countries — pre-war,  war 
period,  and  post-war;  and  the  prevailing  prices  before  the  war,  during 
the  war,  and  at  present;  cost  of  production  in  the  United  States  under 
the  various  conditions  cited,  and  the  cost  of  production  in  foreign  coun- 
tries; and  the  relative  trade  balances  of  these  countries  with  the  United 
States  for  the  year  ending  June  30,  1920;  the  existing  tariff,  if  any,  on 
these  minerals;  the  tariff  necessary  for  continuous  operation  of  the  in- 
dustry; and  the  probable  mineral  deposits  available  in  the  United  States. 
This  is  a  type  of  information  that  must  be  flexible,  elastic,  and  subject  to 
constant  revision,  as  the  basic  facts  on  which  the  statistics  are  based 
undergo  changes. 

Frankness  Required  by  Congress 

I  want  every  man  who  is  interested  in  a  mining  industry  which  needs 
protection,  if  he  does  not  feel  so  already,  to  be  absolutely  assured  that 
the  Tariff  Commission  wants  to  understand  your  problems.  It  wants  to 
give  you  in  its  reports  to  the  Ways  and  Means  Committee  the  utmost 
frankness,  and  the  utmost  fairness  and  the  utmost  completion  in  all 
details.  The  Tariff  Commission  does  not  recommend  a  policy — it  presents 
facts  based  on  these  statistics,  which  shows  the  relative  conditions  of 
these  industries  with  foreign  countries  and  the  conditions  on  which  the 
Ways  and  Means  Committee  must  base  its  position  whether  or  not  it 
will  grant  a  tariff.  You  are  not  sitting  down  to  a  blind  game  of  poker  in 
asking  for  a  mineral  tariff;  the  cards  are  all  on  the  table;  they  are  of 
interest  and  value  to  mineral  tariffs,  and  when  presented  to  the  Tariff 
Commission  will  receive  their  due  weight  and  consideration: 

The  Mining  Congress,  through  'its  Tariff  Division,  pledges  its  continu- 
ous and  general  co-operation  in  presenting  to  the  Commission  and  to  the 
legislative  bodies  of  the  United  States  all  information  necessary  in  ask- 
ing for  justice  for  American  industry,  and  in  asking  that  American  min- 
ing industry  not  suffer  longer  under  the  incubus  of  foreign  production, 
cheap  foreign  prices,  and  a  depreciated  foreign  market. 

I  shall  be  glad  to  answer  any  questions  that  you  may  feel  like  asking 
me  as  representative  of  the  Tariff  Division  of  the  American  Mining  Con- 
gress, whether  it  applies  to  your  own  industry,  whether  it  applies  to  tariff 
policy,  or  whether  it  applies  to  the  tentative  program  for  the  coming 
year,  it  does  not  matter. 

A  MEMBER:  I  should  like  to  ask  a  question  regarding  manganese: 
Mining  manganese  at  Leadville  is  dead  because  it  is  impossible  to  ship  it. 
Is  that  to  be  protected?  or  is  there  a  special  effort  to  be  made  in  regard 
to  getting  that  protection?  It  does  not  seem  to  be  mentioned  in  con- 
nection with  the  tungsten  bill.  Is  there  any  bill  being  offered  for  their 
protection? 

Status  of  Manganese  and  Graphite 

MR.  SMITH:  I  will  read  from  the  statistical  sheet  exhibited:  The 
only  mention  that  I  remember  in  connection  with  manganese  was  the 


96  REPORT  OF  PROCEEDINGS 

suspension  of  operations  at  Butte  and  Philipsburg.  Manganese  has  not 
been  ignored;  I  have  a  property  myself.  Congressman  Flent  has  intro- 
duced a  bill  that  is  now  before  the  Ways  and  Means  Committee,  which 
asks  for  a  duty  of  35  cents  per  Ib.  on  the  manganese  content  therein, 
and  75  cents  on  the  manganese  content  in  ferro-manganese.  This  bill  has 
not  been  debated,  but  I  have  been  working  with  the  Congressmen,  assem- 
bling statistics  and  getting  the  material  in  shape. 

A  MEMBER:     What  is  the  proposed  tariff  for  graphite? 

MR.  SMITH:  I  have  it  on  the  sheet,  but  it  is  not  re-classified.  There 
have  been  three  graphite  bills  introduced:  The  first  was  by  Mr.  Heffner 
of  Alabama,  on  request.  It  provides,  first,  on  crude  crystalline  graphite 
ores,  1  cent  per  pound  of  ore  for  ores  containing  50%  or  under  of  graphitic 
carbon;  2  cents  per  pound  of  ore  for  ores  containing  over  50%  of  graphitic 
carbon — the  term  "crude  graphite  ores"  being  defined  for  the  purposes 
of  this  Act  as  ore  which  has  not  been  subjected  to  any  process  of  refining 
or  concentration  which  changes  the  graphite  content  of  the  ore  as  mined. 

Second,  on  lump  or  chip  crystalline  graphite,  3  cents  per  pound  of 
graphite,  and  so  on. 

Third,  flake  crystalline  graphite,  6  cents  per  pound  of  graphite. 

Fourth,  all  other  products,  manufactured  materials  and  compounds, 
containing  graphite,  5  cents  per  pound  for  the  graphite  contained  therein. 

They  have  two  other  bills — H.  R.  11815  and  11581,  in  which  crude  crystal- 
line graphite  ores  are  protected  on  a  basis  of  1  cent  per  pound  of  ore  for 
ores  containing  50%  or  under  of  graphitic  carbon;  2  cents  per  pound  for 
ores  containing  over  50%  of  graphitic  carbon;  lump  and  chip  crystalline 
graphite,  3  cents  per  pound;  flake  crystalline  graphite,  6  cents  per  pound, 
and  all  other  products  5  cents  per  pound  for  the  graphite  contained 
therein.  Those  are  before  the  Ways  and  Means  Committee  of  the  House 
for  consideration. 

We  have  representatives  of  several  other  industries  here  who  have 
not  had  anything  to  say  about  the  needs  of  their  industry.  I  should  like 
to  ask  either  Mr.  Baker,  Mr.  P.  S.  Smith,  or  Mr.  Woodruff,  to  tell  us 
respectively  of  mercury,  or  of  the  graphite  problems,  if  they  will  be  so 
courteous  to  do  so.  And  I  think  I  see  Mr.  Fletcher  Hamilton  of  California. 
He  promised  faithfully  to  say  something  about  quicksilver  this  afternoon. 

The  Quicksilver  Industry 

MR.  HAMILTON:  Quicksilver  is  on  the  down  grade  in  California. 
Last  year  I  spoke  before  the  Tariff  Committee  in  regard  to  the  indus- 
try, and  at  that  time  I  outlined  the  great  need  there  was  for  protection  to 
it.  California  has  contributed  practically  75%  of  the  quicksilver  produced 
in  the  United  States  for  many  years.  During  this  year  [1920]  we  have 
seen  property  after  property  closed.  At  the  present  time  there  are  two 
operating  out  of  probably  three  hundred  which  at  one  time  or  another 
have  yielded  quicksilver.  Those  two  are  producing  a  normal  amount  of 
metal.  The  largest  mine,  which  yields  50%  of  the  quicksilver  of  Cali- 
fornia, has  been  closed  and  does  not  produce  any  today. 


THE  AMERICAN  MINING  CONGRESS  97 

Ordinarily,  our  production  in  California  is  around  16,000  flasks.  During 
the  war,  when  there  was  greater  need  for  that  product,  California  was 
able  to  produce  more.  For  this  year,  according  to  estimates  given  me, 
production  will  amount  to  about  10,500  flasks. 

The  price  of  quicksilver  is  something  that  none  of  us  knows  from  day 
to  day;  we  do  not  know  what  is  going  to  happen  to  it.  We  go  along 
quietly  for  a  week  or  two,  or  two  or  three  months,  with  an  apparent  fixed 
price,  when  suddenly  there  will  be  a  drop,  with  a  decline  of  from  $5  to 
$20.  That  is  not  a  condition  under  which  any  industry  can  progress  or 
develop. 

It  has  been  said  by  some  Government  officials  that  there  are  not  any 
great  resources  of  quicksilver  in  California,  but  I  beg  to  differ  from  any 
opinion  of  that  kind.  The  conditions  under  which  the  industry  in  Califor- 
nia, as  far  as  quicksilver  is  concerned,  has  been  developed  are  these:  The 
great  production  in  Europe  is  in  Spain  and  Italy.  They  have  ores  that 
are  of  a  much  higher  grade  than  those  in  California.  In  Spain  it  runs 
from  5  to  10%  mercury;  iy2  to  2%  in  Italy,  I  believe.  In  Calfornia  the 
average  quicksilver  content  is  something  like  0.5%.  There  is  no  question 
that  in  Europe,  where  the  quicksilver  market  has  been  controlled  by  the 
Rothchilds  in  the  past,  and  practically  so  today,  if  they  desired,  there 
could  be  produced  sufficient  metal  to  flood  the  markets  of  the  United 
States  so  that  the  industry  here  would  be  absolutely  frozen,  and  I  do  not 
know  of  any  reason  why  that  has  not  happened  in  the  past;  it  is  a  fact 
that  we  have  been  suffered  to  live.  • 

Cost  of  Producing  Mercury 

At  the  present  time  the  cost  of  producing  quicksilver  in  California  is 
around  $65  per  flask,  exclusive  of  depreciation,  interest,  and  the  like. 
That  is  the  bare  cost  of  production.  Quicksilver  has  been  quoted  at  $80 
for  the  last  two  weeks  [November,  1920],  but  Italian  quicksilver  is  being 
imported  into  the  United  States  at  a  price  lower  than  that,  and  lower  than 
the  producers  of  California,  or  the  rest  of  the  country  can  stand.  It  seems 
to  me  that  if  the  industries  which  consume  quicksilver  are  to  have  a 
dependable  production,  and  have  a  condition  under  which  the  resources 
can  be  developed,  there  must  be  a  tariff  placed  upon  imported  quicksilver 
as  well  as  upon  the  products  manufactured  from  quicksilver  which  are 
imported  into  this  country.  I  believe  that  any  efforts  made  by  the 
American  Mining  Congress  towards  placing  a  tariff  upon  imported  mer- 
cury and  upon  products  therefrom  will  at  least  tend  toward  the  establish- 
ment of  a  protection  for  the  United  States. 

I  trust  that  the  efforts  of  the  American  Mining  Congress  will  be  success- 
ful in  getting  relief  for  the  quicksilver  mining  industry.  (Applause.) 

CHAIRMAN  FRANKLIN:  Before  we  adjourn  I  would  suggest  that  it 
is  necessary  to  appoint  a  committee  on  resolutions. 

MR.  DAVIS:  Mr.  Chairman,  pursuant  to  your  suggestion,  I  move  that 
a  committee  of  three  be  appointed  to  draft  suitable  resolutions  to  present 


98  REPORT  OF  PROCEEDINGS 

to  the  Resolutions  Committee  expressing  the  idea  of  this  conference  with 
reference  to  tariff  legislation  in  Congress. 

A  MEMBER:     I  second  the  motion. 

CHAIRMAN  FRANKLIN:  It  has  been  regularly  moved  and  seconded 
that  a  committee  of  three  be  appointed — how? 

MR.  DAVIS:     By  the  Chair. 

CHAIRMAN  FRANKLIN  (continuing):  by  the  chair  to  draft  suitable 
resolutions,  comprising  the  sentiment  of  this  Convention,  to  present  to 
the  Resolutions  Committee.  (The  motion  was  carried.)  I  will  appoint 
Judge  John  F.  Davis  of  California,  Mr.  Hawk  of  Oregon,  and  Mr.  Mac- 
Kenzie  of  Utah. 

The  session  then  adjourned. 


THE  AMERICAN  MINING  CONGRESS  99 

MINE  TAX  CONFERENCE 

American  Mining  Congress 
TUESDAY,  NOVEMBER  16,  11  A.  M. 

Mr.  George  E.  Holmes,  acting  chairman. 

CHAIRMAN  HOLMES:  In  the  absence  of  Mr.  Paul  Armitage,  who 
has  been  delayed,  I  have  been  asked  to  take  the  chair  to  make  the  intro- 
ductory remarks  and  report  what  your  Committee  on  Taxation  has  done, 
and  what  it  proposes  for  the  attention  of  this  meeting.  The  Conference 
on  Taxation  will  hold  a  series  of  three  or  more  meetings  to  discuss  vari- 
ous phases  of  the  question.  They  will  be  roughly  divided  into  three 
groups: 

(1)  What   shall   we   do   with   respect  to   back  taxes — taxes    for  past 
years  that  still  remain  uncollected? 

(2)  What    shall   we   do   to    improve   the    administration    of    current 
taxes — tax  laws  for  the  current  years? 

(3)  What  shall  we  do  with  respect  to  new  tax  laws — what  program 
of  taxation  should  the  American  Mining  Congress  advocate? 

The  Tax  Problems 

The  last  is  an  extremely  important  subject  on  which  there  has  been 
a  great  deal  of  thought  throughout  the  country.  The  Congress,  in  con- 
nection with  other  bodies,  initiated  a  movement  last  spring  that  resulted 
in  the  formation  of  the  so-called  Allied  Tax  Committee,  which  has  con- 
sidered the  subject  of  future  revenue  legislation  for  the  past  seven  or 
eight  months  and  recently  prepared  a  tentative  report.  Mr.  Armitage 
and  Mr.  Allen  are  members  of  this  Allied  Tax  Committee,  and  have  done 
a  great  deal  of  work  in  that  connection. 

This  morning  we  present  for  your  attention  a  report  of  the  Tax  Com- 
mittee of  the  American  Mining  Congress  relating  to  the  collection  of 
back  taxes.  I  will  read  this  report,  after  which  the  meeting  will  be 
thrown  open  for  a  round  table  discussion  of  the  merits  and  demerits  of 
the  plan. 

Report  of  the  Committee  on  Taxation — American  Mining  Congress 

Your  Committee  is  of  the  opinion  that  one  of  the  most  important 
tasks  before  the  Government  in  the  matter  of  taxation — if  not  indeed 
one  of  the  most  important  tasks  of  any  character — is  that  of  finally 
and  definitely  settling  and  disposing  of  the  uncertain  liability  which 
hangs  over  thousands  of  taxpayers  with  respect  to  the  amount  of 
income  and  excess-profits  taxes  they  will  ultimately  be  called  upon 
to  pay  for  the  period  in  which  the  excess-profits  tax  has  been  in  force, 
namely  1917-1920,  inclusive. 

The  excess-profits  tax,  as  we  all  know,  is  a  most  complicated  and 
difficult  form  of  taxation.  We  tender  our  profound  respect  tc  the 


100  REPORT  OF  PROCEEDINGS 

Bureau  of  Internal  Revenue,  and  the  many  able  and  patriotic  citizens 
who  temporarily  joined  its  forces  during  the  war,  for  the  work  that 
that  has  been  done,  but  we  are  deeply  impressed  with  the  fact  that 
the  task  of  gathering  the  war  revenue  is  far  from  accomplished. 

During  the  war,  a  large  group  of  public-spirited  men,  actuated 
primarily  by  a  desire  to  aid  in  meeting  the  crisis,  and  disregarding 
the  compensation  they  received,  voluntarily  took  up  the  burden  of 
assisting  in  the  administration  of  the  law.  But  as  soon  as  the 
national  emergency  was  at  an  end,  these  men  returned  to  private  life. 
The  Commissioner  of  Internal  Revenue  was  left  with  a  partly-com- 
pleted task,  and  was  in  the  position  of  carrying  on  the  work  with  a 
greatly  reduced  staff  of  experienced  assistants.  He  was  called  upon 
to  renew  his  force  with  inexperienced  men,  attracted  to  the  work 
primarily  by  the  compensation  offered  for  their  services.  It  is 
notorious  that  Government  salaries  are  grossly  inadequate  in  many 
cases.  We  believe  this  to  be  true  to  a  great  degree  within  the  Bu- 
reau of  Internal  Revenue,  and  this  is  one  reason  why  men  of  the 
calibre  of  those  who  surrounded  the  Commissioner  during  the  war 
period  are  now  seldom  to  be  found  on  the  Government's  side  of  the 
table  when  tax  cases  come  to  be  settled. 

[CHAIRMAN  HOLMES:  I  want  to  interject  a  brief  statement  here, 
which  is,  that  of  all  the  various  divisions  of  the  Bureau  of  Internal 
Revenue,  I  do  not  believe  that  there  is  a  single  division  which  has  in  it 
today  the  able  men  that  the  Sub-division  of  Natural  Resources  has. 
These  men — engineers,  trained  and  intelligent — meet  the  task  in  the 
spirit  that  all  of  the  departments  and  sub-divisions  of  the  departments 
met  the  task  during  war  times;  but  in  practically  all,  if  not  all,  of  the 
other  sub-divisions  of  the  Bureau  of  Internal  Revenue,  there  is  a  tend- 
ency to  fall  back  into  the  routine,  red-tape  method  of  handling  cases — a 
tendency  to  postpone  decisions,  a  tendency  to  "pass  the  buck"  that 
greatly  militates  against  the  settlement  of  back  taxes.  There  are  a  large 
number  of  cases  for  1917  still  unsettled,  and  there  seems  to  be  little  like- 
lihood they  ever  will  be  settled  unless  we  adopt  drastic  means  to  settle 
them.] 

The  numerous  changes  in  the  personnel  of  the  Bureau  has  in- 
creased the  delay-  and  uncertainty  in  the  settlement  of  back  taxes, 
and  there  is  now  no  prospect  of  the  excess-profits  taxes  being  finally 
settled  within  any  reasonable  period,  unless  new  and  radical  steps 
are  taken. 

Many  large  taxpayers,  employing  expert  talent  to  present  and 
argue  their  cases,  have  been  able  to  settle  their  taxes  with  the  De- 
partment for  the  war  period  and  up  to  the  present  date.  But  thou- 
sands of  smaller  taxpayers  find  their  cases  still  unsettled,  even  so 
far  back  as  1917,  and  are  either  worrying  over  the  amount  of  addi- 
tional taxes  they  may  be  called  upon  to  pay,  or  are  blissfully  un- 
conscious of  the  claim  which  the  Government  may  at  any  moment 
assert  against  them. 

Until  Taxes  are  Settled  Business  Hesitates 

By  reason  of  the  large  amounts  involved  in  excess-profits  taxes, 
this  situation  leads,  on  the  one  hand,  to-  extreme  uncertainty  in  busi- 
ness, to  hesitation  in  entering  upon  new  transactions,  and  to  a  tend- 
ency towards  conservation  of  capital  in  the  form  of  cash  or  securi- 
ties. On  the  other  hand,  many  taxpayers  are  now  risking  their 
funds  in  new  enterprises,  and  when  the  Government  eventually 


THE  AMERICAN,  MINING  CONGRESS.  101 

comes  to  assert  its  claim  to  a  part  of  those  funds  it  may  find  that 
they  have  been  dissipated  or  invested  in  such  assets  that  liquidation 
cannot  take  place  except  at  a  great  loss  to  the  taxpayer.  The  difficulty 
of  borrowing  money  to  pay  taxes  is  now  extremely  great,  and,  no 
doubt,  will  increase  as  time  goes  on. 

Many  taxpayers  have  come  forward  with  the  facts  pertaining  to 
their  cases,  and  have  settled  the  matter  of  their  tax  liability  for  the 
war  period.  Many  others  have  held  back,  postponing  and  delaying 
consideration  of  their  cases  as  long  as  possible.  Your  Committee 
believes  that  we  must  see  to  it  that  these  delinquent  citizens  be  made 
to  bear  their  just  share  of  the  war  tax  burden  without  further  quib- 
ble and  delay.  Still  other  taxpayers  have,  by  reason  of  circumstances 
surrounding  their  particular  cases,  been  compelled  to  pay  an  unjust 
amount  of  war  taxes  and  they  should  receive  prompt  and  effective 
relief.  Some  cases  are  indeed  impossible  of  settlement  within  the 
strict  terms  of  the  statute.  We  may  as  well  recognise  this  fact  and 
proceed  directly  to  a  compromise  settlement  of  such  cases  on  terms 
fair  to  the  taxpayer  and  Government  alike.  These  considerations 
and  in  fact  every  consideration  of  both  Government  and  taxpayer, 
points  to  the  absolute  necessity  of  cleaning  up  the  situation  which 
now  confronts  the  business  world  and  hampers  the  Bureau  of  Inter- 
nal Revenue  in  the  difficult  task  of  carrying  on  its  current  business 
in  a  post-war  period  that  has  many  problems  of  its  own. 

Cleaning  up  the  back  taxes  for  the  years  in  which  the  excess- 
profits  tax  was  in  force)  is  an  extraordinary  and  complex  proposition, 
it  is  analogous  in  some  respects  to  the  necessity  of  clearing  up  the 
multitude  of  claims  against  the  war  and  navy  departments  of  the 
Government,  to  which  Congress  has  given  special  attention.  If 
Congress  has  deemed  it  advisable  to  take  extraordinary  steps  to  set- 
tle claims  of  citizens  'against  the  Government,  why  should  it  not  take 
such  steps  to  dispose  finally  of  the  old  and  indefinite  claims  which 
lie  against  taxpayers  for  the  same  period  and  arising  under  some- 
what similar  conditions?. 

Relief  Under  Act  of  1918 

The  Revenue  Act  of  1918  contains  several  extraordinary  relief 
provisions,  such  as  the  provision  for  inventory  losses,  amortization 
of  war  facilities,  and  the  treatment  of  net  losses  arising  within  the 
period  beginning  November  1,  1918,  and  ending  December  31.  1919. 
These  special  provisions  are  peculiar  during  the  war  period  and  im- 
mediately thereafter.  Their  administration  is  throwing  an  addi- 
tional and  extraordinary  burden  upon  the  Bureau  of  Internal  Reve- 
nue. The  question  arising  in  the  course  of  their  administration,  to- 
gether with  the  difficulties  of  valuation  that  enter  in  the  computa- 
tion of  invested  capital,  require  the  keenest  intellect,  the  soundest 
judgment  and  the  widest  discretion  for  their  proper  solution. 

We  respectfully  submit  that  these  and  the  other  problems  of  our 
extraordinary  war-time  taxation  should  be  solved  with  the  greatest 
diligence,  and  that  this  cannot  be  done  by  leaving  the  matter  to  the 
routine  activities  of  the  Bureau  of  Internal  Revenue,  limited  as  it  is 
in  its  operations  by  strict  statutory  and  departmental  rules  and  pro- 
cedure all  tending  to  delay  and  indecision. 

Proposed  Board  for  Tax  Decisions 

We  propose,  therefore,  that  the  American  Mining  Congress  recom- 
mend to  the  Federal  Congress  the  enactment  of  a  statute  authorizing ' 
the  President  to  appoint,  by  and  with  the  consent  of  the  Senate,  a  bi- 
partisan board  of  10  men,  composed  of  lawyers,  accountants,  engineers, 
and  business  men,  who  will  sit  for  a  period  of  one  year,  to  pass  upon 


102  REPORT  OF  PROCEEDINGS 

and  settle  the  cases  of  taxation  arising  during  or  consequent  upon 
the  war-time  period  of  1917  to  1920,  both  inclusive. 

Such  a  board  might  be  called  special  commissioners  of  income  tax. 
Its  powers  should  be  of  the  broadest  character;  to  summon  witnesses, 
to  compel  the  production  of  books  and  papers,  to  determine  ques- 
tions of  fact  and  law,  and  to  maks  assessments  under  both  the  gen- 
eral terms  of  the  statutes  and  those  special  remedial  provisions  em- 
bodied in  section  210  of  the  Revenue  Act  of  1917  and  sections  327 
and  328  of  the  Revenue  Act  of  1918. 

The  board  should  have  power  to  compromise  taxes  in  cases  where 
the  need  arises,  and  should  be  given  a  power  which  is  not  now 
provided  for  m  our  statutes,  namely  to  postpone  the  payment  of 
taxes  for  reasonable  periods,  or  to  provide  for  their  payment  in  two  or 
more  installments  where  the  board  deems  it  necessary  in  order  to 
prevent  undue  hardship  on  the  taxpayer,  requiring,  of  course,  ade- 
quate security  from  the  taxpayers  to  safeguard  the  interests  of  the 
revenue. 

[CHAIRMAN  HOLMES:  That  is  a  procedure  which  is  followed  in 
Great  Britain  in  connection  with  her  excess-profits  tax.  The  Tax  Bureau 
assesses  a  man  promptly,  his  liability  is  determined,  and  then  the  Com- 
missioners of  Internal  Revenue  give  him  all  the  time  that  is  necessary 
to  get  together  the  funds  with  which  to  pay  his  taxes.  He  is  not  called 
upon  to  pay  them  in  a  single  installment  as  we  were  prior  to  1918,  or  four 
installments  at  specified  dates  as  we  are  now.  If  necessary,  he  may  be 
given  a  period  of  more  than  one  year.] 

There  exist  many  cases  in  which  large  amounts  of  tax  depend  upon 
the  construction  of  an  ambiguous  or  obscure  provision  of  the 
statute  compelling  him,  as  is  necessary  under  the  existing  pro- 
visions of  the  statute,  to  pay  in  the  tax  before  commencing 
suit  to  contest  the  legality  of  the  assessment.  Under  the  un- 
certain conditions  of  the  post-war  period  the  payment  of  large 
sums  of  money  to  the  Government  to  be  held  by  it,  without  paying 
interest,  until  some  doubtful  provision  of  the  statute  can  be  inter- 
preted by  the  courts,  may  spell  ruin  and  disaster  to  the  taxpayer.  It 
may  be  of  small  avail  to  him  that  the  courts  eventually  set  aside  the 
assessment  and  order  the  return  of  his  money.  In  the  meantime 
his  capital  has  been  tied  up  and  unproductive,  his  business  has  suf- 
fered for  lack  of  the  money  which  has  been  held  by  the  Government 
during  a  long  drawn-out  period  of  litigation,  and  the  Government 
has  gained  nothing  for  the  injury  inflicted  upon  the  taxpayer.  Under 
ordinary  circumstances,  the  present  rule  of  paying  the  tax  and  suing 
tc  recover  it  back  is  desirable  and  practical;  but  the  war  period  saw 
taxes  of  such  undreamed  of  magnitude  that  ordinary  rules  must  be 
set  aside  to  meet  extraordinary  conditions.  For  1918,  the  tax  may 
take  as  much  as  80%  of  the  net  income  of  a  corporate  taxpayer.  It 
thereupon  becomes  exceedingly  important  to  determine  the  real  net 
income — a  small  error  in  that  calculation  may  result  in  the  tax 
exceeding  100%  of  the  real  net  income,  and  becoming  in  fact  a  tax 
on  the  capital  of  the  taxpayer.  It  behooves  us,  therefore,  to  not  only 
safeguard  the  interests  of  the  Government,  but  those  of  the  tax- 
payer as  well,  and  this  leads  your  committee  to  recommend  that  the 
board  shall  have  power  to  postpone  the  collection  of  taxes  in  such 
cases  until  after  the  case  has  been  heard  and  determined  by  the 
courts,  adequately  protecting  the  Government  by  requiring  such  bond 
or  other  security  from  the  taxpayer  as  will  assure  the  collection  of 
the  tax  and  interest  upon  final  determination  of  the  tax  liability,  and 
that  the  courts  shall  be  given  authority  to  hear  and  determine  such 
cases. 


THE  AMERICAN  MINING  CONGRESS  103 

Board  Only  Responsible  to  Congress 

Wo  strongly  urge  that  the  board  shall  be  an  independent  body 
separate  and  apart  from  the  Bureau  of  [nternal  Revenue  and  the 
Treasury  Department,  responsible  to  Congress  only.  Free  from  red- 
tape  and  bureaucratic  methods,  the  board  must  act  promptly  and 
decisively  to  settle  the  cases  before  it.  The  procedure  under  which 
it  should  operate  would  be  analogous  to  that  of  an  appellate  body 
to  which  the  taxpayer  could  appeal  from  decisions  of  the  Bureau  of 
Internal  Revenue,  or  to  which  he  could  refer  his  case  in  the  first 
instance  if  the  Bureau  failed  within  a  reasonable  time  to  make  an 
assessment  or  finally  approve  of  his  reports  for  the  years  in  question. 
The  board  should  have  authority  to  remand  the  case  to  the  Bureau  of 
Internal  Revenue,  with  instructions  how  to  close  it,  07*  on  the  other 
hand  to  dispose  of  the  case  summarily  and  determine  the  final  assess- 
ment. 

Appeal  would,  of  course,  lie  from  any  decision  of  the  board  in  the 
District  Courts,  or  the  Court  of  Claims,  as  is  now  the  case  upon  final 
rejection  of  a  claim  for  refund  by  the  Commissioner  of  Internal 
Revenue. 

.  If,  however,  a  determination  and  assessment  is  made  in  the  case 
of  any  taxpayer  and  an  agreement  in  writing  signed  by  the  taxpayer 
and  the  board  shall  be  final  and  conclusive,  then  (except  upon  a 
showing  of  fraud  or  malfeasance,  or  misrepresentation  of  fact  mate- 
rially affecting  the  determination  or  assessment  thus  made)  the 
statute  should  provide  that  the  case  shall  not  be  reopened  or  the 
determination  and  assessment  modified  by  any  officer,  employee  or 
agent  of  the  United  States,  and  no  suit,  action  or  proceeding  to  annul, 
modify  or  set  aside  such  determination  or  assessment  shall  be  enter- 
tained by  any  court  of  the  United  States.  This  provision  (which  is 
now  proposed  in  somewhat  similar  form  in  House  Bill  No.  14198) 
would  enable  the  board  to  settle  expeditiously  cases  on  terms  satis- 
factory to  the  Government  and  the  taxpayer,  and  with  the  assurance 
that  neither  the  Government  nor  the  taxpayer  could  thereafter  at- 
tempt to  re-open  the  assessment.  In  the  opinion  of  your  committee, 
such  provision  is  absolutely  essential  to  the  expeditious  handling 
of  cases  by  the  proposed  board. 

Your  Committee  believes  that  men  of  the  character  and  ability  re- 
quired to  perform  the  important  duties  of  this  board  could  be  fouLd 
if  the  work  would  not  last  for  a  period  of  more  than  a  year  and  the 
compensation  were  commensurate  with  their  ability.  We  therefore 
strongly  urge  that  the  compensation  to  each  member  of  this  board 
should  be  fixed  at  a  sum  not  less  than  $25,000  per  annum.  It  must 
be  borne  in  mind  that  this  board  will  have  an  exceptional  and  ex- 
tremely difficult  task,  to  which  the  very  best  talent  should  be  directed. 
Men  of  the  stamp  required  must  be  paid  at  a  rate  somewhat  approach- 
ing the  current  market  value  of  their  services,  and  that  to  take  less 
able  men  or  to  attempt  to  attract  able  men  by  offering  compensa- 
tion ridiculously  below  the  value  of  their  services  would  be  a  short- 
sighted policy  certain  to  doom  the  whole  plan  a  failure. 

Salaries  of  Members  to  be  High 

Your  Committee  suggests  a  large  board,  one  composed  of  ten  mem- 
bers, since  the  work  it  will  perform  may  be  divided  into  three  or 
four  general  classes.  The  full  board  should  not  be  required  to  sit  in 
every  case;  three  members  should  constitute  a  sufficient  quorum  to 
hear  and  determine  the  case,  although  more  members  may  sit  on 
complicated  or  important  cases.  The  decision  in  each  case  should 
be  subject  to  the  written  approval  of  a  majority  of  the  board,  includ- 
ing those  members  who  sat  on  the  case. 


104  REPORT  OF  PROCEEDINGS 

A  sufficient  appropriation  should  be  made  to  enable  the  board  to 
employ  an  adequate  staff  of  clerks  and  assistants.  In  addition,  it 
should  have  power  to  call  upon  the  Bureau  of  Internal  Revenue  for 
such  auditing  or  other  assistance  as  it  might  require  in  any  particu- 
lar case. 

We  believe  the  energetic,  impartial  operation  of  such  a  board, 
clothed  wiih  broad  and  ample  powers,  would  result  in  the  settle- 
ment of  practically  all  the  cases  of  war  taxation  within  a  year,  and 
leave  the  department  free  to  carry  on  its  current  work.  We  do  not 
believe  the  present  system  of  handling  back  taxes  will  ever  accom- 
plish the  final  completion  of  the  work — the  task  is  too  stupendous, 
the  amounts  involved  are  too  great,  the  need  for  sound  judgment  fol- 
lowed by  prompt  and  courageous  action  is  too  apparent  to  be  handled 
by  ordinary  means  of  tax  administration. 

(Signed)     PAUL  ARMITAGE,  chairman. 

CHAIRMAN  HOLMES:  This  plan  is  not  entirely  new.  A  board  of 
this  character  has  been  discussed  for  at  least  two  years.  That  is,  a 
board  intermediate  between  the  Commissioner  and  the  courts  to  which 
the  taxpayer  could  appeal,  or  the  Department  could  appeal,  and  which 
would  act  somewhat  as  a  board  of  referees.  Your  Committee  feels  that 
we  have  undertaken  the  task  of  collecting  this  tremendous  revenue  more 
in  the  spirit  of  solving  a  difficult  scientific  or  mathematical  problem  than 
in  the  spirit  with  which,  for  instance,  the  British  have  approached  it — 
that  of  approximating  as  closely  as  possible  what  tax  burden  the  various 
taxpayers  should  pay  under  the  extraordinary  strain  of  the  war.  We 
have  a  large  organization  in  Washington  and  in  the  field  the  Bureau  of 
Internal  Revenue  consisted  of  approximately  10,000  men  at  the  close  of 

Staff  of  Bureau  of  Internal  Revenue 

the  war.  It  may  have  been  reduced  at  the  present  time.  The  total 
number  of  Internal  Revenue  employees  before  the  war  was  3,000.  We 
have  expanded  the  Bureau  approximately  300%  for  the  purpose  of  col- 
lecting this  extraordinary  revenue.  That  expenditure  has  principally 
been  on  the  employment  of  auditors,  inspectors,  and  clerks;  and  it  has 
been  the  tendency,  both  in  the  field  and  in  Washington,  for  these  audi- 
tors and  clerks  to  pay  more  attention  to  the  strict  and  literal  interpre- 
tation of  the  law  or  the  regulations  than  it  has  been  to  settle  cases 
speedily,  collect  the  revenue,  give  the  Government  the  use  of  the  money, 
and  give  the  taxpayer  the  assurance  that  his  burden  has  been  fixed  for 
the  particular  year  or  years  in  question.  No  other  procedure  could  very 
well  have  been  followed  in  the  Department  under  our  system  of  collect- 
ing revenues.  The  evils  that  have  arisen  therefrom  must  necessarily  fol- 
low from  such  a  system.  And  those  evils  have  been  delay  in  determining 
the  precise  amount  of  the  assessment  in  the  case  of  taxpayers  having 
at  all  complicated  cases.  During  the  war,  an  Advisory  Tax  Board  was 
appointed  by  the  Commissioner,  on  which  Dr.  Adams,  Mr.  Sterrett,  and 
Mr.  R.  C.  Allen,  Mr.  Ralph  Arnold  and  Mr.  Ramstedt  of  this  Mining 
Congress,  and  other  able  men,  took  active  part  in  formulating  regula- 
tions, laying  down  rules  of  procedure  and  handling  the  difficult  cases. 


THE  AMERICAN  MINING  CONGRESS  105 

Sub-Committee's  Powers  Restricted 

That  was  followed  by  a  Committee  on  Appeals  and  Review  which  is 
now  operating  wi'Mn  the  Department.  But  the  difficulty  with  these 
bodies  is  that  they  are  bound  by  certain  strict  statutory  rules  and  certain 
strict  rules  of  piocedure,  certain  regulations  which,  while  they  are 
changed  from  time  to  time,  are  difficult  to  change  because  they  have 
established  precedents.  v*-at  we  need  at  the  present  time  to  cope  with 
this  extraordinary  situation  is  a  board  of  greater  power  than  can  be 
created  under  the  present  law — a  board  with  powers  particularly  to  com- 
promise'or  arbitrarily  fix  rates  in  cases  where  it  is  impossible  to  ascer- 
tain definite  values  or  to  determine  fine  points  of  law  or  accounting. 
Such  a  board  would  have  an  extraordinary  task  before  it,  and  must 
necessarily  adopt  extraordinary  methods  to  handle  the  situation.  It  is 
precisely  what  the  courts  will  have  to  do  eventually  if  these  cases  are 
appealed  to  them,  and  such  a  board,  acting  in  a  judicial  or  semi-judicial 
capacity,  would  relieve  the  courts  of  a  great  deal  of  burden,  would  settle 
cases  most  expeditiously — more  quickly  because  away  from  the  muddle 
in  which  we  find  ourselves  at  the  present  time  on  account  of  war  taxa- 
tion— and  could  start  in  on  the  collection  of  current  revenue  and  keep 
the  business  of  the  Bureau  of  Internal  Revenue  more  nearly  up  to  date. 

I  should  like  very  much  to  have  you  take  up  the  discussion  of  this 
proposal.  (Applause.) 

MR.  RAVANEL  MACBETH:  I  will  state  for  the  information  of  the 
Congress  that  the  tentative  draft  of  the  1918  act  contained  a  provision 
somewhat  similar  to  the  report  made  by  the  Taxation  Committee  of  the 
American  Mining  Congress.  That  provision  was  for  a  board  to  consist,  if 
I  remember  correctly,  of  seven  members,  with  a  salary  of  $9,000  per  annum 
each.  The  objection  was  then  made  on  the  part  of  Congress  as  to  the 
salary  to  be  paid  to  the  members  of  that  board.  I  simply  give  you  this 
as  a  matter  of  information. 

CHAIRMAN  HOLMES:  That  suggestion  went  through  and  is  a  part 
of  the  1918  statute,  if  I  remember  correctly,  and  it  is  under  that  that  the 
Commissioner  has  appointed  this  Committee  on  Appeals  and  Review.  I 
recall  the  argument  on  the  question  of  salary,  and  we  feel  the  question 
of  getting  adequate  salaries  will  be  the  most  difficult  thing  about  this 
proposed  measure. 

MR.  THOMAS  T.  BREWSTER:  Is  it  not  true  that  the  thing  which  ties 
up  all  these  cases  is  the  difficulty  of  determining  values  as  of  March  1, 
1913,  which  serves  as  the  basis  for  depletion  and  depreciation  charges, 
and  also  serves  as  the  basis  of  testing  invested  capital,  because  invested 

Difficulties  of  the  Tax  Problem 

capital  includes  earned  surplus,  the  prime  test  of  which  is  whether  proper 
depreciation  and  depletion  charges  have  been  made?  Not  only  the  diffi- 
culty of  determining  values  as  of  that  date,  but  the  true  value  as  at  any 
time  when  paid  in  for  stock.  How  are  we  going,  at  this  late  date,  to  get 


106  REPORT  OF  PROCEEDINGS 

the  human  mind  in  shape  to  determine  what  the  value  was  of  the  coal 
property  or  a  metal  mine  as  of  March  1,  1913,  especially  when  we  had 
hanging  over  us  that  value  regulation,  which  in  determining  the  value  of  a 
deposit  of  coal,  the  value  in  block  should  be  taken  into  consideration 
without  regard  to  improvements,  developments  or  any  other  attendant 
circumstances?  That  value  regulation  was  the  one  thing,  beyond  any 
thing  else,  which  caused  the  income  taxpayer  to  throw  up  his  hands  in  dis- 
gust. They  got  discouraged  and  they  dropped  their  valuations.  No  one 
anticipated  war,  no  one  anticipated  subsequent  legislation,  but  when  it 
did  come — when  the  war-tax  legislation  came,  it  found  the  operators  of 
wasted  resources  just  as  unprepared  to  meet  the  taxation  problems  as 
the  country  was  unprepared  to  meet  other  war  problems. 

As  I  see  it,  most  of  these  difficulties  in  determining  these  back  taxes, 
and  under  the  present  law,  if  it  continues,  is  to  find  out,  to  determine 
some  yardstick  by  which  we  can  value  those  properties.  The  regulation 
is  very  wide;  as  it  reads,  it  permits  the  adducing  of  any  possible  proof, 
and  yet  I  am  told  when  it  comes  to  adjudication  of  these  cases  in  the 
Department  the  minds  of  the  examiners  are  absolutely  closed.  They 
interpret  the  thing  much  less  liberally  than  they  might  under  the  regula- 
tion. 

Another  point:  In  the  many  conferences  that  we  have  had  regarding 
this  matter,  we  had  a  three-day  conference  last  winter  in  Washington, 
and  it  was  clearly  pointed  out  that  one  of  the  great  embarrassments  was 
the  absolute  inability  or  unwillingness  of  the  taxpayer  to  come  with  a 
clean  statement  of  convincing  fact.  Now,  the  taxpayer  has  a  duty  on 
him  to  make  his  case,  and  if  the  taxpayer  does  not  make  his  case,  if  he 
can  not  adduce  the  convincing  proof,  a  board  of  100  men  with  a  salary 
of  $250,000  a  year  apiece  are  not  going  to  clear  up  this  situation.  It  is 
true  we  must  have  the  court,  but  the  taxpayer  must  come  into  court,  and 
with  clean  hands.  (Applause.) 

CHAIRMAN  HOLMES:  I  think  Mr.  Brewster's  remarks  are  very  per- 
tinent. Not  only  is  the  question  of  value  for  the  purpose  of  depreciation 
and  depletion  necessary,  but  the  question  of  value  as  of  the  date  of 
acquisition,  which  may  be  away  behind  March  1,  1913,  is  necessary  for 
determination  of  invested  capital.  It  is  that  thing  which  makes  the 
excess-profits  tax  so  difficult  to  administer.  I  think  perhaps  no  one  can 
speak  more  authoritatively  on  the  question  of  valuation  and  the  difficul- 
ties of  valuation  than  Mr.  Dick,  head  of  the  Sub-division  of  Natural  Re- 
sources in  the  Bureau  of  Internal  Revenue.  We  should  like  to  hear  from 
Mr.  Dick  if  he  has  any  remarks  to  make  in  this  connection. 

MR.  J.  C.  DICK:  Mr.  Chairman  and  gentlemen:  I  was  asked  to  go 
to  Washington  some  17  months  ago  to  assist  in  formulating  methods  by 
which  we  could  value  mines,  especially  metal  mines.  I  am  not  exactly 
on  the  outside  here,  because  I  am  a  member  of  the  Congress,  but  that 
I  may  more  clearly  put  the  thing  before  you,  I  will  read  what  I  have 
to  say.' 

[Mr.  Dick's  paper  will  be  found  on  page  671  of  the  Proceedings.]     • 


THE  AMERICAN  MINING  CONGRESS  107 

CHAIRMAN  HOLMES:  You  have  all  listened  with  great  interest  to 
Mr.  Dick's  statement.  His  remark  about  the  questionnaire  reminds  me 
of  the  old  Chinese  proverb,  "Nothing  is  difficult  to  him  who  knows  how." 
The  questionnaire  might  be  filled  out  in  30  minutes  by  one  who  has 
lived  with  it  30  months  or  more,  but  I  daresay  that  some  of  us  find 
considerable  difficulty  in  filling  it  out. 

The  Sub-division  of  Natural  Resources  has  done  and  is  doing  splendid 
work  along  the  line  of  valuation.  It  meets  only  one  of  the  difficulties  in 
settling  the  tax  question,  and  there  are  many  other  questions  raised  in 
accounting,  many  questions  of  law. 

Time  Needed  to  Clear  Back  Taxes 

Mr.  Brewster  made  the  remark,  how  are  we  going  to  clean  up  this  thing 
even  with  a  committee  of  100  men  as  long  as  the  valuation  is  so  difficult. 
My  answer  to  that  would  be  that  if  the  excess-profits  tax  is  going  to  be 
eliminated,  as  appears  very  likely  at  the  present  time,  or  at  least  greatly 
modified,  and  we  need  not  necessarily  establish  values  as  a  precedent  for 
all  time  to  come,  our  principal  purpose,  then,  is  to  determine  the  tax 
liability  of  the  taxpayer  during  the  war  period.  We  can  reach  a  more 
approximate  valuation  than  is  necessary  under  the  present  system.  We 
can,  in  a  measure,  look  at  the  result  we  want  to  achieve  and  use  that  as 
a  check  on  the  valuation.  In  other  words,  is  A,  on  the  basis  he  proposes, 
paying  his  fair  amount  of  tax,  as  compared  with  his  competitors  B,  C, 
and  D?  We  have  enough  valuations  on  sound  basis  to  give  us  a  com- 
parison. The  whole  difficulty  is  to  get  men  who  will  and  who  can  select 
the  proper  comparatives  to  determine  what  shall  be  paid  by  those  who 
have  not  yet  settled  their  tax  cases  in  the  Department.  The  thing  that 
impressed  your  Committee  most  of  all  was  that,  working  as  the  Depart- 
ment is,  hard  as  it  is,  with  as  large  a  force  as  it  has,  it  is  not  keeping 
pace  with  the  constant  number  of  new  cases  coming  in.  If  we  are  not 
correct  in  that  assumption  we  should  like  to  be  corrected.  What  are 
we  going  to  do  with  these  cases  constantly  accumulating  in  the  back? 
I  would  like  to  have  any  and  all  sorts  of  criticism  directed  against  this 
proposal.  That  is  the  purpose  for  which  it  is  presented  to  this  meeting. 
Has  anyone  anything  he  wishes  to  say? 

MR.  WILLIAM  B.  GOWER:  One  feature  of  this  taxation  strikes  me 
in  what  has  been  said,  that  is  as  to  the  necessity  of  creating  a  new 
appeal  body.  I  think  that  where  you  propose  a  new  body,  supplanting 
as  it  would  a  present  body,  you  must  show  more  clearly  than  you  have 
shown  in  your  report  the  reasons  why  they  are  to  supplant  this  body. 

Another  Board  Might  not  Expedite  Matters 

I  do  not  believe  that  you,  in  saying  that  the  accumulation  of  cases  is 
your  governing  reason,  give  a  sufficient  reason.  We  will  admit  that  there 
may  be  an  accumulation  of  cases,  but  have  we  any  statistics  on  that,  are 
we  sure  of  that?  I  am  by  no  means  sure  that,  even  if  you  appoint 
another  body  of  eight  or  nine  members  that  you  will  expedite  the  set- 
tlement of  these  cases.  What  can  such  a  body  of  men  do  to  relieve  the 


108  REPORT  OF  PROCEEDINGS 

congestion,  if  there  is  congestion,  in  that  Department?  You  must  find 
deeper  reasons,  and  that  brings  me  to  one  that  has  not  been  touched  on  in 
your  report,  which  seems  to  be  something  that  is  blocking  the  expedition 
of  cases  in  Washington,  if  they  are  being  blocked,  as  we  think  they  are. 
We  all  know  that  this  law  of  1917  and  1918  is  complex.  We  also  know 
that  it  is  permeated  all  through,  not  with  common-sense  ideas  and 
present-day  value  ideas,  but  with  a  lot  of  accounting  ideas.  We  seem 
to  forget,  a  good  many  of  us  have  forgotten,  that  these  accounting  ideas 
which  saturate  both  of  those  laws,  are  based  on  a  fixed  science;  that  all 
these  questions  can  be  determined,  these  accounting  questions  can  be 
determined  by  looking  up  the  practice  in  accounting  and  looking  up  the 
text  books,  or  some  other  way.  To  illustrate  what  I  mean,  you  will  find 
that  the  Department  a  short  time  ago,  in  talking  about  what  was  meant 
by  various  earned  surplus  and  undivided  profits  in  the  tax  law,  very 
blithely  said  it  included  the  entire  body  of  principles  of  accounting  rela- 
tive to  the  determination  of  surplus.  That  is  what  we  would  call  a  very 
large  audit.  If  there  is  any  man  living  who  can  tell  me  what  comprises  the 
entire  body  of  principles  of  accounting  relative  to  the  determination  of  sur- 
plus I  would  like  to  hear  it,  because  nothing  has  been  more  disputed  in  ac- 
counting than  that  very  question.  There  is  more  uncertainty,  and  there  are 
more  divergent  customs  and  methods— far  more  uncertainties  than  in  law, 
although  I  do  not  pretend  to  speak  from  the  standpoint  of  the  law.  I 
am  not  a  lawyer,  but  I  judge  there  are  a  lot  of  uncertainties  in  law,  and 
in  accounting  we  have  multitudes  of  them.  What  happened  in  1917? 

What  Happened  in  1917 

They  appointed  a  board  of  tax  advisers  on  which  there  was  a  certain 
element  of  accounting  experts  represented,  notably  Mr.  Sterrett  of  the 
firm  of  Price,  Waterhouse  &  Co.  What  did  these  gentlement  do  when  they 
came  face  to  face  with  the  uncertainties  that  they  had  to  solve  so  this 
tax  law  might  proceed?  They  settled  them  in  their  own  way;  they  had 
to  settle  them.  This  tax  law  had  to  proceed.  Mr.  Dick  now  tells  us 
that  we  have  Regulations  45  as  the  primary,  the  best  accredited  course  in 
the  administration  of  that  law.  Now,  Regulations  45  is  saturated  with 
accounting  ideas,  but  do  you  believe  that  those  accounting  ideas 
are  accepted  by  the  whole  body  of  accountants?  Not  by  any  means. 
They  represent  the  solution  that  Mr.  Sterrett  and  his  associates 
were  obliged  to  make  at  that  time.  Here  was  an  uncertain  ques- 
tion they  had  to  settle.  I  might  mention  one  point:  When  they  had  be- 
fore them  the  very  difficult  problems  of  inventory  valuation  of  the  entire 
country,  what  did  they  do?  Put  out  one  fixed  basis  of  inventory  valua- 
tion, cost,  or  cost  or  market,  whichever  is  the  lower.  Ever  since  that 
they  have  been  changing,  whittling,  and  messing  around,  getting  away 
from  this  very  thing  the  gentlemen  settled  in  the  Regulations.  Now, 
what  seems  to  me  is  blocking  today,  if  there  is  a  blockade  in  the  income- 
tax  unit,  is  that  the  body  of  men  you  have  referred  to  in  the  paper  as 
experts,  and  who  were  experts,  have  passed  away  from  the  life  of  the 
Department  and  have  been  succeeded  by  others,  and  the  Regulations 


THE  AMERICAN  MINING  CONGRESS  109 

which  this  body  of  1917  drew,  so  far  as  accounting  is  concerned,  stiffened 
into  these  regulations  like  a  dead  hand  on  a  bolt.  One  of  us  will  go 
down  and  say  that  general  rule  is  not  applicable  to  this  industry,  or  to 
that  industry,  yet  these  gentlemen  feel  a  reluctance  to  touch  them.  I 
do  not  say  they  fear  responsibility,  but  they  are  hypnotized  by  the  writ- 
ten word  which  was  put  out  in  1917  by  that  first  board.  Now  if  the 
body  you  propose  will  do  nothing  else  than  get  away  from  the  hypnotic 
influence  of  the  accounting  ideas  that  were  embodied  in  Regulations 
45,  and  which  are  disputed  by  thousands  of  accountants  today,  if  it  does 
nothing  else,  it  will  perform  something;'  if  not,  it  is  to  the  committee 
on  appeals  we  have  got  to  look  for  a  better  interpretation  of  what  was 
done  in  1917  so  they  will  get  away  from  thinking  that  the  last  word  was 
said  by  the  advisory  board  in  1917  on  accounting  subjects.  (Applause.) 

MR.  FRED  SNYDER:  (Representing  fee-owners,  and  especially  fee- 
owners  who  made  leases  of  their  properties  prior  to  March  1,  1913.) 
Right  along  the  line  made  by  Mr.  Brewster  I  will  state  my  reason  for 
supporting  this  Committee's  report.  Speaking  for  mines  owned  largely 
by  private  ownership  prior  to  March  1,  1913,  and  most  of  which  are 

How  Leases  are  Affected 

leased  on  mining  leases  prior  to  that  date,  and  running  back  some  12  or 
15  years  prior  to  that,  these  mining  leases  run  usually  for  50  years.  The 
time  which  they  run,  when  they  were  made,  so  far  as  the  fee-owner  was 
concerned,  was  an  inconsiderable  problem.  ^  He  was  willing  to  give  a 
100  years  if  it  had  been  asked.  Why?  Because,  he  said,  you  will  obligate 
yourselves  to  take  out  50,000  or  100,000  tons  per  year.  If  you  fail  to 
take  it  out,  you  will  pay  for  it  at  the  rate  of  the  royalty  specified — 15,  20, 
or  25  cents  a  ton,  with  the  right  in  any  subsequent  years  to  apply  that 
money  you  have  paid  thus  in  advance  on  ore  which  you  might  take  out 
subsequently.  So,  you  see,  that  feature  of  time  in  a  lease  was  immaterial 
when  it  was  put  in  there.  It  was  not  determined  at  that  time  when  that 
ore  might  come  out,  nor  was  it  known  in  many  cases  at  that  time  how 
much  more  ore  was  in  the  property.  Now,  you  come  to  March  1,  1913, 
and  this  large  number  of  fee-owners,  many  of  whom  had  a  meeting  be- 
fore I  came  and  instructed  me  to  bring  this  message,  are  asked  to  place  a 
value  upon  their  interests  as  fee-owners — lessors  in  these  leases.  March 
1,  1913,  comes;  we  will  say  there  are  40  years  to  run  on  one  of  these 
leases;  we  will  say  at  that  time  the  engineers  or  owners,  who  in  many 
cases  had  explored  it  before  the  leases  were  made  and  knew  for  them- 
selves how  much  ore  was  in  there — the  engineers  at  that  time  could 
tell  definitely  whether  the  ore  would  have  to  come  out  in  15  or  25  years 
in  order  that  the  lease  paying  the  minmium  would  recoup  the  owner  for 
his  money — that  fee-owner,  in  that  position  coming  before  the  Depart- 
ment is  not  permitted  now  to  show  the  actual  exhaustion  period  of 
March  1,  1913,  but  his  property  must  have  a  depletable  value  based  on 
the  remaining  part  of  the  lease — 30  or  40  years.  We  protest  against 
that,  and  we  could  meet  with  gentlemen  in  Washington,  we  could  meet 
with  engineers  with  affidavits,  we  could  show  that  this  or  that  property 


110  REPORT  OF  PROCEEDINGS 

on  March  1,  1913,  although  not  actually  opened  at  that  time  with  an  out- 
put which  would  show  it  would  terminate  in  15  or  20  years,  we  could 

Calculate  Depletion  on  the  Exhaustion  Period 

show  that  fact  must  happen.  Therefore,  we  ask  that  in  calculating  the 
depletable  value  for  any  interest  we  have  the  right  to  use  as  one  of  the 
factors,  not  the  unexpired  term  of  that  lease,  but  the  actual  exhaustion 
period  of  that  property.  If  they  have  not  the  discretion  to  solve  a  ques- 
tion of  that  kind,  involving  so  many  interests  in  Minnesota,  their  solu- 
tion of  which  would  go  so  far  to  do  away  with  a  lot  of  this  congestion, 
I  think  we  ought  to  have  a  board  of  this  kind  with  discretion  before 
whom  we  might  get  relief  in  such  cases.  (Applause.) 

CHAIRMAN  HOLMES:  We  have  with  us  Mr.  Robert  N.  Miller,  for- 
merly Solicitor  of  Internal  Revenue.  We  should  like  very  much  to 
hear  from  him  in  this  connection. 

MR.  ROBERT  N.  MILLER:  Gentlemen,  I  have  been  much  interested 
indeed  in  what  has  been  said,  and  there  has  not,,  to  my  mind,  and  in 
my  judgment,  been  a  single  word  said  that  did  not  have  truth  in  it.  That 
is  what  is  characteristic  of  this  tremendous  problem.  This  tax  problem 
is  as  big  as  the  United  States,  and  as  full  of  difficulties,  and  you  can  hear 
weeks  of  discussion  about  it  and  still  not  run  out  of  the  things  we  have 
got  to  consider  when  we  are  really  deciding  the  question.  Now,  this 
body  has  a  better  right  maybe,  certainly  as  good  a  right,  to  say  some- 
thing definite  and  forceful  "on  this  subject  as  anybody  in  the  United 
States.  This  is  the  most  hazardous  business  in  the  United  States,  and 
in  spite  of  the  hazards,  not  only  of  what  is  unknown  in  the  ground,  but 
those  that  are  involved  in  trusting  things  to  the  personality  of  managers, 
this  business  has  managed  to  pay  practically  10%  of  the  taxes  paid  by 
corporations.  So  this  body  has  a  right  to  speak  definitely  as  to  what 
ought  to  be  done. 

Correct  and  Incorrect  Filing  of  Returns 

I  am  not  going  to  speak  very  long  now,  but  this  I  would  like  to  sug- 
gest: I  had  not  seen  until  I  got  here  just  the  way  in  which  this  resolu- 
tion is  phrased.  To  me,  who  went  into  the  Department  just  about  when 
the  first  returns  were  being  filed  under  the  law  of  1917  and  stayed  there 
for  nearly  two  years,  it  is  now  absolutely  plain  that  we  have  reached  a 
point  where  the  disadvantages  of  final  and  quick  judgment  (and  they  do 
exist)  are  more  than  overborne  by  the  advantages  of  getting  this  thing 
finished  and  done.  Of  course  we  all  want  to  do  things  absolutely  right, 
and  of  course  we  realize  the  necessity  of  following  principle,  but  we  are 
in  a  situation  here  that  does  absolutely  require  the  cutting  of  a  knot,  and 
I  believe  it  is  very  important  to  consider  what  has  been  proposed  here. 
It  is  important  not  only  from  the  standpoint  of  the  taxpayer  individually, 
but  also  from  the  standpoint  of  the  taxpayer  as  a  part  of  the  Federal 
Government,  because  the  Government  side  of  the  problem  is  our  problem 
too.  There  are  men  who  did  not  file  their  1917  returns  correctly,  but 


THE  AMERICAN  MINING  CONGRESS  111 

there  are  some  who  came  pretty  near  filing  them  so.  To  settle  them  just 
as  filed  is  an  injustice  to  the  fellow  who  filed  them  right.  There  are 
some  people  who  ought  to  pay  more  taxes  in  justice  to  those  who  have 
paid  the  right  amount,  and  the  time  is  passing.  In  a  few  months  the 
Government  will  be  barred  as  to  a  great  many  1917  taxes,  so  that  this 
relief,  some  kind  of  sudden  relief,  is  just  as  good  for  the  Department  and 
for  our  own  Government,  which  belongs  to  us,  as  it  is  for  the  taxpayer. 

One  other  phase  suggests  itself:  Even  if  we  get  a  high-grade  board  as 
has  been  suggested — an  appellate  board — the  successful  functioning  of 
that  board  of  ten  men,  even  if  it  had  500  assistants — I  know  by  real  con- 
tact with  these  millions  of  returns — I  say  the  successful  functioning  of 
that  board  depends  absolutely  on  the  successful  functioning  of  the  Inter- 
nal Revenue  Bureau  too,  because  that  board  is  not  going  to  be  able  to 
dispose  of  millions  of  disputed  cases.  For  that  board  to  function  well, 
the  Bureau  must  examine  millions  of  returns  before  any  of  them  get  to 
that  board,  so  that  the  number  of  questions  does  not  exceed  the  board's 
capacity.  So  that,  however  good  this  board  may  be,  we  ought  at  the 
same  time,  I  think,  all  of  us,  to  figure  on  giving  the  Department  what  it 
has  never  had  yet,  and  that  is  money  enough  to  hold  the  good  men  that 
it  has  got  and  to  get  some  more.  (Applause.)  I  could  give  you  so  many 
examples  of  men  who  have  grown  by  contact  with  the  thousand  cases, 

Loss  of  Government  Employes 

and  I  tell  you  contact  with  a  lot  of  cases  broadens  those  people  rather 
than  makes  them  narrow.  The  Government,  when  it  lets  a  good  man  go, 
lets  something  go  that  is  worth  a  lot  of  money.  I  often  think  when  a 
big  fellow  who  has  learned  broadness  by  contact  with  taxpayers  who  are 
the  victims  of  peculiarities  in  the  law  and  who  sees,  as  Mr.  Gower  says, 
that  there  is  no  little,  narrow  answer  to  each  one  of  these  questions,  after 
you  have  him  educated  to  that  point,  why,  of  course,  somebody  pays  him 
three  or  four  times  what  he  is  getting  and  the  Government  loses  him — 
I  think  of  him  as  a  great,  big  tree  that  takes  a  generation  to  grow  and 
after  a  while  is  cut  down.  To  replace  it  you  must  plant  seed,  and  it  is  a 
long  time  before  it  grows  to  useful  size.  It  is  of  enormous  importance,  not 
only  to  have  a  great  group  of  men  who  can  take  and  decide  some  big 
principles,  but  to  have  many  competent  men  working  hard  down  below 
among  those  millions  of  cases — each  one  a  most  important  question  to  the 
fellow  whose  case  it  is.  That  is  a  necessity,  and  right  down  there  in  the 
Bureau  now  there  are  splendid  men  in  the  Department  on  the  point  of 
going.  There  is  a  spirit  of  unrest,  because  so  many  people  are  going  out 
and  getting  three  or  four  times  what  they  can  make  in  the  Department. 
It  is  lunch  time.  Thank  you.  (Applause). 

CHAIRMAN  HOLMES:  Unless  someone  wishes  to  speak  at  the  present 
time,  this  meeting  will  stand  adjourned  until  3  o'clock,  at  which  time  we 
hope  that  we  may  hear  some  more  from  Mr.  Miller  whose  valued  remarks 
come  from  a  great  fund  of  experience.  Mr.  Miller  was  through  the  mill 


112  REPORT  OF  PROCEEDINGS 

during  the  war  and  knows  what  this  situation  in  the  Treasury  Depart- 
ment means  from  every  angle. 

The  meeting  stands  adjourned  until  three,  and  we  hope  members  will 
be  ready  with  their  criticisms  at  that  time. 


AFTERNOON  SESSION,  3  P.  M.,  NOVEMBER  16,  1920 

CHAIRMAN  HOLMES:  We  concluded  the  session  this  morning  with 
some  remarks  by  Mr.  Miller,  and  I  will  request  him  to  continue  for  a 
short  time  at  the  opening  of  this  session. 

MR.  MILLER:  There  is  too  much  to  be  done  this  afternoon  to  make 
it  fair  for  me  to  do  more  than  just  finish  what  I  started  before  lunch. 
In  the  first  place  what  seems  to  me  clear,  is  that  there  is  an  immediate 
necessity  of  doing  something.  The  war  taxes  must  by  some  means  or 
other  be  determined  soon.  Not  to  determine  them  soon,  but  to  put  them 
off  a  long  time  is  going  to  make  great  and  unnecessary  hardship ;  we  have 
got  to  do  something  right  away.  I  confess  I  am  still  considering  the 
problem  as  to  just  where  this  decisive  action  should  come  in.  It  is  a  big 
question,  but  I  submit  for  your  consideration  this  thing  that  I  believe  is 
very  important:  Wherever  this  body,  this  determining  body,  is  put  in 
use,  in  the  Treasury  or  outside  of  it,  its  success,  as  I  said  before,  depends 
on  having  a  great  deal  of  work  done  on  the  cases  before  they  are  referred 
to  the  remedial  board,  because  there  are  literally  millions  of  these  returns 
every  year  to  be  audited  and  studied.  And  there  are  two  points,  each  of 
which  has  to  be  cleared  up.  There  is  the  principle  referred  to  as  the  210 
Section  in  the  1917  law  of  327  and  328  Sections  in  the  1918  law;  that  is, 
special  relief  as  to  the  rate  of  tax  people  ought  to  pay  that  relief  cannot 

Determination  of  Net  Income 

be  applied  until  the  net  income  of  a  taxpayer  is  determined;  the  deter- 
mination of  net  income  is  one  of  the  difficult  things  that  would  have  to  be 
decided  and  decided  promptly  by  the  Bureau  before  the  question  was 
really  put  up  to  this  relief  body.  The  determination  of  net  income  is  one 
phase  that  is  still  dragging,  and  I  will  say  dragging  not  because  of  any 
fault  of  the  Department.  Many  people  find  it  hard  to  believe  that  the 
Department  has  done  a  reasonably  good  job,  and  yet  I  honestly  believe  it 
has  done  a  remarkable  job,  and  the  hardship  of  this  tax  on  the  taxpayer 
has  been  due  to  the  difficulty  of  the  problem;  so  that,  to  provide  for  this 
smaller  group  of  highly  paid  men — and  they  have  got  to  be  highly  paid 
men  to  carry  the  responsibility  we  are  asking  them  to  carry — there  must 
be  some  more  money  spent  down  in  the  Department  in  order  to  permit  it 
to  keep  abreast  of  its  responsibilities,  and  get  the  cases  ready  for  final 
action.  About  ten  months,  or  almost  a  year  ago,  the  Consolidated  Returns 
section,  which  handles,  of  course,  the  biggest  business  of  the  country — 
they  have  a  single  return  sometimes  that  involves  a  lot  more  than  100 
active  subsidiaries,  all  of  them  complicated  by  inter-company  relations, 


THE  AMERICAN  MINING  CONGRESS  113 

and  all  in  one  return — they  planned  a  program  to  try  and  finish  the  1917 
returns  by  the  first  of  March,  and  they  found  that  they  would  need  about 
a  thousand  extra  men;  and  that  those  men,  even  though  they  were  men 
of  ability,  at  the  start  would  have  to  study  about  six  months  in  a  regular 
class  before  they  were  very  much  good  to  the  Department.  Now,  that 
plan  was  started  in  the  Department  but  it  was  not  long  before  it  became 
evident  that  it  could  not  be  carried  out,  for  lack  of  funds.  That's  the 
situation  right  this  minute.  They  have  their  plans  to  try  to  develop  new 
men  and  try  to  hold  the  trained  ones,  but  they  have  not  money  enough 
even  to  run  on  the  present  basis.  We  are  all  interested  in  it.  The  fact 
is,  as  we  all  realize  when  we  think  about  it,  the  well-instructed  man  with 
the  background  is  the  only  man  who  has  courage  to  give  away  money  that 
belongs  to  the  taxpayer.  He  realizes  that  some  day  Congress  may  ask 
him,  "What  did  you  give  that  money  away  for?"  The  only  man  who  can 
look  forward  with  confidence  to  that  question  is  he  who  knows  just  why 
he  did  it,  and  the  success  of  the  taxpayer  who  ought  to  have  money  re- 
turned depends  on  having  men  in  office — even  those  somewhat  below  the 
grade  of  this  necessarily  strong  board — that  have  the  nerve  to  say,  "Yes, 
the  taxpayer  ought  to  have  this,  and  I  am  going  to  give  it  to  him."  I 
think  the  prime  need  for  any  great  administrative  job  is  to  have,  long 
before  you  get  to  court,  two  groups  of  people  to  whom  you  can  present 

Where  to  Place  the  Proposed  Board 

your  case:  First,  the  fellow  who  grew  up  with  the  case  on  the  Govern- 
ment side.  Second,  an  appeal  should  be  possible  to  another  administra- 
tive group  that  didn't  grow  up  with  the  case— who,  when  they  see  it,  will 
see  it  as  a  fresh  matter,  free  from  that  the  wholly  unconscious  fixity  of 
impressions  once  formed.  That  is  something  to  be  observed  at  all  costs, 
and  is  one  of  the  great  things  that  is  guaranteed  by  the  kind  of  body  that 
is  here  proposed.  Of  course,  there  are  arguments  for  and  against  putting 
this  adjustment  board  outside  the  Treasury  Department  instead  of  inside 
it.  Right  at  this  moment  my  inclination  is  to  put  it  inside  the  Treasury. 
I  think  this  situation  is  of  the  greatest  importance  and  that  something 
must  be  done  that  will  speed  up  the  processes  of  the  Bureau  in  determin- 
ing net  income,  and  will  also  make  possible  a  final  settlement  and  adjust- 
ment of  war  taxes. 

CHAIRMAN  HOLMES:  I  will  take  this  occasion  to  read  two  letters 
received  from  men  who  have  given  a  great  deal  of  study  to  the  subject  of 
taxation.  One  is  from  Professor  Haig  of  Columbia,  who  recently  spent 
several  months  in  England,  making  a  study  of  the  British  excess-profits 
tax  law,  and  is  about  to  publish  a  report  on  that  subject  for  the  American 
Economic  Association.  The  tentative  report  of  the  committee  was  sub- 
mitted to  him,  and  this  is  his  reply: 


114  REPORT  OF  PROCEEDINGS 

"COLUMBIA  UNIVERSITY, 

IN  THE   CITY  OF  NEW  YORK, 

SCHOOL  OF  BUSINESS. 

"November  10,  1920. 
"Mr.  George  E.  Holmes,  15  William  Street,  New  York,  N.  Y. : 

"MY  DEAR  MR.  HOLMES:  You  were  good  enough  to  send  me  a  prelim- 
inary draft  of  the  report  of  the  Committee  on  Taxation  of  the  American 
Mining  Congress  and  to  ask  me  for  comments  on  the  proposal  it  contains 
from  the  point  of  view  of  British  experience  in  dealing  with  the  problem. 
I  am  very  glad  to  do  this,  for,  in  my  opinion,  we  must  at  once  radically 
improve  our  income  and  profits  tax  administration  if  we  are  to  escape 
very  serious  fiscal  and  economic  consequences.  I  thoroughly  approve  of 
what  the  committee  report  says  of  the  urgency  of  the  situation  and  of 
the  necessity  for  such  action  as  will  result  in  speedily  fixing  the  precise 
liability  of  taxpayers. 

The  British  Tax  System 

"Under  the  British  system  a  condition  like  that  now  confronting  us  is 
quite  impossible.  There  the  accounts  are  carefully  examined,  and  the  tax 
liability  determined  by  a  capable  Government  assessor,  before  the  tax  is 
assessed  or  collected,  and  their  force  of  civil  servants  has  proved  equal 
to  the  task  of  keeping  up  to  date  with  its  work.  They  have  the  fullest 
possible  provision  for  appeals  to  administrative  authorities  and  to  boards 
organized  and  operating  on  the  principle  of  arbitration  by  disinterested 
outsiders.  Our  Civil  Service,  in  spite  of  its  best  efforts,  has  fallen  far 
behind,  and  unless  some  emergency  organization  is  supplied  it  is  difficult 
to  see  how  the  situation  can  be  met.  A  board  of  Special  Commissioners 
of  Income  Tax,  such  as  you  suggest,  would  undoubtedly  command  the 
respect  of  the  taxpayer  and  would  deserve  the  confidence  of  the  Govern- 
ment. Congress  should  not  hesitate  to  vest  such  a  board  with  power  to 
arrive  at  agreements  with  the  taxpayer.  The  interests  of  the  Government 
would  receive  proper  consideration. 

"In  the  case  of  such  taxes  as  the  income  and  profits  tax,  the  liability  of 
the  taxpayer  rests  to  a  very  material  extent  upon  items  which  represent 
mere  estimates  and  valuations.  There  is  a  possibility  of  wide  differences 
of  opinion  between  the  Government  and  the  taxpayer  as  to  the  correctness 
of  these  items  and  there  is  usually  no  absolute  standard  for  determining 
which  view  is  right.  The  only  way  to  settle  the  problem  satisfactorily  is 
for  the  Government  to  establish  somebody  in  whose  intelligence  and  fair- 
ness the  taxpayer  has  confidence,  and  to  give  power  to  this  body  to  make 
decisions  as  their  judgment  may  dictate  after  full  consideration  of  the 
facts.  The  British,  who  have  had  80  years  of  continuous  experience  with 
income  taxation,  fully  appreciate  the  necessity  of  elasticity  in  administra- 
tion and  grant  to  their  local  assessors,  as  well  as  to  their  higher  officials, 
what  seems  to  us  to  be  an  amazingly  large  degree  of  latitude  in  arriving 
at  agreements  and  compromises  with  taxpayers.  It  would  be  foolish  for 
us  at  this  juncture  to  de-centralize  our  system  and  vest  our  local  authori- 
ties with  power  similar  to  that  exercised  by  the  corresponding  British 


THE  AMERICAN  MINING  CONGRESS  115 

official.  Before  we  can  do  that  we  must  build  up  a  force  of  skilled, 
responsible,  and  able  civil  servants  comparable  with  the  British  force. 
But  the  plan  of  the  Committee  calls  for  the  establishment  of  a  board, 
which  unfortunately  must  probably  be  temporary  in  character,  which 
could  safely  be  given  power  to  arrive  at  decisions  and  there  should  be 
no  hesitation  in  granting  them  the  power.  British  experience  plainly 
indicates  that  such  power  must  be  delegated  to  some  factor  in  the  admin- 
istration if  the  income  and  profits  taxes  are  to  be  promptly  and  fairly 
assessed. 

Prompt  Determination  of  Tax  Liability 

"In  a  word,  we  must  arrange  for  a  prompt  and  certain  determination 
of  tax  liability.  To  secure  this  we  must  empower  some  capable,  intelli- 
gent and  trustworthy  authority  to  use  their  judgment  and  discretion  in 
arriving  at  agreements  with  taxpayers.  A  board  such  as  you  propose 
would,  I  believe,  be  a  body  which  could  safely  be  entrusted  with  the 
necessary  authority,  and  the  plan  would  undoubtedly  meet  the  present 
emergency.  A  complete  solution  of  our  general  problem  rests  fundamen- 
tally upon  our  ability  to  build  up  a  capable,  permanent  •  force  of  civil 
servants.  "Faithfully  yours, 

"ROBERT  M.  HAIG." 

CHAIRMAN  HOLMES:  The  other  is  a  letter  from  Professor  Plehn  of 
the  University  of  California,  who  has  also  given  considerable  study  to 
the  subject  of  taxation: 

"UNIVERSITY  OF   CALIFORNIA, 
DEPARTMENT  OF  ECONOMICS. 

"BERKELEY,  November  8,  1920. 
"Mr.  Robert   G.  Wilson,  American  Mining   Congress, 

"Albany  Hotel,  Denver,   Colorado: 

"DEAR  SIR:  Replying  to  yours  of  November  2nd,  I  wish  to  say,  as 
emphatically  as  possible,  that  a  Federal  Board  of  Adjustment,  to  deal 
with  the  accumulated  tax  returns  of  income  and  excess-profits  taxes,  is 
absolutely  necessary. 

Hold-up  of  Tax  Settlements  for  Years 

"With  billions  of  dollars  at  stake,  it  is  worse  than  penny-wise  and 
pound-foolish  to  delay.  It  is  fundamentally  wicked  to  hold  up  tax  settle- 
ments for  five  years.  They  hang  like  a  great  rock  suspended  by  a  thread 
over  the  head  of  industry,  and  threaten  to  fall  when  industry  is  at  its 
weakest.  The  Government  at  present  is  using  pick-and-shovel  methods 
to  work  a  mine  where  blasting  and  steam  shovels  are  needed. 

"If  you  will  look  at  page  3  of  the  Digest  of  Income  Tax  Rulings  No.  10, 
June,  1920,  you  will  see  that  there  are  10  different  official  sources  of 
rulings  on  income-tax  decisions.  If  you  will  read  any  hundred  of  such 
decisions,  selecting  ten  from  each  source,  you  will  find  numerous  incon- 
sistencies, often  flat  contradictions.  Added  to  this  confusion  are  the 


116  REPORT  OF  PROCEEDINGS 

unrecorded  and  arbitrary  decisions  of  'auditors'  and  'inspectors,'  who 
often  deal  with  industries  and  accounts  of  which  they  have  less  than  an 
elementary  understanding.  How  far  would  you  get  in  operating  a  big 
mine  if  you  had  10  independent  sets  of  orders  going  out  to  gang-bosses 
who  had  never  been  in  a  mine  before? 

"There  are  many  radical  reforms  of  administration  necessary  before 
we  can  have  a  workable  income  tax.  But  the  first  thing,  the  most  press- 
ing thing,  is  to  clean  up  the  past  output,  to  get  the  ore  that  is  above 
ground  into  the  smelter  and  the  metal  out.  "Yours  truly, 

"CARL  C.  PLEHN." 

CHAIRMAN  HOLMES:  This  morning  we  heard  some  excellent  state- 
ments from  Messrs.  Brewster,  Dick,  Gower,  Snyder,  and  Miller.  I  trust 
that  the  members  of  this  meeting  had  time,  during  the  somewhat  liberal 
luncheon  recess,  to  give  further  consideration  to  this  subject,  and  are  now 
prepared  to  give  utterance  to  their  criticisms  of  the  report.  The  Com- 
mittee feels  that  all  it  can  do  is  present  the  report  to  this  Conference, 
and  that  the  Conference  must  approve  or  disapprove  of  it.  The  Committee 
would  prefer  much,  perhaps  severe,  criticism,  out  of  all  of  which  would 
probably  grow  a  final  recommendation  avoiding  some  of  the  weaknesses 
of  this,  adding  other  points  of  strength.  Mr.  Gower  referred  this  morning 
to  the  advisory  board  that  was  in  operation  some  two  years  ago,  and 
spoke  of  the  rulings  which  the  members  of  that  board  had  to  make  under 
stress  of  circumstances,  and  asked  if  the  proposed  board  would  be  a  simi- 
lar body.  The  Committee's  intention  is  that  the  proposed  board  shall  be 

Proposed  Board  to  Be  an  Arbitrator 

a  body  of  very  different  character — one  which  will  act  in  the  nature  of  a 
referee  or  arbitrator  between  the  Government  and  the  taxpayer.  Mr. 
Miller  has  expressed  a  doubt  as  to  whether  this  board  should  be  outside 
the  Bureau  of  Internal  Revenue,  independent  of  it,  or  should  be  an  arm 
of  that  Bureau.  The  Committee  would  like  to  get  an  expression  of  opinion 
on  that  point.  It  feels  that  because  of  the  extraordinary  functions  and 
its  temporary  character,  it  should  be  an  entirely  independent  body,  one 
designed  to  do  a  particular  work  and  then  disappear;  that  in  accomplish- 
ing that  extraordinary  work  it  is  doing  something  extraneous,  something 
which  is  not  now  a  part  of  the  duties  of  the  Bureau  of  Internal  Revenue, 
except,  perhaps,  to  a  limited  extent.  That  board  will  have  power  to  do 
more  than  merely  follow  the  letter  of  the  law.  It  will  have  power  that 
is  now  vested  in  the  Commissioner,  but  rarely  exercised,  that  is,  the 
power  of  compromising  taxes  where  it  evidently  appears  that  the  tax- 
payer would  not  be  able  to  pay  the  taxes  which  it  seems  the  law  assesses 
against  him.  For  instance,  in  the  case  of  a  taxpayer  who  has  had  a  large 
amount  of  income  in  one  year  and  no  income  for  two  or  three  years 
thereafter.  Under  the  present  law,  the  Treasury  Department  is  required 
to  give  consideration  only  to  the  particular  year  in  question.  That  is  an 
unwise  provision  of  our  statute.  It  has  been  recognized  in  Great  Britain 
that  the  net  income  of  a  business  is  the  income  from  a  longer  period  of 
time  than  one  year;  that  what  it  earns  in  three  years,  the  net  after  its 


THE  AMERICAN  MINING  CONGRESS  117 

losses  are  deducted,  is  really  its  net  income.  Our  law,  however,  does  not 
take  that  into  consideration;  the  1918  statute  does  to  a  very  narrow 
extent;  it  takes  into  consideration  the  loss  for  1919,  for  a  very  short  period 
of  time.  I  happen  to  know  where  the  fiscal  year  of  a  corporation  ended 
just  a  few  days  before  the  beginning  of  that  period,  and  of  course  there 
was  a  situation  where  the  express  provision  of  the  statute  could  not  be 
made  operative. 

We  should  like  to  hear  from  other  members  of  this  meeting. 

MR.  MACBETH:  I  would  like  to  make  a  brief  statement:  I  said  briefly 
this  morning  that  when  the  act  of  1918  was  pending,  a  number  of  men 
made  an  effort  to  obtain  the  passage  of  a  bill  somewhat  similar  to  that 
provided  for  by  this  report.  We  worked  several  weeks  on  this  matter  in 

A  Question  of  Salary 

both  Houses  of  Congress.  We  asked  a  salary  of  $9000  for  a  board  of 
seven  men,  but  a  $7500  Congressman  could  not  see  a  $9000  employee, 
so  the  result  of  our  work  is  that  today  you  have  the  Board  of  Appeals  and 
Review.  We  accomplished  something.  Now,  are  you  going  before  Con- 
gress made  up  of  $7500  Congressmen  and  ask  them  to  appoint  a  board  of 
10  men  with  a  salary  of  $25,000  apiece?  Where  are  you  going  to  land? 
Let  us  look  at  this  from  a  common-sense  standpoint:  We  should  cut  that 
down,  in  my  opinion,  if  we  want  to  get  anywhere,  and  make  that  salary 
about  $12,000,  and  I  doubt  whether  you  will  get  far  with  $12,000. 

CHAIRMAN  HOLMES :  Senator  Macbeth  raises  an  important  point  in 
the  discussion  of  this  measure.  The  Committee  gave  considerable  thought 
to  it.  We  recognized  the  difficulties  of  getting  Congress  to  appropriate 
anything  more  than  the  salary  of  a  Congressman  as  a  salary  for  anyone 
else.  We  realized  this  was  an  amount  far  in  excess  of  any  salary,  except 
perhaps,  that  which  the  highest  executive  could  demand.  But,  on  the 
other  hand,  the  strength  of  this  measure  lies  entirely  in  the  quality  of  the 
men  that  may  be  obtained.  And  we  feel  that  it  is  useless  at  this  time  to 
try  to  encourage  men  to  undertake  this  work  unless  they  are  paid  a  salary 
somewhat  commensurate  with  the  value  of  their  services. 

MR.  MACBETH:  The  Chief  Justice  of  the  United  States  Supreme  Court 
receives  $17,000.  Are  you  going  before  Congress  and  ask  for  $25,000  for 
each  member  of  this  board? 

CHAIRMAN  HOLMES:  We  realize  that,  Senator.  We  framed  this 
in  a  way  which  we  hoped  might  be  an  argument;  we  made  this  board  to 
exist  for  a  year.  We  made  this  compensation  to  be  the  compensation  of 
the  board  during  its  existence,  to  get  away  from  the  idea  of  an  annual 
salary  for  a  long  period  of  time  such  as  is  the  case  with  the  Supreme 
Court  Justice  who  gets  his  salary  long  after  he  retires,  whenever  they  do 
retire.  It  is  one  of  the  big  problems  of  this  measure,  one  of  the  biggest 
difficulties  that  confronts  a  successful  introduction  of  this  measure.  We 
should  be  glad  to  hear  from  other  members  on  that  or  any  other  point. 


118  REPORT  OF  PROCEEDINGS 

MR.  MACBETH :  I  want  to  say  something  else :  You  will  find  it  abso- 
lutely impossible  to  create  an  independent  board  subject  only  to  Congress . 
That  board  will  be  under  the  jurisdiction  of  the  Secretary  of  the  Treasury. 
Don't  forget  that.  It  will  be  the  purpose  of  the  party  that  comes  into 
power  after  March  4th  to  consolidate;  you  are  going  to  find  a  general 
cutting  down  of  expenses.  We  have  observed  that  by  statements  in  the 
press,  made  by  prominent  members  of  the  party  who  will  be  in  power. 
Now  it  is  the  purpose  of  this  measure  to  create  another  independent  board 
which  will  require  a  larger  expenditure  of  money.  You  cannot  get  away 
with  anything  of  that  kind;  it  is  useless.  We  want  to  recognize  that 
fact. 

CHAIRMAN  HOLMES :  Is  there  any  other  member  who  wants  to  speak 
on  this  point? 

MR.  CLARK:  Would  there  be  any  of  the  sting  of  this  high  salary 
taken  out  of  this  proposal  if  the  mining  companies  whose  accounts  were 
being  audited  were  made  to  pay  a  small  fee,  or  some  fee  in  proportion, 
or  in  a  lump  sum — would  that  help  any? 

MR.  MACBETH:  I  hardly  think  that  would  be  possible  It  would  be 
something  very  unusual,  something  that  is  never  done. 

MR.  GOWER:  Has  it  occurred  to  the  Committee  at  all  to  consider  the 
possibility  of  this  proposed  board  serving  without  pay  as  the  British  do, 

Serving  Without  Pay 

at  least  I  believe  they  do;  I  am  not  very . familiar  with  that  point.  Pos- 
sibly if  you  require  so  many  lawyers,  accountants,  and  business  execu- 
tives, you  might,  by  appealing  to  the  national  bodies  of  lawyers  (I  know 
there  are  such),  secure  the  men  in  that  way.  You  speak  here  of  the 
board  lasting  but  one  year,  possibly  two;  we  know  that  one  year  usually 
runs  into  two.  Could  you  not  secure  these  men  for  that  length  of  time  to 
serve  without  pay  and  thus  remove  the  practical  objection  that  Mr. 
Macbeth  has  very  clearly  indicated?  Perhaps  also  you  could  find  business 
executives  who  would  be  willing  to  serve  for  the  limited  time  without 
pay. 

MR.  MACBETH:  With  respecct  to  that,  the  Tax  Advisory  Board  was 
composed  of  men  who  served  for  a  dollar  a  year  and  paid  their  own  ex- 
penses. The  Government  allowed  $15  a  day,  but  I  happen  to  know  these 
gentlemen  never  took  the  money.  I  believe  we  can  find  a  board  of  men 
who  will  serve  as  Mr.  Gower  has  suggested. 

CHAIRMAN  HOLMES:  That  is  another  interesting  point.  It  was  pos- 
sible during  the  war  to  get  a  large  number  of  men  to  serve  in  these  pub- 
lic capacities  without  pay.  Is  it  possible  in  a  strenuous  period  of  recon- 
struction to  do  the  same  thing?  We  should  like  to  hear  from  other 
members  on  that  point. 

MR.  GOWER:  On  that  point  I  could,  perhaps,  speak  about  the  account- 
ants, being  one  myself  and  a  member  of  their  national  body.  I  feel  sure 


THE  AMERICAN  MINING  CONGRESS  119 

if  a  matter  of  that  kind  were  put  up  to  them,  and  the  Government  re- 
quired them  to  furnish  one  or  two  men  for  such  a  board,  that  if  this 
financial  stress  you  speak  of  was  a  factor  the  national  body  of  those 
accountants  would  bear  the  stress  itself,  it  would  be  to  its  advantage  to 
do  so — pay  the  salary  themselves. 

CHAIRMAN  HOLMES:     Are  there  any  further  remarks  on  that  point? 

MR.  ROBERT  G.  WILSON:  It  being  one  of  the  essential  prerequisites 
of  such  a  board  of  special  commissioners  that  it  be  vested  with  sufficient 
authority  to  prove  really  effective,  I  doubt  very  much  whether  Congress 
would  vest  that  authority  in  a  board  serving  voluntarily.  We  do  many 
new,  strange,  and  experimental  things  these  days,  but  I  doubt  very  much 
whether  that  would  be  a  feasible  proposition. 

CHAIRMAN  HOLMES:  The  British  Board  of  Referees,  I  believe,  is 
composed  of  a  large  number  of  men — I  don't  recall  the  exact  number.  I 
think  they  only  serve  occasionally,  and  a  small  number  makes  a  quorum; 
some  attend  one  or  two  meetings  a  year.  I  think  the  work  here  will  be 
too  strenuous  for  anything  of  that  sort.  The  men  who  go  in  will  have  to 
give  all  of  their  time,  energy,  and  thought  to  it.  We  should  like  to  hear 
from  Mr.  Miller  as  to  whether  he  thinks  a  board  of  this  kind  could  be 
organized  at  the  present  time  to  work  without  pay. 

Views  of  Public  on  No-Salary  Men 

MR.  MILLER:  I  am  afraid  of  that  on  this  ground:  The  success  of  such 
a  board,  or  almost  anything  that  anybody  does,  depends  on  the  way  it 
strikes  public  opinion.  No  board  could  last  very  long  or  do  very  good 
work  unless  the  people  are  pretty  well  satisfied.  Frequently  I  have  run 
into  the  feeling — when  a  man  is  working  for  nothing  the  report  gets 
around — "Oh,  well,  he  is  getting  his  out  of  it  some  way  or  other."  That 
is  human  nature;  and  this  board  cannot  succeed  without  everybody  feel- 
ing confidence  in  it.  You  could  get  the  men,  and  they  would  do  real 
good  work;  you  might  get  better  men  that  way  than  any  other,  but  they 
would  not  have  that  backing  up  of  the  public  without  which  we  cannot 
do  anything. 

CHAIRMAN  HOLMES:  England  has  a  great  advantage  in  having  a 
large  leisure  class  she  calls  on  for  special  work  of  this  kind.  Our  leisure 
class  is  not  of  the  same  grade  of  intelligence  and  experience  as  the  British 
class.  Are  there  any  other  remarks  on  this  point  of  discussion? 

MR.  C.  A.  FISHER:  Isn't  the  taxpayer's  need  sufficiently  urgent  so  that 
he  could  at  least  make  his  Congressman  say  that  a  man  who  is  capable  of 
settling  a  question  that  involves  so  many  million  dollars  as  the  tax  ques- 
tion does  today  should  be  properly  paid,  and  that  such  a  man  could  not 
be  obtained  unless  he  was  paid  a  $12,000  or  $15,000  salary?  I  believe  you 
could  get  men  to  do  it  for  $12,000  a  year,  and  if  that  is  what  is  going  to 
kill  the  recommendations  of  the  Committee,  let  us  reduce  their  salaries, 
as  every  taxpayer  in  the  country  realizes  we  must  do  something;  we 


120  REPORT  OF  PROCEEDINGS 

cannot  go  on  this  way  much  longer.  I  have,  for  the  last  two  years,  been 
spending  a  great  deal  of  time  with  the  Department,  and  I  think  that  the 
Natural  Resources  Sub-division,  with  which  I  am  quite  familiar,  is  doing 
splendid  work,  and  settling  these  cases  as  fast  as  an  organization  only  two 
years  old  could  be  expected  to.  When  you  look  at  the  files  in  the  Treas- 
ury Department  that  are  untouched— and  let  some  of  those  men  who  have 
charge  of  these  files  point  them  out  to  you — then  sit  down  and  consider 
the  time  you  have  spent  on  one  tax  case,  and  think  of  the  time  it  will 
take  to  clean  up  those  files.  If  you  could  make  the  taxpayer  realize  that 
situation,  he  would  be  perfectly  willing  to  send  his  Congressman  to  Wash- 
ington to  do  something,  if  it  did  cost  a  lot  of  money,  because  the  indus- 

Industry  in  a  Quandary 

tries  today  are  at  a  point  where  they  scarcely  know  what  to  do.  They 
don't  know  how  much  their  tax  is  going  to  be;  they  do  know  it  is  going 
to  be  heavy;  they  cannot  lay  out  a  rational  policy  on  account  of  the  tax; 
and  certainly  this  whole  situation  has  become  acute  enough  so  that  we  can 
make  the  Congressman  realize  that  something  must  be  done.  You  cannot 
get  good  men  to  take  responsibility  such  as  a  man  in  that  position  would 
have  to  take  without  paying  him  something  for  it;  but  I  would  rather  see 
the  $25,000  cut  down  than  the  recommendations  of  the  Committee  lost. 
I  think  you  might  find  men  who  would  do  it  for  $12,000  or  $15,000,  but  this 
holding  men  down  to  $7000  because  that  is  the  salary  of  some  of  the  law- 
makers I  think  is  not  good  business. 

MR.  MACBETH:       That's  a  fact. 

CHAIRMAN  HO'LMES:  It  is  a  fact,  and  we  all  know  it  is.  This  re- 
minds me  of  a  former  President  who  said,  "We  are  facing  a  condition,  and 
not  a  theory."  On  the  other  hand,  we  must  get  these  old  taxes  cleaned  up 
and  the  billion  dollars  collected.  Is  there  any  further  discussion  on  this 
or  any  other  point  in  the  report? 

MR.  WILSON:  If  there  is  no  further  discussion,  Mr.  Chairman,  I 
should  like  to  make  a  motion  that  the  present  Chairman  of  the  Confer- 
ence be  authorized  and  directed  to  appoint  a  committee  of  five  to  draw  up 
resolutions  to  offer  tomorrow  before  the  general  session  of  the  Conven- 
tion to  be  followed  by  the  introduction  of  such  resolutions  to  the  Resolu- 
tions Committee. 

The  motion  was  unanimously  carried. 

CHAIRMAN  HOLMES:  The  chair  appoints  Mr.  Paul  Armitage,  Mr. 
R.  C.  Allen,  Mr.  Ravanel  MacBeth,  Mr.  C.  A.  Fisher,  and  the  chairman.  I 
would  request  that  Mr.  Miller  will  kindly  consent  to  act  in  an  advisory 
capacity  to  that  Committee. 

MR.  CLARK:  As  a  direct  result  of  Federal  legislation,  coal  miners  have 
been  required  to  raise  their  wages  approximately  100%,  and  the  Depart- 
ment employees  have  had  something  that  is  not  even  an  extra  raise,  but 
simply  a  bonus  of  approximately  10  or  15%.  I  wish  the  Committee  would 


THE  AMERICAN  MINING  CONGRESS  121 

mention  that,  and  I  hope  they  will  make  the  recommendation  strong  so 
that  those  men  in  office  and  holding  Federal  employment  be  given  a  good, 
substantial  raise  such  as  other  men  have  received  in  the  past  few  years, 
in  the  hope  it  will  encourage  the  men  now  there  to  stay  and  do  better 
work.  That  will  be  a  great  source  of  relief. 

CHAIRMAN  HOLMES:  The  Committee  will  bear  that  recommenda- 
tion in  mind. 

The  next  group  of  subjects  that  this  Conference  will  consider  are  those 
relating  to  the  current  tax  situation.  That  is  quite  a  considerable  sub- 
ject. Discussion  will  take  place  on  that  this  afternoon,  and  if  neces- 
sary, it  will  be  carried  over  to  the  session  that  will  be  held  tomorrow 
morning  at  9.30.  That  session  is  not  on  the  program.  It  will  include  a 
further  discussion  by  Mr.  Miller  and  a  paper  by  Mr.  C.  A.  Fisher.  This 
afternoon  will  be  devoted  to  such  brief  discussions,  criticisms,  and  sug- 
gestions as  may  occur  to  members  present.  Mr.  Gower,  I  believe,  has 
something  to  say  about  depletion. 

MR.  GOWER:  In  the  discussion  this  morning  I  alluded  to  the  Board 
that  was  formed  in  1917,  on  which  we  had  at  least  one  accountant  of 
national  reputation.  The  decisions  of  that  Board  have  been  largely  incor- 
porated in  the  present  regulations.  Now,  the  regulation  that  I  wish  to 
speak  to  you  about  is  one  which  has  been  fastened  upon  the  mining  indus- 
try by  accountants,  particularly  by  those  who  served  oa  the  Board  in 
1917,  and  the  gentlemen  who  fastened  this  rule  upon  us — although  I  don't 
speak  in  any  derogation  of  their  great  ability — I  think  knew  very  little 

Distinctions  in  Industries  and  Respective  Taxes 

about  the  mining  industry,  mine  accounting,  and  mining  generally;  and 
in  making  their  rules  they  endeavored  to  make  general  regulations  cover- 
ing manufacturing,  trading,  and  mining,  as  though  there  were  no  dis- 
tinction between  those  classes  of  business.  This  rule  is  one  which  I  think 
has  hit  more  or  less  every  mining  company  in  the  country.  A  good  deal 
depended  upon  the  age  of  the  mine.  In  a  case  that  I  have  in  mind,  the 
company  was  severely  hit  because  it  had  been  operating  20  years.  The 
foundation  of  that  rule  is  this:  The  Department  says  in  Article  829, 
Regulations  45,  every  time  a  piece  of  ore  is  taken  out  of  the  ground,  from 
the  time  the  first  pick  and  shovel  are  put  into  the  ground,  that  mine  has 
suffered  impairment  of  its  original  invested  capital,  no  matter  what  the 
circumstances  of  the  mine  may  be,  whether  the  mine  is  worth  10  times 
as  much  today  as  it  was  when  it  started.  Yet  the  fact  that  the  ore  was 
mined —  so  say  the  Regulations,  or  rather,  so  they  are  interpreted — has 
impaired  that  invested  capital,  and  the  Department  takes  the  quantity  of 
ore  that  was  extracted  from  the  time  the  first  shovelful  was  removed,  and 
it  multiplies  that  tonnage  by  a  uniform  constant  rate,  and  on  the  result 
so  obtained  is  proceeds  to  take  from  our  invested  capital,  no  matter  what 
the  conditions  are.  No  inquiry  is  made  into  that;  the  mere  fact  that  it 
extracted  ore,  the  Department  says,  has  impaired  the  invested  capital. 
We  all  know  that  invested  capital  consists  of  two  or  three  elements. 


122  REPORT  OF  PROCEEDINGS 

They  say,  taking  out  that  ore  20  years  ago  impaired  our  profits,  and  if 
we  come  in  today  with  several  millions  of  dollars  of  profits  as  part  of  our 
invested  capital,  the  Department  says  no,  they  are  not  profits;  part  of 
them  is  a  return  of  your  original  capital,  and  that  rule  they  work  out  by 
Regulations  45,  Article  839.  It  is  to  combat  that  rule  I  will  read  this 
paper.  I  would  like  to  have  it  fixed  in  your  minds  clearly  that  what  the 
Department  is  attacking  is  the  status  of  our  profits.  They  say  our  profits 
are  not  true  profits,  but  contain  a  large  element  of  original  capital,  and 
therefore  they  say  they  may  deprive  us  of  millions  of  dollars  of  profits. 
[Mr.  Gower's  paper  appears  on  page  649  of  the  proceedings.] 

CHAIRMAN  HOLMES:  We  have  listened  with  a  great  deal  of  interest 
to  Mr.  Gower.  He  has  taken  exception  to  an  established  rule  of  the 
Treasury  Department.  His  argument  is  the  kind  that  will  help  develop 
our  law.  He  is  bringing  out  forcibly  one  side  of  a  very  difficult  question. 

Depletion  and  Depreciation 

It  is  an  interesting  point  to  which  the  Treasury  Department  has  given 
considerable  thought — whether  it  is  necessary  to  reduce  the  invested  capi- 
tal by  a  calculation  for  depreciation  or  depletion  when  there  has  been  an 
actual  increase  in  value  over  a  period  of  time.  In  other  words,  Mr. 
Gower's  property  was  worth  $26,500,000  in  1904;  it  was  worth  $41,000,000 
in  1913;  there  was  no  loss  in  value;  there  was  a  greater  market  value 
at  the  end  of  that  period  than  at  the  beginning.  The  Department  says, 
however,  you  must  reduce  your  surplus  by  $11,000,000  to  take  care  of  a 
mathematical  loss  in  your  original  investment. 

MR.  T.  O.  McGRATH:  Mr.  Gower  has  brought  out  the  side  of  the 
successful  mine,  but  the  problem  of  the  unsuccessful  mine  or  the  prospec- 
tive mine,  has  not  been  presented.  I  am  connected  with  a  mining  concern 
that  has  spent  $3,500,000,  but  has  not  yet  developed  a  mine,  although  it 
has  a  chance  to  make  a  big  mine  in  Bisbee,  Arizona.  There,  ores  are  not 
found  in  large  deposits;  they  are  in  fissures  and  stringers,  and  if  you 
once  find  an  ore-bearing  zone  it  is  fairly  persistent,  so  companies  never 
open  their  orebodies  more  than  one,  two,  or  three  years  ahead  of  produc- 
tion. Assuming  that  this  company  which  has  spent  $3,500,000,  next  year 
reaches  ore-zones  where  it  can  start  opening  the  mine  and  shipping  on  a 
commercial  scale;  and  say  within  a  year  or  two  copper  prices  rise,  the 
company  will  want  to  get  back  some  of  that  expenditure  on  a  good  copper 
market.  Say  it  extracts  $4,000,000  of  ore,  and  its  costs  $2;0 00,000  for  oper- 
ating expenses,  then  the  Government  says  part  of  that  $2,000,000— the 
difference  between  the  $4,000,000  gross  and  the  $2,000,000  expenses — must 
be  set  aside  as  depletion  and  the  remainder  is  income.  There  is  no  way 
for  such  mines  to  determine  depletion.  They  have  no  enormous  tonnage 
such  as  the  mine  Mr.  Gower  mentions.  They  have  to  estimate  what  they 
call  probable  ore,  which  is  a  very  difficult  thing  to  do.  I  would  say  re- 
garding a  mine  of  such  character,  that  the  Department  should  recognize 
the  difference  between  a  developed  mine  and  a  prospect.  A  lot  of  little 
mines  are  operating  at  a  fair  profit,  but  they  do  not  know  how  long  they 


THE  AMERICAN  MINING  CONGRESS  123 

are  going  to  do  that;  still,  they  have  to  estimate  their  depletion  and  put 
the  rest  in  as  income.  If  they  were  exempt  from  all  income  taxes  until 
they  had  discovered  sufficient  ore  to  warrant  them  in  believing  they  would 
get  their  investment  back,  then  they  would  be  in  position  to  know  they 
would  not  be  taxed  on  return  of  their  capital,  but  in  the  present  case  a 
great  number  of  mines  are  paying  income  taxes  on  returned  capital. 

CHAIRMAN  HOLMES:  That  is,  perhaps,  a  situation  which  is  impos- 
sible, in  the  final  analysis,  to  avoid  altogether.  We  will  no  doubt  grad- 
ually develop  our  law  so  as  to  take  care  of  it  as  fairly  as  possible  in  a 
practical  manner  when  each  particular  case  arises. 

The  meeting  then  adjourned. 


REPORT  OF  PROCEEDINGS 


WEDNESDAY  MORNING,  NOVEMBER  17,  1920 

Mr  Paul  Armitage  presided. 

CHAIRMAN  ARMITAGE :  We  were  discussing  a  paper  by  Mr.  Gower, 
and  we  are  to  hear  from  Mr.  E.  L.  Blackman  this  morning  on  the  legal 
side  of  accounting,  with  some  definitions. 

MR.  BLACKMAN  :  I  have  been  requested  to  make  a  few  remarks  on 
the  legal  side  of  the  accounting  problem,  which  Mr.  Gower  developed 
yesterday.  He  showed  that  the  mining  industry  and  mine  accounting 
had  never  accepted  the  rules  set  forth  in  Articles  838  and  839  of  Regu- 
lations 45.  I  have  been  asked  to  tell  you  the  legal  effect  and  legal  results 
which  follow  from  such  action  by  the  mining  industry. 

It  may  be  suggested'  that  the  Income  Tax  Bureau  has  power  to  enforce 
a  new  rule  despite  the  practice  at  the  mines.  I  am  here  to  show  you  that  it 
cannot  be.  It  may  be  suggested  that  the  statutory  depletion  provisions 
of  1916,  1917,  and  1918  established  a  new  rule,  and  gave  the  Bureau 
power  to  apply  this  rule  backwards  to  the  beginning  of  operations  as  well 
as  forward,  and  to  extend  the  now  well-recognized  depletion  rule  for 
ascertaining  annual  taxable  profits  to  the  whole  economic  history  of  the 
mine,  and  to  require  depletion  to  be  written  in  from  the  beginning  of 
operations.  I  hope  to  show  you  that  there  is  something  in  that  conten- 
tion; that  the  law,  so  far  from  authorizing  any  such  thing,  on  the  con- 
trary states  explicitly  that  past  profits  must  be  computed  according  to 
the  rules  that  existed  in  the  past,  and  not  according  to  these  new  rules. 

Intent  of  Congress. 

In  determining  the  meaning  of  a  tax  measure,  there  is  one  fundamental 
principle  to  be  kept  in  mind  all  the  time,  and  that  is  the  intent  of  Con- 
gress. We  get  into  abstractions  and  discussions  of  all  kinds  and  begin 
hair-splitting,  and  forget  entirely  that  the  whole  thing  to  determine  is, 
what  did1  Congress  mean  by  the  words  it  used.  In  the  law  now  under 
discussion  Congress  used  broad  language.  It  said  in  Section  207,  the 
article  that  provides  for  invested  capital,  that  invested  capital  may  con- 
sist of  three  items,  one  of  the  three  being  paid-in  or  earned  surplus  and 
undivided  profits.  Earned  surplus  and'  undivided  profits  is  a  broad 
general  phrase,  and  it  is  necessary  to  determine  what  was  meant.  There 
are  two  sources  to  which  we  can  apply  for  information  in  order  to 
determine  what  Congress  actually  meant ;  one  is  the  dictionary,  which  is 
usually  referred  to  and  sufficient  to  determine  the  meaning  of  any  legis- 
lative act;  the  other  is  the  accounting  practice.  It  may  be  that  the  dic- 
tionary is  sufficient  in  this  case.  If  that  be  so,  then  we  have  a  broad 
definition  of  earned1  surplus— one  that  would  include  practically  every 


THE  AMERICAN  MINING  CONGRESS  125 

accretion  in  value,  which  was  the  result  of  effort,  and  so  was  earned  and 
which  would  exclude  merely  speculative  or  unearned  increments.  The 
Treasury  Department  of  the  Bureau  of  Internal  Revenue  quickly  recog- 
nized that,  and  early  in  its  discussions  and  rules  on  this  subject  stated 
that  the  terms  "earned  surplus  and  undivided  profits  incorporates  into 
the  law  by  reference  the  entire  body  of  principles  of  accounting  relative 
to  the  determination  of  surplus;"  that  is,  the  Department  holds  that 
"surplus,"  as  used  by  Congress,  referred  to  the  accountant's  surplus  and 
not  to  the  surplus  that  the  ordinary  layman  might  arrive  at. 

What  Is  the  General  Accounting  Practice? 

For  the  purpose  of  this  discussion  we  will  take  the  Treasury  Depart- 
ment at  its  word.  We  will  admit,  for  argument,  that  we  cannot  refer  to 
the  dictionary  alone,  but  we  must  refer  to  the  accounting  practice  of  the 
country.  If  Congress  bases  its  interpretation  of  "surplus"  upon  account- 
ing practice,  it  bases  that  meaning  and  interpretation  upon  something 
which  was  in  existence — not  something  that  would  be  brought  into  exist- 
ence thereafter.  If  Congress  intended  its  meanings  to  be  discovered  by 
<t  reference  to  some  authority  it  intended  that  such  reference  should  be 
to  an  existing  authority;  and  in  other  words,  that  the  reference  should 
be  to  the  accounting  practice  of  the  country  as  such  practice  existed — not 
as  that  practice  might  thereafter  exist,  and  not  as  some  department  of 
the  Government  might  think  that  the  practice  should  exist. 

Congress  gave  no  authority  to  any  branch  of  the  Government  to 
formulate  rules  and  regulations  for  determining  invested  capital  or 
earned  surplus.  It  based  its  language  squarely  upon  the  existing  facts, 
and  we  must  refer  to  them  in  order  to  see  what  was  meant.  Mr.  Gower 
showed  clearly  what  those  facts  were,  and  that  the  mining  industry  had 
rejected  the  ratable  depletion  rule  based  on  a  deduction  from  profits  for 
every  unit  of  ore  removed  from  the  mine,  and  that  it  had  substituted  in 
place  thereof  a  valuation.  Now,  if  "earned  surplus"  is  to  be  determined 
by  reference  to  accounting  rules,  and  if  a  mine  surplus  is  in  question, 
the  reference  must  be  to  mine  accounting,  not  to  manufacturing  account- 
ing, or  mercantile  accounting,  or  any  other  kind  of  accounting.  Mr. 
Gower  also  showed  that  there  was  no  uniformity  in  accounting  practice: 
that  each  important  industry  had  built  up  its  own  practice;  that  those 
practices  were  based  upon  the  necessities  of  the  various  industries  and 
their  peculiarities,  and  that  the  methods  varied  widely.  When  we 
come  to  a  mine  we  cannot  say  we  will  determine  its  profits  by  referring 
to  the  manufacturer's  acocunting  methods;  and  that  brings  us  to  the 
crux  of  the  situation — which  is  exactly  what  the  Treasury  Department 
has  sought  to  do  in  this  case.  It  was  familiar  with  the  manufacturing 
rule  of  depreciation,  not  confined  to  manufacturing,  but  extended  to 
many  other  industries  and  businesses.  The  Department  was  familiar 
with  the  general  rule  for  depletion  that  is  applied  to  profits  which  are 
above  ground,  and  are  known  and  ascertained.  They  decided  that  those 
depreciation  and  depletion  rules  were  good  and  logical,  and  that  it  would 
fashion  a  yardstick  along  the  line  of  those  rules  and  apply  such  to  the 
profits  of  every  industry.  That  is  exactly  where  we  take  issue.  We  say 


126  REPORT  OF  PROCEEDINGS 

The  Department  Has  no  Such  Power 

Congress  conferred  upon  the  Department  no  such  power;  that  all  the 
Department  has  a  right  to  do  is  to  accept  the  accounting  practice  of  the 
country  as  it  finds  it,  to  base  its  rules  and  regulations  on  that  practice, 
and  that  it  cannot  change  that  practice  by  making  accounting  in  all  in- 
dustries uniform  where  is  found  those  practices  most  divergent.  It  can- 
not force  one  industry  to  adopt  the  practice  of  another  but  new  to  it 
simply  because  the  Department  thinks  that  the  new  practice  is  superior 
from  the  standpoint  of  logic  or  utility  of  any  other  standpoint.  That 
would  seem  to  suffice.  That  consideration  would  seejn  to  be  a  complete 
answer  to  this  effort  of  the  Department  to  fasten  upon  the  mining  indus- 
try a  rule  which  it  has  always  rejected. 

Mining  men  did  not  reject  the  manufacturer's  rule  because  they 
were  ignorant,  or  because  they  were  otostinate;  they  rejected  it  because 
while  it  was  a  good  rule  for  the  manufacturer  it  was  a  poor  rule  for 
mines:  it  could  not  be  applied  practically  in  any  way.  There  is  a  funda- 
mental difference  between  a  mine  and  almost  any  other  kind  of  business. 
Mr  Gower  gave  extracts  from  the  Supreme  Court  of  the  United  States 
on  that  subject:  I  shall  not  repeat,  but  I  want  to  point  out  this  distinc- 
tion: where  a  man  purchases  a  timber  tract,  or  a  manufacturing  plant, 
or  any  other  assets  of  that  kind,  he  makes  an  investment;  he  knows 
within  certain  limits  what  he  is  getting,  and  what  he  can  reasonably 
expect  to  do.  When  a  man  puts  somethings  into  mining  he  is  specu- 
lating; it  is  not  an  investment  at  all,  it  is  a  speculation.  The  results 
will  net  be  commensurate  with  his  payments  or  his  efforts;  the  results 
depend  upon  chance.  In  the  great  majority  of  cases,  the  mine  is  a 
failure;  there  is  no  possible  way  for  the  mine  investor  to  get  back  his 
original  investment,  because  there  are  no  profits  from  which  to  get  his 
investment.  Where  the  mine  is  successful,  it  produces  profits  many 
times  the  amount  of  the  original  investment.  Of  course  I  am  speaking 
generally,  with  regard  to  the  fact  that  a  mine,  after  it  has  been  fully 
developed  and  known  to  be  a  great  producer,  is  seldom  if  ever  sold. 

Manufacturing  and  Mining  Are  Different 

Usually  a  mine  is  sold  in  early  stages  of  development.  For  these 
reasons,  a  rule  that  was  perfectly  reasonable  for  the  manufacturer  would 
not  be  applicable  to  the  miner.  The  manufacturer  has  a  machine  that 
he  knows  has  a  10-year*  life.  At  the  end  of  that  time  he  knows  that  it 
will  be  worthless,  therefore  he  divides  the  cost  of  his  machine  by  ten, 
and  each  year  appropriates  the  proper  percentage  by  deducting  from 
profits,  in  order  to  return  to  himself  what  he  had  originally  invested,  so 
that  when  the  machine  is  gone  he  will  have  an  amount  in  cash  or  other 
property  equivalent  to  his  original  investment.  But  the  miner  cannot 
do  that.  There  is  no  stable  basis  that  he  can  adopt  to  bring  about  that 
result.  The  Bureau,  at  the  end  of  a  long  period  of  years,  says  in  effect 
to  the  mining  company,  "We  value  your  assets  today  at  so  much;  we 
find  you  have  so  many  thousand  tons  of  ore  in  your  mine;  prior  to  1913 
you  extracted  a  certain  number  of  tons,  so  that  the  total  content  of  your 


THE  AMERICAN  MINING  CONGRESS  127 

mine  at  the  time  you  acquired  it  was  the  sum  of  those  two  figures; 
therefore,  we  will  require  you  to  deplete  from  the  beginning  upon  the 
basis  of  that  tonnage."  That  is  all  very  well  when  you  have  come  to  the 
end,  or  near  the  end  of  exploration,  and  know  what  the  content  of  the 
mine  is;  but  how  could  the  miner,  when  he  started  operations,  say  20 
years  ago,  know  what  basis  to  adopt?  Every  year  his  estimate  of  the 
total  content  of  the  mine  would  vary;  every  year  he  would  have,  if  his 
mine  were  a  good  one  and  developing  and  expanding  as  he  went  along,  a 
larger  and  larger  basis  of  depletion.  In  such  year  that  he  had  actually 
made  a  deduction  for  depletion  he  would  have  deducted  too  much  and  he 
would  have  to  make  some  adjustment  on  his  books,  and  the  ordinary 
miner  would  be  in  hopeless  confusion.  Because  of  those  facts,  he  threw 
the  whole  manufacturing  depreciation  rule  out  of  the  window,  and  said: 
"It  has  no  application  to  mining:  I  will  follow  a  practical  rule  which  does 
apply  to  mining,  and  when  it  is  necessary  for  me  to  determine  whether 
I  have  depleted  my  mine  or  not,  I  will  examine  it  and  find  out  how 
much  ore  is  there,  and  if  there  is  sufficient  ore  to  make  good  my 
original  investment  I  will  consider  that  I  have  suffered  no  loss  by  deple- 
tion, and  that  all  I  have  received  in  the  way  of  net  revenues  is  profits." 
That  rule,  it  seems  to  me,  when  it  comes  to  logic,  is  preferable  to  this 
other  rule  that  will  not  work.  That,  I  think,  covers  the  position  in  so  far 
as  it  is  affected  by  the  recent  statutory  depletion  rules.  In  1916,  1917, 
and  1918,  as  we  all  know,  Congress  passed  statutes  authorizing  the  De- 
partment to  make  rules  and  regulations  for  allowing  depletion,  which  the 
latter  passed,  and  we  have  no  criticism  to  make.  We  think  that  pos- 
sibly the  rules  as  passed  are  about  the  only  practical  ones  that  could  have 
been  adopted.  I  will  not  discuss  them  as  they  are  all  familiar  to  you; 
but  the  Department  apparently  considers  that  because  it  is  making  an 
allowance  to  the  mining  companies  from  1916  onward,  and  permitting 

A  Preferred  System 

them  to  make  deductions  from  their  net  receipts,  that  it  must  go  back 
and  revise  the  mining  accounts  over  the  whole  period  of  the  life  of  the 
operation  from  the  very  beginning.  That,  I  say,  has  absolutely  no  sup- 
port in  the  law,  and  furthermore,  is  directly  contrary  to  the  express, 
plain  provisions  of  the  law  itself.  Under  the  law  of  1917  you  were  all 
given  a  deduction,  which  was  based  on  pre-war  profits.  It  was  7  to  9% 
of  your  invested  capital,  ascertained  by  what  pre-war  profits  were.  In 
the  Revenue  Act  of  1917  it  is  provided  that  you  must  determine  your 
pre-war  profits  for  the  purpose  of  ascertaining  the  deduction.  In  Sec- 
tion 206,  the  next  preceding  207,  the  statute  provides  that,  for  the  pur- 
poses of  this  title  which  includes  all  these  articles  we  are  speaking  of  in 
sections,  your  profits  are  the  profits  which  you  have  returned  under  the 
various  acts  of  the  past,  and  that  any  man  in  computing  his  pre-war 
profits  must  do  so  according  to  the  law  that  was  in  Effect  in  the  year  in 
which  he  made  those  profits.  There,  we  see  a  direct  conflict  between  the 
rule  of  the  Treasury  Department  and  the  plain  language  of  Congress. 


128  REPORT  OF  PROCEEDINGS 

Departmental  Rule  and  Intent  of  Congress 

The  Department  states  that  you  made  no  profits  until  you  deduct  from 
your  net  income  a  proper  allowance  for  depletion;  Congress  says  that  the 
profits  you  made  in  1910  to  1913,  inclusive,  were  those  which  you  returned 
under  the  provisions  of  the  acts  existing  for  those  years  and  those  acts 
allowed  no  deductions  for  depletion.  That  conflict  does  more  than 
directly  refute  the  Treasury  Department  statement  as  to  those  particular 
year's ;  it  breaks  down  the  whole  rule.  The  Department's  rule  is  based 
upon  the  theory  that  a  uniform  depletion  rate  extends  over  the  entire 
period.  Congress  has  said  that  in  these  particular  years  your  rate  is 
based  on  the  law  as  it  existed.  The  law  as  it  existed,  so  far  as  the  mine 
was  concerned,  from  1909  to  1913,  was  that  you  net  proceeds  from  mining 
constituted  your  income — your  taxable  income,  and  you  were  entitled  to 
no  deduction  whatever  for  depletion,  and  every  time  the  miners  took 
claims  for  depletion  to  court  they  were  decisively  beaten.  In  1913,  the 
law  allowed  a  maximum  of  5%  for  depletion,  regardless  of  what  the  true 
depletion  was.  Congress  says  that  the  profits  that  you  must  return  for 
those  years,  1909-13,  are  these  allowed  under  the  laws  of  those  years. 
That  seems  to  smash  any  claim  to  a  general  rule  of  depletion  based  on  a 
constant  figure. 

There  is  another  point,  based  squarely  on  the  law  itself,  and  that  is  this 
law  is  made  up  of  three  sections: 

The  Law  In  Brief 

First,  it  allows  cash  paid  in. 

Second,  the  tangible  property  paid  in  for  stock.  In  this  case  Congress 
demands  and  requires  a  valuation  of  that  tangible  property  on  January 
1,  1914,  so  that- if  you  started  with  a  mine  worth  $1,000,000  and  took  out 
$2,000,000  in  profits,  but  your  mine  was  nearly  exhausted  on  that  date, 
you  would  have  to  write  in  your  accounts  in  that  second  sub-division  the 
actual  valuation  of  the  mine  on  January  1,  1914,  as  shown  by  a  re-valua- 
tion as  of  that  date.  The  re- valuation  would  take  into  account  the  ex- 
traction of  all  the  ore  during  the  whole  anterior  period,  because  you 
could  value  as  of  1914  only  the  ore  still  left  in  the  mine  at  that  time, 
If  you  were  to  follow  the  language  of  Congress,  and  still  follow  the 
Department's  rules,  you  have  to  take  this  depletion  deduction  not  only 
once,  but  twice;  you  have  to  take  it  off  under  the  valuation  provision  of 
sub-division  B,  and  according  to  the  Bureau  you  must  deduct  it  from  your 
surplus  so  that  we  will  get  the  same  deduction  twice,  the  mining  company 
being  required  not  only  to  make  its  deduction  for  depletion  every  year, 
but  to  make  that  deduction  double. 

CHAIRMAN  ARMITAGE:  Gentlemen,  the  subject  is  now  open  for 
discussion,  ,• 

£ 

MR.  MACBETH:  Mr.  Blackman  and  others  have  criticised  the  law, 
that  is,  the  interpretation  of  the  law  in  rules  and  regulations,  and  I 
would  like  to  ask  why  they,  instead  of  constantly  criticising  the  inter- 


THE  AMERICAN  MINING  CONGRESS  129 

pretation  by  the  Treasury  Department  of  the  act,  do  not  go  into  court  and 
make  a  test  case  and  ascertain  whether  their  view  of  the  matter  is  right, 
or  whether  the  view  of  the  Department  is  correct? 

MR.  BLACKMAN:  We  are  going  into  court  if  we  don't  win  in  the 
Treasury  Department. 

MR.  GOWER :  May  I  mention,  Mr.  Macbeth,  that  we  did  not  know  that 
they  were  going  to  apply  this  rule  just  this  way  until  three  months  ago. 
The  regulations  deal  in  very  general  language.  It  is  when  they  apply 
the  regulations  that  you  begin  to  see  how  you  are  hit. 

CHAIRMAN  ARMITAGE:  I  would  like  to  ask  the  gentlemen  who 
have  considered  this  very  seriously  if  they  have  considered  the  effect  of 
Regulation  41,  Article  55  on  this  subject,  which  was  contained  in  the 
regulations  interpreting  the  1917  act.  It  reads  as  follows: 

"Actual  cash  value  of  tangible  property,  other  than  cash,  bona  fide 
paid  in  for  stock  or  shares,  at  the  time  of  such  payment,  but  in  no  case 
to  exceed  the  par  value  of  the  original  stock  or  shares  specifically  issued 
therefor,  unless  the  actual  cash  value  of  such  tangible  property  at  the 
time  paid  in  is  shown  to  the  satisfaction  of  the  Commissioner  to  have 
been  clearly  and  substantially  in  excess  of  such  par  value,  in  which  case 
such  excess  shall  be  treated  as  paid-in  surplus:  Provided  that  the  Com- 
missioner shall  keep  a  record  of  all  cases  in  which  tangible  property  is 
included  in  invested  capital  at  a  value  in  excess  of  the  stock  or  shares 
issued  therefor,  containing  the  name  and  address  of  each  taxpayer,  the 
business  in  which  engaged,  the  amount  of  invested  capital  and  net  In- 
come shown  by  the  return,  the  value  of  the  tangible  property  at  the  time 
paid  in,  the  par  value  of  the  stock  or  shares  specifically  issued  therefor," 
etc. 

MR.  BLACKMAN:  Yes,  we  considered  that  very  carefully.  We 
do  not  believe  it  has  any  application  to  the  present  situation.  The  asset 
we  acquired  originally,  and  which  every  mining  company  acquires  orig- 
inally, is  the  mine  and  not  the  part  of  the  mine  that  is  known,  but  the 
whole  mine,  and  appreciation  is  always  allowed  in  every  case  in  so  far 
as  the  appreciation  offsets  depreciation  from  other  causes.  The  rule 

How  Appreciation  Applies 

for  valuation  at  January  1,  1914,  absolutely  requires  that.  For  instance, 
if  you  had  a  building  that  fell  into  disrepair,  and  its  value  was  much 
reduced,  but  because  of  a  shortage  of  houses  and  a  general  demand  for 
real  estate,  it  sustained  an  increase  in  value;  and  suppose  that  this  hap- 
pened prior  to  January  1,  1914.  Of  course  in  such  case  the  valuation  on 
that  date  would  equalize  all  those  factors;  it  would  fix  the  worth  of  that 
property  at  that  time.  So,  we  say  the  valuation  of  the  mine  on  January 
1.  1914,  finds  the  worth  of  the  mine  at  the  time,  and  it  takes  into  account 
all  of  the  loss  which  the  mine  may  have  suffered  prior  to  that  time 
either  by  reason  of  its  depreciating  in  value  for  general  causes  or  because 
of  its  exhaustion,  or  part  exhaustion,  through  extraction  of  ores.  Every 
factor  is  included  when  yo»  have  a  valuation. 


130  REPORT  OF  PROCEEDINGS 

CHAIRMAN  ARMITAGE:  I  do  not  know  whether  I  quite  made  myself 
clear,  but.  it  seems  to  me  Article  55  is  inconsistent  with  the  Treasury's 
depletion  rule. 

MR.  GOWER:  No,  the  Department's  depletion  rule  about  which  we 
are  complaining  is  not  an  attack  upon  the  mine  itself,  it  is  an  attack  upon 
the  surplus  earnings.  For  instance,  in  the  case  I  cited  yesterday:  the 
company  had  $16,000,000  of  surplus  earnings,  and  the  Treasury  makes  an 
attack  on  those  eranings  and  not  on  the  mine  itself.  They  say  that  the 
$16,000,000  is  not  all  earnings,  but  $11.000,000  is  capital,  which  is  already 
allowed  for  in  the  mine's  valuation  of  $26,500,000. 

CHAIRMAN  ARMITAGE:  Then  I  do  not  know  whether  I  quite  under- 
stood Mr.  Blackman's  argument,  that  under  the  act  of  1917,  valuing  the 
property  and  determining  the  capital  stock,  we  were  bound  to  value  the 
property  as  of  January  1,  1914,  and  therefore  we  had  to  take  into  account 
both  depletion  and  appreciation,  and  the  Treasury  had  denied  you  appre- 
ciation in  charging  you  depletion;  wasn't  that  his  argument? 

MR.  BLACKMAN:  That  is  putting  it  in  one  way.  Of  course,  this 
company  in  question,  having  been  incorporated  with  a  small  par  value  of 
shares,  cannot  get  the  appreciation  usually  gained  by  the  company  that 
is  organized  with  watered  stock.  We  are  limited  by  the  arbitrary  pro- 
visions of  the  statute,  but  we  say  that  we  do  not  get  appreciation;  we 
must  get  appreciation,  and  every  company  must  get  appreciation,  so 
far  as  it  merely  offsets  depreciation  or  loss  of  any  kind.  We  cannot  claim 
any  value  above  that  we  started  with,  because  we  are  limited  by  those 
arbitrary  provisions  of  the  statutes,  but  we  cannot  be  beaten  down  below 
those  original  values  when  the  development  of  the  mine  has  kept  its 
value  constantly  above  that  original  value. 

MR.  T.  O.  McGRATH:  I  wish  to  bring  up  another  point,  one  relating 
to  appreciation.  I  have  a  chart,  which  was  prepared  for  the  Standardiza- 
tion Committee,  but  Mr.  Wilson  wanted  me  to  explain  it  in  emphasizing 
my  point.  Mr.  Gower  stated  yesterday  that  there  is  really  no  scientific 
basis  to  mine  accounting,  which  is  the  point  we  are  trying  to  bring  out  in 
the  Standardization  Committee — whether  there  is  a  scientific  basis  for 
standard  accounting,  and  if  there  is,  why  cannot  we  all  keep  together  on 
that  basis,  and  make  our  reports  in  such  shape  that  the  authorities  at 
Washington  can  study  them  without  unnecessary  delay.  T  drew  this 
chart  to  show  that  there  is  a  real  basis  for  mine  accounting.  [This  chart 
will  be  found  in  the  Standardization  proceedings.  Your  capital,  we  will 
say,  is  paid  in  either  by  capital  stock  or  by  borrowing  money;  you  take 
that  capital  and  use  it  for  your  operating  disbursements  and  your  pro- 
duction. You  sell  your  production  and  deliver  it,  creating  receipts  which 
are  afterwards  liquidated  by  cash,  and  that  same  capital  cash  is  used 
again  for  clearing  your  disbursements,  to  give  more  production,  more 
sales,  and  more  receipts.  At  the  end  of  each  operating  period  you  enter 
what  you  have  made  in  profit  or  loss;  you  take  your  receipts  for  that 
period,  your  depletion  and  depreciation,  and  put  it  in  your  profit  and  loss 


THE  AMERICAN  MINING  CONGRESS  131 

account.  The  appreciation  as  of  March  1,  1913,  is  something  contrary  to 
any  principle  that  was  ever  brought  forward  prior  to  that  date.  The 
Govenment  allows  you  on  March  1,  1913,  to  value  your  property  of  that 
date,  and  if  it  is  in  excess  of  your  investment  value  they  allow  you  to 
write  that  up  as  an  appreciation.  You  set  up  your  proper  appreciation 
reserve,  and  that  reserve  is  of  the  same  nature  as  a  tax  reserve  or  any 
other  reserve.  It  is  not  cash-surplus,  or  paid-in  capital;  it  is  a  book 
interest  which  the  Government  allows  you  to  record  as  appreciation. 

Departamental  Ruling  Tends  to  Uniform  Accounting 

There  is  one  very  important  point  which  I  wish  to  mention  in  making 
the  depletion  charge;  I  might  say  first  that  while  this  present  Federal 
law  is  complicated,  and  has  many  inconsistencies,  it  has  done  a  great 
deal  for  mine  accounting  in  bringing  it  down  to  a  uniform  basis,  and 
should  eventually  result  in  uniformity.  It  makes  you  divide  your  ex- 
penses and  segregate  those  expenses  which  do  not  belong  to  the  taxable 
period,  as  well  as  capital  and  asset  charges.  In  previous  times  it  was  all 
i3tit  into  one  sum,  and  what  was  left  over  was  called  profit.  The  Govern- 
ment will  not  allow  you  to  do  that  now.  In  charging  off  operating 
expenses  at  a  mine  at  the  end  of  a  year  you  also  charge  for  depletion, 
which  is  the  cost  of  the  product.  Depletion,  in  a  way,  is  nothing  but  the 
cost  of  your  goods.  The  Government  also  allows  you  to  deplete  appre- 
ciation under  Article  844,  Regulations  45;  you  are  allowed  to  deplete  that 
appreciation,  to  segregate  your  depletion  against  the  capital  which  you 
use  for  the  purpose  of  cost  and  your  depletion  of  appreciation  value;  you 
are  not  only  allowed  to  do  that,  but  you  are  allowed  to  use  that  appre- 
ciation value  for  invested  capital.  If  the  asset  charges  are  $1,000,000, 
and  on  March  1,  1913,  the  Government  allows  you  to  value  your  property 
at  $2,000,000,  say  your  tonnage  is  1,000,000,  the  Government  will  allow 
you  tc  charge  $1  against  every  ton  for  depletion  of  investment,  and  it  also 
allows  you  to  charge  $1  against  every  ton  for  depletion  of  appreciation. 
That,  as  it  is  realized,  can  be  used  as  invested  capital,  along  with  sur- 
plus and  original  capital  paid  in.  I  believe  only  one  or  two  accountants 
have  done  that  so  far;  but  in  the  case  of  some  of  the  larger  companies  if 
they  charge  appreciation  values  it  means  millions  of  dollars  they  can 
use  for  invested  capital.  To  my  knowledge  several  mines  have  not  used 
that  at  all;  it  would  save  them  thousands  of  dollars. 

CHAIRMAN  ARMITAGE:  Is  that  what  the  Treasury  Department  calls 
realized  appreciation? 

MR.  McGRATH:     That  is  realized  appreciation. 

MR.  DICK:  I  heard  Mr.  Gower's  paper  yesterday,  and  it  seems  to 
me  that  his  difficulty  is  that  he  does  not  recognize  the  fact  that  the  law 
does  not  permit  inclusions  of  appreciated  values  in  invested  capital. 
If  it  did,  you  would  have  your  discovery  values  and  your  development 
values  added  to  invested  capital  yearly.  Of  course  there  is  great  dis- 
cussion as  to  whether  or  not  a  taxpayer's  invested  capital  should  be 
valued  as  of  March  1,  1913.  The  law  does  not  permit  any  appreciated 


132  REPORT  OF  PROCEEDINGS 

value.  It  is  difficult  to  understand  why,  with  invested  capital  in  the 
beginning  of  the  period  worth,  say  $1,000,000,  and  every  foot  you  go  into 
the  ground  you  add  to  your  wealth,  that  your  invested  capital  should  be 
diminished;  nevertheless,  you  reduce  the  value  of  the  property  you 
owned  at  the  date  of  acquisition  by  every  ton  taken  from  the  ground. 
There  is  no  arguing  that  point,  regardless  of  what  that  value  was.  We 
say  the  value  was  a  million  dollars;  it  may  be  a  billion,  but  you  are 
permitted  a  million;  it  was  known  only  to  have  had  a  million  originally. 

Appreciation  and  Depletion  In  Mines 

Now,  what  you  did  after  that  to  make  it  worth  more  money  was  through 
development  or  discovery,  in  so  far  you  have  added  to  the  value  of  that 
property  through  appreciation.  Appreciation  is  not  permitted  except  as 
realized  through  your  depletion  account,  as  well  stated  by  Mr.  McGrath. 
Your  depletion  when  realized  as  a  profit,  as  a  gain,  will  go  into  your 
surplus.  Another  point  about  the  argument  is  that  it  seems  the  law 
recognizes  mining  as  a  wasting  of  industry — a  wasting  asset.  To  argue 
that  it  is  not  a  wasting  asset,  to  argue  that  all  income  is  profit,  would 
make  it  appear  that  this  depletion  is  a  method  by  which  the  Government 
is  giving  the  industry  something  it  is  not  entitled  to.  I  do  not  think  that 
the  Government  is  giving  anything  the  mine  is  not  entitled  to.  I  think 
mines  are  entitled  to  depletion ;  every  pound  of  ore  taken  from  the  ground 
diminishes  assets  by  that  extent.  Under  the  head  of  depletion  there  is 
a  deduction  from  income;  it  would  be  inconsistent  to  my  mind  not  to 
treat  it  in  such  a  manner  in  invested  capital,  but  whether  or  not  the  Gov- 
ernment should  recognize  appreciation  in  determining  invested  capital 
is  another  question.  That,  however,  is  the  law. 

MR.  GOWER:  In  the  course  of  Mr.  Dick's  remarks  he  made  one 
statement  which  is  the  foundation  of  his  orgument,  and  in  that  statement 
is  traversed  the  argument.  You  say  when  we  take  a  ton  of  ore  out  of 
the  mine  we  reduce  something.  We  reduce  a  value  of  some  kind;  that  is 
perfectly  true.  We  all  know  that  when  a  ton  of  ore  is  extracted  some- 
thing has  gone,  but  what  is  it?  Intrinsic,  latent,  economic  value  has  been 
depleted,  not  necessarily  the  commercial  value  which  was  allowed.  You 
have  depleted  something  which  is  not  allowed  to  us  as  invested  capital; 
if  you  allow  us  latent,  intrinsic,  economic  value  as  invested  capital,  your 
argument  would  hold.  You  allow  us  the  original  commercial  value  of 
the  mine.  Taking  a  ton  of  ore  out  of  the  ground  does  not  necessarily 
impair  that  commercial  value.  You  allow  us  the  commercial  value. 
When  you  can  show  me  that  lifting  a  ton  of  ore  impairs  the  commercial 
value,  the  argument  stands. 

MR.  DICK:  Your  invested  capital  at  the  date  of  acquisition  does  not 
take  into  account  any  appreciated  value  brought  about  by  development 
or  discovery.  It  is  worth  so  much  money;  that  is  what  the  definition  of 
invested  capital  is — cash  value  of  the  property,  regardless  of  what  is  in 
the  property,  of  which  we  know  not.  Later  development  will  tell,  but 
every  ton  of  ore  removed  certainly  decreases  your  investment.  You  may 


THE  AMERICAN  MIXING  CONGRESS  13.°, 

have  revealed  a  billion  tons  for  your  million ;  you  bought  it  on  the  assump- 
tion you  had  only  a  million,  but  every  ton  you  take  of  the  billion  tons 
leaves  one  ton  less. 

MR.  BLACKMAN:  Mr.  Dick,  I  spoke  on  some  of  the  points  you  have 
just  referred  to,  before  you  came.  I  will  briefly  state  this:  We  agree 
perfectly  that  Congresss  in  1916,  1917,  and  1918,  gave  the  mining  indus- 
try something  it  was  fairly  entitled  to  in  these  depletion  rules  which  were 
enacted  in  those  years;  but  we  say  that  although  Congress  gave  such  at 
that  time  does  not  authorize  you  to  apply  the  same  rule  backward,  but 
that  the  terms  of  the  act  of  1917  forbid  you  to  do  that.  In  1917  there 
were  a  number  of  provisions  covered;  one  of  these  was  the  ascertain- 
ment of  the  pre-war  profits.  Congress  says  that  pre-war  profits  must  be 
computed  according  to  the  laws  existing  in  the  years  in  which  those 
profits  were  earned,  and  you  must  compute  your  pre-war  profits  for  the 
year  1911  and  1912  according  to  the  law  in  effect  in  that  year.  That  was 
the  law  of  1909,  which  allowed  a  mining  company  no  deduction  for  deple- 
tion, and  you  must  estimate  and  compute  your  profits  for  1913  accord- 
ing to  the  law  of  1913,  which  allowed  a  maximum  of  5%.  In  calculating 
the  7  to  9%  deduction  it  must  be  done  so  in  that  way,  according  to  the 
plain,  precise,  language  of  Congress.  You  say  in  effect  that  your  profits 
for  1911  and  1912  for  one  purpose  were  one  thing,  and  for  another  pur- 
pose they  are  another  thing;  we  say  that  is  impossible.  Congress  said 
that  for  all  the  purposes  of  this  title  your  profits  for  1911,  1912,  and 
1913  are  according  to  the  laws  in  existence  in  those  years  under  which 
you  paid  taxes.  The  intent  of  Congress  was  perfectly  plain.  It  intended 

Profits  Claimed  and  Taxes  Payable 

to  allow  a  man  to  claim  as  profits  only  what  he  had  paid  taxes  oh,  and 
to  allow  him  to  claim  as  profits  all  that  he  had  been  required  to 
pay  taxes  on.  Under  the  laws  existing  at  that  time  the  mine  was 
required  to  pay  taxes  on  all  its  profits,  and  the  Stratton  case,  and  other 
cases  decided  prior  to  1917,  held  that  a  mine  was  taxable  on  all  of  its 
profits  without  deduction  for  depletion;  and  even  the  Supreme  Court,  in 
another  case  where  it  was  shown  that  the  ore  was  on  the  surface  and 
exactly  what  portion  of  that  total  quantity  had  been  used  up  each  year, 
said  this  is  a  mine  and  this  company  is  not  entitled  to  any  depletion 
because  mines  do  not  get  depletion  under  the  accustomed  rules.  Legisla- 
tion has  always  generally  regarded  the  income  from  a  mine  as  the  total 
revenues  from  the  sale  of  its  product  less  its  expenses,  and  has  always 
taxed  it  on  that  basis.  In  all  Western  States,  where  they  use  income  and 
profits  for  five  years  past  to  three  years  past  in  determining  the  value 
for  local  taxation,  that  they  never  allow  a  dollar  for  depletion.  We  say 
that  the  explicit  terms  of  the  act  forbid  you  from  deducting  any  deple- 
tion in  1911  and  1912,  and  more  than  5%  in  1913.  but  we  go  further  and 
we  say  that  such  was  the  plain  intent  of  Congress,  that  profits  should  be 
considered  according  to  the  law  in  existence  at  the  time  those  profits 
were  made.  The  law  in  existence  at  the  time  mining  profits  were  made 
from  Adam  down  to  1917  was  that  there  was  no  deduction  for  depletion, 


m  REPORT  OF  PROCEEDINGS 

and  that  a  mine  was  taxable  and  therefore  could  get  the  benefit  of  profits, 
where  such  a  thing  was  a  benefit,  without  any  deduction  for  depletion. 

Appreciation  to  Offset  Depreciation 

When  it  comes  to  a  question  of  appreciation,  the  law  allows  appre- 
ciation where  it  is  an  appreciation  to  make  good  a  depreciation.  You  do 
that  in .  every  case  where  you  have  a  valuation — a  valuation  necessarily 
does  that.  Supposing  a  property  had  depreciated  so  much  that  it  was 
worth  practically  nothing  in  1910,  but  by  some  extraneous  circumstances 
its  value  was  enormously  increased  from  1910  to  1914,  the  re-valuation 
on  January  1,  1914,  would  allow  that  appreciation.  It  would  only  say, 
and  that  is  all  that  Congress  says,  that  appreciation  must  stop  at  the 
point  where  you  reach  your  original  value.  You  cannot  go  above  that; 
we  will  not  allow  net  appreciation;  we  will  allow  it  to  offset  depreciation. 

MR.  HOLMES:  That  last  remark  of  Mr.  Blackman,  I  think,  is  pecu- 
liarly applicable  to  the  law  of  1917,  and  not  to  that  of  1918. 

MR.  BLACKMAN:     Yes,  that's  the  law  we  are  discussing. 

MR.  HOLMES:  That  last  remark  of  Mr.  Blackman,  I  think,  is  pecu- 
Departments  have  reached  which  will  have  to  be  judicially  determined. 
I  believe  the  Treasury  is  quite  fixed  in  its  ideas  of  not  recognizing  appre- 
ciation in  any  manner,  except  as  specifically  authorized  by  the  law  of 
1917.  For  instance,  to  recognize  appreciation,  you  have  this  situation 
in  the  case  of  an  operating  mine  having  1,000,000  tons  of  ore  at  the  time 
it  was  acquired,  and  discovering  no  additional  ore  reserves:  You  would 
have  to  take  into  consideration  a  diminution  of  the  investment  arising 
i'rom  the  very  production  which  produces  the  income.  A  mine  adjoining 
it  may  be  purchased  at  the  same  time,  and  have  the  same  amount  of  ore 
and  may  subsequently  discover  greater  orebodies.  The  Department  can- 
not see  its  way  clear  to  recognize  those  greater  orebodies  directly  or  in- 
directly because  it  feels  that  the  concept  of  the  law,  the  excess-profits  tax 
law,  was  to  allow  as  invested  capital  the  amount  actually  contributed  by 
the  stockholders  to  the  enterprise,  plus  the  amounts  indirectly  con- 
tributed to  the  enterprise;  that  is,  the  dividends  earned  but  not  paid  out, 
and  kept  in  the  business.  I  think  that  both  Mr.  Gower's  and  Mr.  Black- 
Implication  Not  Allowed  in  Taxation 

man's  arguments  on  this  very  strong  from  a  technical  point  of  view; 
that  is,  in  the  construction  of  the  statutes.  Since  the  courts  have  laid 
down  the  rules  that  nothing  will  ever  be  implied,  that  the  tax  statutes 
will  never  be  extended  by  implication,  they  will  always  be  construed 
in  favor  of  the  taxpayer  where  there  is  any  question  of  doubt  as  to  the 
construction,  and  there  is  enough  uncertainty  and  ambiguity  in  the  law 
to  raise  a  grave  question  of  doubt  here  as  to  the  meaning  of  the  statute. 
So  that  the  argument  we  heard  in  favor  of  allowing  this,  is,  in  my  opinion, 
very  strong  on  those  technical  grounds  of  the  construction  of  the  statutes ; 
but  I  feel  on  the  other  hand  that  the  Department's  position  is  extremely 
strong  from  an  administrative  point  of  view,  and  I  feel  there  would  be 


Till:  AMERICAN  MINING  CONGRESS  1ST, 


nothing  gained  from  the  Department  on  this  point.  It  has  been  the 
Department's  consistent  position  right  along  that  it  will  not  directly 
recognize  appreciation,  and  the  recognition  of  this  situation  would  be  to 
recognize  indirectly  the  effect  of  appreciation.  I  merely  wanted  to 
state  this,  and  hope  it  may  clarify  the  discussion  a  little. 

CHAIRMAN  ARMITAGE:  I  think  the  fallacy  in  Mr.  Dick's  argu- 
ment is  this:  He  fails  to  distinguish  between  property  we  are  valuing 
and  tonnage.  The  law  does  not  say  you  must  value  the  tonnage  of  a 
mine  in  1914  or  1913,  or  when  it  was  originally  contributed;  it  says  you 
must  value  the  property,  and  that  the  value  of  that  property  is  the  meas- 
ure of  the  invested  capital  when  it  is  contributed  to  the  stock  of  the  com- 
pany. If  we  ignore  the  tonnage  and  value  the  property,  we  immediately 
get  away  from  the  difficulty  of  depleting  that  tonnage.  Even  though 
there  had  been  an  actual  accretion  to  the  tonnage  in  the  interval,  the 
value  of  the  property  has  remained  constant,  and  it  is  the  property  we 
are  valuing  and  not  a  particular  quantity  of  tonnage  in  the  year  in  ques- 
tion. It  seems  to  me  that  is  the  fallacy  of  the  argument.  The  law  is 
quite  clear;  I  looked  it  up  while  Mr.  Dick  was  discussing  the  question, 
and  it  uses  the  word  property  in  each  case;  it  says  actual  cash  value  of 
tangible  property  paid  in  for  stock — that  is  the  same  phrase  as  in  the 
law  of  1917 — in  which  case  we  are  valuing  property,  and  if  we  can  show 
that  there  has  been  no  depletion  in  that  property  by  reason  of  the  tons  <  of 
ore  taken  out,  because  coincident  with  that  depletion  there  has  been  a 

How  the  Department  Views  a  Mining  Property 

corresponding  accretion,  the  argument  fails.  In  other  words,  the  Depart- 
ment looks  upon  a  mining  property  on  a  certain  date  as  a  heap  of  ore 
which  is  exposed.  Of  course  there  could  be  no  answer  to  the  argument 
that  as  you  sell  that  ore  you  deplete  that  value,  but  such  is  not  true;  it  is 
not  the  proper  aspect  with  which  to  view  a  mining  property.  It  is  a 
property,  and  in  it  we  have  uncovered  or  discovered  a  certain  quantity 
of  ore,  and  there  is  a  certain  quantity  we  do  not  know  anything  about. 
If  we  have  uncovered  just  as  much  as  we  have  depleted  it  the  value  of 
the  property  is  not  changed.  I  cannot  see  an  answer  to  that  argument, 
and  I  fail  to  see  that  the  Department  meets  that  by  saying  we  neces- 
sarily have  depleted  the  property.  We  have  not  depleted  the  value  of 
the  property,  which  is  the  real  point:  Have  we  depleted  the  value  of 
that  property?  Let  us  assume  that  a  mine  at  the  date  of  valuation,  that 
is,  at  the  date  of  contributing,  with  1,000,000  tons  in  sight,  and  it  un- 
covers a  similar  quantity  on  a  lower  level,  and  then  between  1910  and 
1917,  the  period  in  question,  it  proceeds  to  sell  the  new  ore  and  not  the 
old  ore;  what  would  the  Treasury  Department  do  with  that  case?  We 
have  on  hand,  and  blocked  out,  the  identical  tonnage  we  have  in  1910, 
t.nd  all  we  have  sold  is  the  new  ore.  Would  the  Department  in  that  case 
say  we  must  deplete  the  mine?  That  shows  the  fallacy  of  attempting 
to  value  the  property  as  a  tonnage  and  not  as  a  piece  of  property.  They 
would  say  we  have  not  depleted  that  mine,  because  we  have  not  taken 
out  one  dollar  of  the  original  tonnage;  all  we  have  mined  is  the  other 


136  REPORT  OF  PROCEEDINGS 

A  Reverse  Condition 

tonnage.  If  we  look  upon  the  property,  the  property  value  has  remained 
unchanged,  and  the  answer  is  simply  we  have  not  depleted  the  value  of 
the  mine.  If,  instead  of  mining  the  new  tonnage  we  had  mined  the 
old  tonnage,  the  property  value  has  continued  and  we  have  not  depleted 
the  mine.  After  all,  what  we  are  dealing  Math  here  is  not  a  question  of 
accounting,  is  not  a  question  of  business  practice,  but  a  technical  ques- 
tion of  the  construction  of  the  act — a  legal  proposition.  What  dees  this 
act  mean  as  applied  to  the  taxpayer?  The  Government  has  passed  a  cer- 
tain law;  Congress  has  passed  a  certain  law,  and  it  says  under  that  law, 
the  taxpayer  owes  a  certain  amount — that  is  a  legal  question,  and  is  not 
a  question  of  accounting  or  businesss  practice.  Let  us  see  what  the  law 
is:  The  Government  says  that  the  mine-owner  must  deplete  from  the 
value  of  his  property  prior  to  the  date  when  he  was  allowed  depletion 
under  the  law;  that  is  the  position  it  takes.  Prior  to  1913  there  was  no 
allowance  in  the  income-tax  laws  for  depletion.  Mine-owners  came  before 
the  courts  and  disputed  the  Government  attitude  on  that  question.  I 
do  not  quite  agree  with  Mr.  Black  man  and  Mr.  Gower  that  it  has  been 
the  universal  mining  practice  in  accounting  not  to  claim  depletion  in 
mines;  I  think  that  practice  is  more  or  less  uncertain.  I  think  there 
was  a  strong  feeling  among  miners  prior  to  that  date  that  they  were 
entitled  to  depletion  but  they  came  before  the  courts  in  the  Stratton's 
Independence  case  and  claimed  depletion;  they  urged  that  before  the  law 
should  impose  a  tax  on  their  income  there  should  be  deducted  from  it  an 

The  Government's  Position 

element  of  capital,  and  that  capital  was  depletion.  The  Government  took 
the  position  that  such  was  not  so;  but  said  that  all  of  these  are  profits — 
that's  the  rule,  that's  the  law,  that's  the  accounting  practice.  The  Gov- 
ernment has  laid  down  the  law  for  itself;  it  has  established  that  law,  and 
it  should  be  held  to  that  law.  A  few  years  elapse,  and  the  interest  of 
the  Government  is  upon  the  other  side.  The  question  of  determining 
invested  capital  comes  up,  and  the  Government's  contention  is  that  it 
shall  reduce  that  invested  capital  by  depletion  in  values  from  years  when 
it  said  the  miner  was  not  entitled  to  depletion,  and  it  went  to  the  Su- 
preme Court  in  a  ruling  that  they  were  not  entitled  to  depletion.  I  say 
in  justice  and  in  reason  that  the  Government  should  be  held  to  the  rule 
it  has  laid  down;  that  is,  the  miner  is  not  entitled  to  depletion  in  those 
years.  Such  is  the  established  rule  on  the  subject,  and  I  have  yet  to  see 
any  answer  to  that  proposition  as  a  matter  of  technical  law,  as  a  mat- 
ter of  equity  and  justice.  The  Government  might  have  taken  the  other 
position;  it  might  have  said  of  course  there  is  an  element  of  capital, 
:\nd  the  miner  is  entitled  to  depletion,  and  of  course  we  are  going  to 
allow  it  prior  to  1913.  If  it  had  allowed  it  there  would  be  no  answer  to 
its  position  today,  but  it  took  the  other  position,  because  it  meant  more 
income  and  more  taxes.  Then  it  fought  the  matter  with  the  courts  and 
won.  It  is  an  established  principle  of  law  that  when  two  parties  have 
litigated  a  subject  which  has  been  decided,  decision  is  final  between  those 


THE  AMERICAN  MIXING  CONGRESS  187 

A  Once  Favorable  But  Later  Disliked  Decision  Cannot  Be  Reversed 

two  parties,  no  matter  which  way  it  cuts;  and  thereafter  it  is  not  for 
the  plaintiff  who  has  won  in  that  case  upon  a  certain  set  of  facts  and 
upon  certain  law  that  he  has  established,  to  claim  subsequently  in  the 
same  litigation  between  those  same  parties  that  he  was  wrong  and  that 
decision  was  wrong,  because  in  subsequent  years  he  may  not  like  that 
decision.  The  Government  has  laid  down  the  law:  it  cannot  change  it 
now,  because  it  suits  its  convenience  and  it  gets  more  taxes.  I  cannot 
see  any  answer  to  that  argument;  more  has  been  advanced  here,  and  I 
have  not  seen  any  Government  official  able  to  answer  it. 


Mr.  Robert  N.  Miller  will  now  discuss  certain  phases  of  the  law. 
[Mr.  Miller's  address  will  be  found  on  page  683  of  the  Proceedings.] 


CHAIRMAN  ARMITAGE:  I  think  Mr.  Miller  occupies  a  fortunate  and 
agreeable  position  in  that  he  has  seen  both  sides  of  this  subject  inti- 
mately— from  the  Department's  side,  the  difficulties  and  troubles  ifc  meets, 
and  he  is  now  beginning  to  experience  the  outside  view,  the  view  of  the 
lawyer  practicing  before  the  Department.  He  is  beginning  to  realize 
that  it  is  not  necessary  for  a  lawyer  to  be  consistent — and  that  he  may  be 
fighting  on  both  sides  of  the  case  sometimes  at  the  same  time. 

MR.  C.  A.  FISHER:  I  feel  like  adding  a  word  to  what  Mr.  Miller  said. 
Ic  seems  to  me  that  much  he  has  said  is  true,  and  it  is  a  practical  light 
on  this  whole  question.  I  also  have  been  on  both  sides  of  the  force  in 
this  matter;  I  have  worked  as  an  Internal  Revenue  agent  for  a  short 
time,  with  not  nearly  as  much  experience  as  Mr.  Miller.  It  has  been  my 
experience  that  when  you  present  your  case,  if  you  will  go  to  Washing- 
ton with  an  abundance  of  facts,  and  then  go  to  the  men  who  have  to 
study  them  you  certainly  will  generally  get  fair  treatment,  if  you  take 
the  attitude  that  they  are  trying  to  work  out  a  bad,  inconsistent  situa- 
tion in  the  best  way  possible. 

CHAIRMAN  ARMITAGE:  Last  May  the  American  Mining  Congress, 
in  conjunction  with  the  American  Petroleum  Institute  and  the  National 
Industrial  Conference  Board,  held  a  tax  conference  in  Chicago  which 
resulted  in  the  appointment  of  a  Committee  to  discuss  questions  of  Fed- 
eral taxation.  That  committee  was  enlarged  and  worked  during  the 
summer,  and  it  has  recently  drafted  and  isseud  a  tentative  report — 
which  is  here — of  their  suggestions  and  plans.  I  will  ask  Mr.  R.  C.  Allen, 
who  was  a  member  of  the  Committee,  if  he  will  briefly  summarize  the 
substance  of  their  recommendations. 

MR.  ALLEN:  The  report  has  been  printed,  and  is  available  to  all  of 
you.  I  trust  that  each  will  acquire  a  copy,  and  give  it  some  attention. 

Report  of  Joint  Committee  on  Taxation 

The  Committee  was  organized  in  May,  1920  and  has  been  actively  at 
work  during  the  trying  to  find  some  reasonable  method  of  revision  of  the 


138  REPORT  OF  PROCEEDINGS 

present  tax  system.  In  addition  to  utilizing  all  the  talent  and  experi- 
ence of  the  Committee  members  themselves^  it  has  had  the  assistance 
of  a  number  of  the  best  experts  in  the  country,  including  Dr.  T.  S.  Adams, 
Mr.  Geo.  Holmes,  Col.  Montgomery,  Professor  Haig,  Mr.  Kahn  (the  bank- 
er) and  others.  Briefly,  it  has  made  an  attempt  to  bring  the  best  thought, 
talent,  and  experience  available  to  bear  on  this  difficult  and  intricate 
subject.  The  report  as  presented  will  not  be  satisfactory  to  all  classes 
of  taxpayers.  It  is  not  satisfactory  to  the  members  of  the  Committee, 
nor  those  particular  classes  of  taxpayers  and  organizations  that  they 
represent.  A  measure  of  this  sort  must  always  contain  an  element  of 
compromise;  so,  in  presenting  the  report  I  wish  to  say  on  behalf  of  the 
Committee  that  it  merely  represents  what,  in  their  opinion,  is  best  to  be 
done  under  all  the  circumstances  as  we  understand  them  to  meet  the 
fiscal  requirements  of  the  Government. 

How  Much  Money  is  Required 

The  fiscal  problem  confronting  the  Committee  was  this:  What  is  the 
sum  total  of  taxes  to  be  raised?  The  consideration  of  any  tax  system 
must  start  right  there.  After  careful  consideration  of  this  question,  the 
Committee  came  to  the  conclusion  that  any  plan  now  devised  should 
provide  for  raising  the  revenue  which  would  be  raised  under  existing 
statutes.  We  do  not  know,  and  we  could  not  assume  what  Congress  is 
going  to  do  about  the  public  debt.  So,  in  our  opinion,  any  tax  system, 
which  is  proposed  for  the  consideration  of  Congress,  should  provide  for 
raising  that  amount  of  revenue  which  would  be  raised  and  has  been 
raised  under  the  existing  statutes.  If  Congress  sees  fit  to  reduce  the 
sum  total  of  taxes,  a  reduced  amount  of  taxes  may  be  raised  under  the 
plan  offered  by  the  Committee;  so  in  reading  this  report,  that  should 
be  remembered.  Since  the  printing  of  this  tentative  report,  the  Com- 
mittee has  received  considerable  criticism  from  various  classes  of  tax- 
payers  and  other  individuals,  who,  with  one  accord,  criticise  the  Com- 
mittee for  not  recommending  a  reduction  in  taxes.  Our  answer  to  that 
is  that  a  reduction  of  taxes  is  a  problem  which  is  not  properly  before  this 
Committee,  or  any  other  such  committee.  It  is  a  problem  for  Congress 
itself  to  solve;  we  do  not  attempt  to  solve  it.  We  hoped  that  our  work 
would  have  a  maximum  usefulness  if  we  did  present  a  plan  which,  in 
its  application,  would,  if  necessary,  raise  the  revenue  now  being  raised 
under  existing  statutes. 

Income  Profits  and  Sales  Taxes 

The  second  main  conclusion  of  the  Committee  was  this:  That  the  bulk 
of  the  revenues  must  continue  to  be  raised  from  income  and  profits.  No 
other  question  that  came  before  the  Committee  received  so  much  thought 
;md  investigation  as  the  proposal  to  raise  the  bulk  of  the  revenues  by 
consumption  taxes;  in  short,  the  sales  tax.  Day  after  day  we  listened  to 
the  most  able  and  active  proponents  of  the  sales  tax,  and  in  the  begin- 
ning all  of  the  members,  I  think,  with  one  exception,  were  sympathetic 
toward  such  a  tax.  We  looked  upon  it  with  great  hopefulness:  we  thought 
that  it  might  provide  a  practical  and  equitable  means  of  more  broadly 


THE  AMERICAN  MINING  CONGRESS  13!> 

distributing  the  burden  of  taxation.  But  after  months  of  consideration 
and  investigation,  the  committee,  with  one  exception,  came  to  the  con- 
clusion that  the  sales  tax  would  not  do.  I  won't  undertake  now  to  can- 
vass the  arguments  pro  and  con;  we  have  printed  them  in  this  report;  I 
merely  invite  your  attention  to  them.  Nevertheless,  we  do  believe  in  a 
broadening  of  the  present  basis  of  taxation.  We  do  not  believe  that  the 
entiie  fiscal  system  of  the  Government  should  be  or  can  be  dependent 
upon  income  and  profits.  This  Committee  believes  in  the  principle  of  the 
income  tax,  and  our  conclusion  is  that  the  bulk  of  the  revenues  must 
continue  to  be  raised  by  taxes  on  incomes  in  one  way  and  another.  But 
we  do  conclude,  as  I  said  before,  that  a  much  larger  proportion  of  the 
revenue  should  be  raised  from  other  sources.  Therefore,  we  proceeded 
to  a,  plan  that  would  reduce  the  sum  total  of  revenue  to  be  raised  from 
income  taxes,  which  would  increase  the  relative  amount  of  revenue  to  be 
raised  from  other  sources.  A  third  conclusion  was  that  the  excess- 
profits  tax  should  be  abolished  altogether.  On  that  conclusion  the  Com- 
mittee has  the  support  of  almost  the  entire  country.  During  our  con- 
sideration of  the  whole  subject  we  met  with  no  support  for  the  reten- 
tion of  the  excess-profits  tax;  therefore,  our  first  recommendation  is  the 
abolition  of  that  tax  entirely.  It  is  not  necessary  for  me  now  to  review 

Loss  By  Abolishing  Excess-Profits  Tax 

the  reasons  why  the  Committee  makes  this  recommendation;  I  think 
they  are  familiar  to  all  of  you.  However,  when  we  abolish  the  excess- 
profits  tax,  we  face  a  reduction  in  the  revenue  of  $900,000,000,  more  or 
less.  In  this  connection  I  may  say  that  all  of  the  estimates  used  by  the 
the  Committee  are  those  of  Mr.  McCoy  of  the  Bureau  of  Internal  Reve- 
nue, the  gentleman  who  makes  these  estimates  for  the  Committees  of 
Congress  and  for  the  guidance  of  the  Treasury  Department.  Since  this 
estimate  of  loss  was  made  it  appears  that  perhaps  the  figure  is  some- 
what high;  in  other  words,  the  repeal  of  the  excess-profits  tax  will  lose 
us  somewhat  less  than  $900,000,000,  due  to  the  fact  that  the  tax  is  failing. 
Whether  repealed  or  not,  some  additional  sources  of  revenue  must  be 
found  as  that  tax  cannot  be  depended  upon  to  produce  the  revenue  it  has 
produced  during  the  war  years  and  1919.  Secondly,  we  believe  strongly 
that  the  surtax  on  individuals  should  be  reduced.  Here  again  I  may  not 
stop  to  review  all  the  reasons  why  we  came  to  that  conclusion;  but  I 
think  all  of  us  are  convinced  that  surtaxes  which  mount  up  to  50,  60, 
and  1Q%  of  the  income  of  the  individual  are  so  repressive  that  in  their 
effect  they  tend  to  dry  up.  and  eventually  do  dry  up,  important  sources 
of  taxable  income.  Income  today  is  seeking  a  safe  haven,  which  is  found 
in  tax-exempt  securities,  billions  of  which  are  abroad  in  the  land  and 
which  are  being  issued  month  after  month  in  ever-increasing  amounts. 

These  securities  are  absorbing  incomes  that  otherwise  would  be 
taxed  under  the  surtax  rates.  A  further  consequence  is  that  this  income 
is  withheld  from  productive  enterprise.  Therefore,  it  seemed  to  us,  as 
a  measure  of  pure  economics,  disregarding  all  arguments  which  may  be 
based  on  other  considerations,  a  reduction  of  the  surtax  is  wise.  How 


140  REPORT  OF  PROCEEDINGS 

then,  to  reduce  the  surtax  rates?  Shall  we  make  a  general  assault  on 
the  rates  as  they  now  stand?  Shall  we  reduce  the  rates  as  they  now  stand 

How  to  Reduce  Rates 

by  a  percentage  cut  all  along  the  line  by  re-adjusting  the  brackets  on 
some  other  basis,  or  how  shall  we  effect  this  reduction?  That  matter  oc- 
cupied the  attention  of  the  Committee  for  a  long  time,  and  after  consider- 
ing all  of  the  various  expedients  we  finally  hit  upon  this:  That  such  por- 
tion of  the  income  of  the  individual  which  is  spent  and  used  by  him  shall 
be  subject  to  the  surtax  rates  as  they  now  stand;  but  that  portion  of  the 
income  of  the  individual  which  is  saved  by  him  and  re-invested  in 
income-tax  producing  property  shall  pay  a  surtax  rate  less  than  the  rates 
now  imposed  on  such  income.  In  other  words,  we  think  it  is  now  time 
to  place  the  emphasis  on  thrift  and  saving,  rather  than  waste  and 
extravagance.  The  provision  made  at  the  last  meeting  of  the  Commit- 
tee early  in  November,  1920,  is  this:  The  surtax  on  that  portion  of  the 
saved  and  re-invested  income  of  the  individual  shall  be  reduced  by  one- 
third,  in  no  case  to  exceed  20%  thereof.  The  provision  as  it  now  stands 
is  based  upon  the  idea  that  the  present  surtax  does  not  bear  heavily 
enough  on  incomes  up  to  $50,000;  in  fine,  if  we  were  to  revise  the  sur- 
tax rates  as  they  now  stand,  maintaining  the  present  rates  in  the  upper 
brackets,  .we  would  revise  the  rate  in  the  lower  brackets  so  that  they 
would  rise  more  rapidly  on  incomes  up  to  $50,000.  Therefore,  the  first 
provision  was  that  the  saved  and  re-invested  income  of  the  individual 
would  be  subject  to  surtax  not  exceeding  20%.  This  is  no  reduction  from 
the  present  surtax  individuals  having  incomes  up  to,  say  $50,000.  Frankly. 
Aye  amended  this  provision  because  we  believe  that  it  is  politically  ex- 
pedient, and  that  the  former  or  revised  plan  is  politically  inexpedient, 
if  not  politically  unattainable.  What  we  are  trying  to  do  is  to  reduce  the 
surtax  rates,  and  to  do  this  we  must  offer  a  plan  that  is  politically  ex- 
pedient—something that  Congress  can  adopt,  something  that  is  within 
the  range  of  political  possibility.  Since  the  revision  of  which  I  have 
spoken,  the  question  has  been  re-opened,  and  there  is  some  possibility 
that  the  Committee  will  revert  to  the  first  plan.  If  we  do  this  thing 
under  the  first  plan  we  will  lose  another  $230,000,000  in  revenue. 

Total  Losses  Expected 

The  third  main  recommendation  of  the  Committee  is  this:  That  the 
provision  for  net  losses  first  introduced  in  the  act  of  1918  shall  be  ex- 
tended to  prior  years  and  succeeding  years,  and  made  a  general  principle 
of  the  income  tax.  If  Congress  should  adopt  that  recommendation  we 
would  lose,  it  is  estimated,  another  $500,000,000;  and  if  all  three  of  thesi 
recommendations  were  adopted  by  Congress  we  would  lose  $1,180,000,000. 
In  other  words,  the  net  effect  of  these  recommendations  is  to  take  $1,- 
180,000,000  out  of  present  income  taxes.  The  next  question  is  now,  how 
can  we  replace  this  sum?  We  estimate  that  the  provisions  of  the  Cum- 
mins-Esch  Bill  will  result  in  increased  taxes  paid  by  transportation  in 
tne  amount  of  $148,000,000.  Therefore,  the  net  reduction  in  present  in- 


THE  AMERICAN  MINING  CONGRESS  141 

come  taxes  is  $1,032,000,000.  The  Committee  has  proposed  a  number  of 
alternative  methods  of  raising  this  money.  It  was  our  opinion  first  that 
we  ought  to  select  for  taxation  a  number  of  commodities  of  general  use 
and  consumption,  and  we  did  select  tentatively  gasoline,  sugar,  coffee, 
and  tea  for  such  taxes;  but  this  proposal  was  met  by  a  storm  of  protest. 

Breakfast -Table  Taxes 

The  country,  it  is  said,  does  not  like  "breakfast-table  taxes,"  and  oil 
people  do  not  like  the  gasoline  tax.  The  Committee  likes  them  for  the 
very  reasons  on  which  they  are  opposed,  perhaps,  by  the  majority  of  the 
people.  We  think  that  every  individual  making  a  living  in  this  country 
ought  to  contribute  something  to  his  Government,  and  that  he  ought 
to  know  that  he  contributes.  Taxation  makes  good  citizens;  it  makes 
responsible  citizens.  We  have  suggested  also  taxes  on  automobiles  and 
trucks — a  tax  of  50  cents  per  horsepower.  We  recommend  also  that 
there  be  an  increase  in  the  so-called  luxury  taxes;  in  other  words,  with 
respect  to  certain  commodities  that  we  term  luxuries  there  is  a  point  in 
taxation  where  you  get  the  maximum  revenue.  Our  plan  is  to  tax  the 
non-essential  commodities  to  the  point  where  we  will  get  the  maximum 
revenue  out  of  them.  Tobacco  is  a  good  illustration;  the  consumption 
of  cigarettes,  chewing  tobacco,  and  smoking  tobacco  goes  merrily  upward 
despite  the  tax.  Liquor,  which  has  gone  now,  was  the  same  kind  of  a 
commodity;  the  tax  did  not  decrease  the  consumption.  There  has  been 
a  slight  decrease  in  the  use  of  cigars.  Perhaps,  then,  we  ought  not  to 
put  more  tax  on  the  cigar,  because  if  we  do,  we  will  lose  money  by  it; 
but  we  can  put  more  tax  on  other  forms  of  tobacco.  Let  us  put  it  on  to 
the  point  where  we  will  get  the  maximum  revenue  because  these  are  non- 
essentials;  they  are  luxuries,  and  the  individual  need  not  pay  the  tax  if 
he  chooses  not  to  do  so.  He  can  get  along  without  such  things;  but  he 
does  not  want  to,  and  that  is  why  the  tax  is  so  productive. 

Another  recommendation  is  to  increase  the  rate  on  first-class  postage 
from  two  cents  to  three  cents.  That  has  not  been  very  severely  criticised. 
Another  suggestion  is  to  quadruple  the  stamp  tax.  Mr.  Kahn  suggests  in 
addition  a  stamp  tax  on  checks. 

Income  Tax   on   Corporations 

But  the  most  important  of  these  recommendations  is  the  increase  of 
the  income  tax  on  corporations.  In  considering  the  surtax  on  the  indi- 
vidual on  the  one  hand,  and  the  surtax  on  the  corporation  on  the  other 
hand,  the  aim  has  been  to  preserve  a  sort  of  balance  between  the  two 
because  the  fact  is  that  the  partnership,  the  sole  owner  and  the  personal 
service  corporation  are  in  competition  with  the  corporation;  there  ought 
to  be  some  approach  to  equality  of  Income  taxation  as  between  the  two 
classes.  There  is  not  any  precise  method  of  getting  at  this  equalization. 
Suggestions  were  made  to  fix  the  corporation  income-tax  rate  at  all  the 
way  from  12  to  20%.  The  rate  agreed  upon  was  16%  on  incomes  of 
corporations,  and  this  is  coupled  with  the  recommendation  to  abolish  the 
exemption  of  $2000  altogether. 


142  REPORT  OF  PROCEEDINGS 

As  a  net  result  of  all  these  proposals,  if  adopted,  we  can  raise  $1.- 
293,000,000  which  quite  offsets  the  reduction  of  $1,100,000,000  arising  from 
the  repeal  of  the  excess-profits  tax,  reduction  of  the  surtaxes  on  indi- 
viduals, and  the  extension  of  the  net  loss  provision. 

We  have  taken  the  trouble  to  condemn  certain  other  taxes,  which 
have  received  a  good  deal  of  support  in  certain  quarters.  One  of  those 
is  the  Ralston-Nolan  Bill,  which  proposes  a  tax  on  the  privilege  of  hold- 
ing land — a  pet  measure  of  single-tax  advocates.  That  we  have  strongly 
condemned.  Another  proposal  against  which  the  Committee  has  set  its 
face  is  the  proposal  to  levy  a  tax  on  the  undistributed  earnings  of  cor- 
porations. 

I  ask  you  to  give  the  subject  of  this  tentative,  report  your  earnest 
though  and  attention,  and  to  wire  your  criticisms  to  the  National  Indus- 
trial Conference  Board,  10  East  39th  Street,  New  York.  This  Committee 
will  hold  its  last  meeting  on  November  20.  We  are  then  going  to 
close  this  report.  It  will  be  printed  and  will  be  circulated  throughout 
the  country.  The  Committee  will  give  careful  attention  at  the  end  of 
this  week  to  further  criticisms  which  it  may  receive,  and  we  solicit  those 
criticisms  from  just  such  people  as  are  here  this  morning. 

CHAIRMAN  ARMITAGE:  Gentlemen,  what  is  your  pleasure  in  refer- 
ence to  this  report? 

MR.  ROBERT  G.  WILSON:  I  should  like  to  make  a  motion  that  the 
tentative  report  of  the  Tax  Committee  of  the  National  Industrial  Con- 
ference Board  be  given  the  widest  circulation  and  publicity  by  the  Ameri- 
can Mining  Congress,  with  the  request  that  all  of  its  members  com- 
municate their  criticisms,  suggestions,  and  recommendations  as  quickly 
as  possible  to  the  Tax  Committee  of  the  Mining  Congress,  at  Washing- 
ton, D.  C.,  to  be  brought  by  the  Tax  Committee  of  this  Congress  before 
the  next  meeting  of  the  Allied  Tax  Committee  for  consideration. 

(Motion  unanimously  carried.) 

CHAIRMAN  ARMITAGE:  The  Allied  Conference,  consisting  of  the 
American  Petroleum  Institute,  American  Mining  Congress,  and  National 
Industrial  Conference  Board,  is  to  have  a  final  meeting  in  January,  1921. 
the  date  of  which  will  be  announced  later.  The  Mining  Congress  will  see 
that  you  all  get  ample  advice  of  the  date  of  that  meeting,  and  at  that 
meeting  this  report  is  to  be  taken  up  and  discussed. 

MR.  MACBETH:     What  is  the  Business  Men's  Tax  Association? 

CHAIRMAN  ARMITAGE:  The  Business  Men's  Tax  Association  is  a 
group  of  retailers  and  manufacturers  who  are  advocating  a  general  turn- 
over or  sales  tax.  Mr.  Rothschild  and  various  members  of  that  associa- 
tion were  heard  before  the  Committee,  and  are  strong  in  their  advocacy 
of  this  general  turnover.  Do  you  know,  Mr.  Allen,  the  exact  make-up 
of  that  Committee? 

MR.  ALLEN:  That  Committee  has  a  heterogeneous  membership, 
mainly  composed  of  manufacturers  of  small  articles,  such  as  jewelry  and 


THE  AMERICAN  MINING  CONGRESS  143 

things  of  that  kind,  which  are  now  taxed;  but  it  also  has  a  very  wide 
clientele.  The  fact  is  there  is  a  great  deal  of  sentiment  in  the  country 
for  the  sales  tax,  and  there  is  no  question  at  all  about  the  pressure  that 
is  going  to  be  brought  on  Congress  to  adopt  such  a  tax.  We  feel  that 
issue  is  going  to  turn  on  some  such  plan  as  the  Committee  has  presented 
on  the  one  hand,  and  a  sales  tax  of  some  kind  on  the  other. 

MR.  MACBETH:  It  is  not  the  purpose  at  this  time  to  have  this  Con- 
gress endorse  the  recommendations  of  this  Committee,  is  it? 

CHAIRMAN  ARMITAGE:  I  don't  understand  the  resolution  so;  I 
understand  it  is  quite  the  contrary.  It  would  not  be  fair  or  just  to  ask 
the  members  of  this  Congress  to  assimilate  and  pass  upon  a  printed 
report  of  the  length  of  this  one  on  the  question  of  taxation.  I  think  the 
purpose  of  the  Committee  at  this  time  is  to  present  this  report  now  for 
discussion  and  criticism;  that  is  the  object  of  both  the  Conference  Board 
and  the  Committee. 

I  have,  on  the  question  of  the  proposal  for  a  tax  commission,  a  tele- 
gram from  the  Chairman  of  the  Arizona  Tax  Commission,  which  I  would 
like  to  read: 

Phoenix,  Arizona.  November  16,  1920. 
Bulkeley  Wells, 

President,  American  Mining  Congress, 

Denver,  Colo. 

Proposal  commission  liquidate  tax  controversies  absolute  necessity. 

C.  M.  Zander,  Chairman  Tax  Commission. 

What  other,  or  further  subject,  would  you  care  to  discuss  at  this 
meeting?  Mr.  Fisher,  did  you  have  some  remarks  to  make  on  the  subject 
of  depletion? 

[Mr.  Fisher's  address  on  page  677  of  the  Proceedings.  1 
CHAIRMAN  ARMITAGE:     Any  other  business? 

MR.  GOWER:  While  the  subject  is  fresh  in  our  minds  about  this 
attempt  of  the  Department  to  take  our  invested  capital  away  from  us. 
I  thought  I  would  like  to  introduce  a  resolution  which  would  embody 
the  sense  of  the  mining  industry,  because  it  is  not  one  but  all  who  are 
hit  by  this  rule. 

MR.  MACBETH :  I  move  that  the  resolution  be  referred  to  the  Tax 
Committee  of  the  American  Mining  Congress.  There  are  too  few  of  us 
here  to  take  up  this  question  and  go  into  it,  and  beside  we  would  like  to 
have  a  report  from  the  Tax  Committee  on  that  question  before  taking 
action  on  the  subject. 

CHAIRMAN  ARMITAGE:  I  do  not  think  that  we  can  adopt  a  reso- 
lution. The  procedure  is  that  we  should  refer  this  resolution  to  our 
Sub-Committee  I  understand  we  have  appointed  here  to  act  upon  it,  and 
if  you  will  amend  your  motion  by  making  it  a  motion  to  refer  the  reso- 


144  REPORT  OF  PROCEEDINGS 

lution  to  the  Sub-Committee  on  resolutions  who  will  take  up  this  reso- 
lution and  act  upon  it,  either  submitting  it  to  the  Congress,  or  the  Tax 
Committee,  that  would  be  the  more  orderly  way. 

MR.  MACBETH:  I  will  amend  the  motion  by  referring  it  to  the  Sub- 
Committee. 

(Motion  unanimously  carried.) 

CHAIRMAN  ARMITAGE:  That  practically  closes  our  program  here 
except  for  the  work  of  the  Sub-Committee  apopinted  on  these  resolu- 
tions. 

MR.  MACBETH :  I  personally  am  anxious  to  have  the  Mining  Congress 
go  on  record  as  favoring  a  repeal  of  the  excess-profits  tax.  I  believe  the 
Chairman  stands  with  me  in  this  matter,  and  I  should  suppose  Mr.  Allen 
would  also. 

MR.  ALLEN:  I  think  all  of  us  favor  such  a  resolution.  A  similar 
resolution  was  adopted  by  the  National  Tax  Association  at  its  conven- 
tion at  Salt  Lake  City  about  two  months  ago  [September,  1920].  Cer- 
tainly, there  is  no  objection  to  that  kind  of  a  resolution. 

CHAIRMAN:  We  will  make  the  resolution  now  and  refer  it  to  the 
Sub-Committee,  which  will  meet  and  consider  that  subject. 

(Adjournment.) 


THE  AMERICAN  MINING  CONGRESS  145 

OIL-SHALE  CONFERENCE 

American  Mining  Congress 

THURSDAY,  NOVEMBER  18,  2.30  P.  M. 

DR.  VICTOR  C.  ALDERSON,  Chairman:  Inasmuch  as  we  are  start- 
ing a  little  late,  and  it  is  possible  to  cut  short  any  informal  talks  that 
may  be  made,  while  a  man  who  has  written  a  paper  cannot  very  well 
cut  it  down,  I  am  going  to  ask  that  a  paper  be  read  first.  This  will  be  by 
Mr.  M.  J.  Gavin  of  the  U.  S.  Bureau  of  Mines,  entitled  'The  Next  Mining 
Problem.'  It  will  be  read  by  Mr.  Karrick  on  account  of  the  enforced 
absence  of  Mr.  Gavin  at  a  meeting  with  the  Director  of  the  U.  S.  Bureau 
of  Mines. 

MR.  C.  L.  KARRICK:  Mr.  Chairman,  Ladies  and  Gentlemen:  As  ex- 
plained by  Dr.  Alderson,  I  have  been  delegated  as  Mr.  Gavin's  assistant 
at  the  Salt  Lake  Oil  Shale  Station  to  take  his  place  this  afternoon  read- 
ing the  paper  that  he  has  prepared.  You  are  all  familiar  with  the  scope 
of  the  shale  problem  that  we  have  before  us,  and  especially  as  regards 
mining;  so  he  has  discussed  the  mining  of  shale  under  the  head  of  the 
lecture  that  was  assigned  to  him. 

[Mr.  Gavin's  paper  will  be  found  on  page  497  of  the  Proceedings.] 

CHAIRMAN  ALDERSON:  I  understand  there  follows  Mr.  Gavin's 
paper  another  on  the  same  general  subject,  but  with  a  little  different  title, 
namely,  'Mining  for  Oil'  by  our  State  Commissioner  of  Mines,  Mr.  Horace 
F.  Lunt. 

MR.  HORACE  F.  LUNT:  Mr.  Chairman,  Ladies  and  Gentlemen:  I 
may  say  that  these  subjects  were  assigned  to  Mr.  Gavin  and  myself,  and 
neither  of  us  knew  that  the  other  had  the  subject  assigned  until  a  day  or 
so  ago,  and  fortunately  we  treated  it  from  a  little  different  angle,  although 
you  will  find  that  I  have  repeated  what  he  said  to  a  slight  extent.  I  trust 
you  will  bear  with  me  in  those  cases. 

[Mr.  Lunt's  paper  will  be  found  on  page  507  of  the  Procceedings.] 

CHAIRMAN  ALDERSON:  The  chairman  has  a  little  advantage  in  that 
he  is  privileged,  if  he  is  on  the  program,  as  I  happen  to  be,  to  make  his 
own  place  on  the  program.  The  little  that  I  have  to  say,  I  shall  make 
brief.  From  my  recent  visit  to  England  and  Scotland  I  have  brought 
back  some  fresh  information. 

Status  of  Oil-Shale  in  Scotland 

The  problem  of  the  oil-shale  industry  in  Scotland  today  is  not  one  of 
technique,  but  a  pure  matter  of  business,  the  difference  between  the  cost 


146  REPORT  OF  PROCEEDINGS 

of  production  and  the  selling  price.  They  mine  approximately  between 
4000  and  5000  tons  of  shale  a  day.  They  employ  above  and  below  ground 
approximately  the  same  number  of  employees,  one  man  for  each  ton  of 
shale  mined.  William  Fraser,  the  managing  director  of  the  Scottish  Oils, 
Limited,  told  me  they  were  making  approximately  two  shillings,  or, 
under  normal  exchange,  fifty  cents  a  ton. 

The  present  company,  mentioned  above,  is  a  consolidation  of  six  pre- 
vious oil-shale  companies.  It  is  controlled  by  the  Anglo-Persian  Oil  Co., 
Ltd.,  which,  in  turn,  is  controlled  by  the  British  Government.  The  capi- 
talization is  £4,000,000,  or  $19,400,000,  in  $14,550,000  preferred  and 
$4,850,000  common  stock.  On  the  financial  side  it  should  be  noted  that 
for  many  years  these  constituent  companies  have  been  paying  dividends, 
not  only  on  their  preferred,  but  on  their  common  stock.  For  the  past 
five  or  six  years  they  have  paid  6%  on  preferred  without  a  break,  and 
their  dividends  on  common  have  run  from  10  to  40%.  I  inquired  par- 
ticularly about  these  points,  especially  the  latest  dividend  which  was  paid 
in  February,  1920,  of  3%%,  on  the  preferred  stock.  The  expectation  is 
that  this  will  be  paid  regularly.  I  brought  that  over  especially  for  our 
financial  friends  who  may  have  a  lingering  idea  that  perhaps  the  oil-shale 
industry  will  be  profitable.  It  has  been  paying  in  Scotland  for  seventy 
years. 

[Mr.  Alderson's  complete  paper  will  be  found  on  page  511  of  the 
Proceedings.] 

CHAIRMAN  ALDERSON:  The  next  speaker  is  Mr.  G.  B.  Morgan, 
State  Geologist  of  Wyoming,  who  will  address  us  on  the  subject  of 
'Wyoming  Oil  Shales.' 

MR.  G.  B.  MORGAN:  Mr.  Chairman,  Ladies,  and  Gentlemen,  I  didn't 
know  until  I  came  to  this  Convention  that  I  was  on  this  program;  there- 
fore, my  paper  will  be  short  and  general  in  character.  There  has  been 
little  prospecting  in  Wyoming  in  the  oil-shales,  but  I  expect  there  will  be 
considerable  done  in  the  near  future. 

[  Mr.  Morgan's  paper  will  be  found  on  page  529  of  the  Proceedings.] 

CHAIRMAN  ALDERSON:  I  feel  that  a  meeting  like  this  would  not 
be  complete  with  merely  the  formal  presentation  of  papers,  so  I  have 
scouted  around  a  little  to  get  some  individuals  to  consent  to  speak. 

MR.  LUNT:  Mr.  Chairman,  if  nobody  will  start  anything,  I  would 
like  to  ask  why  you  say  you  quarrel  with  my  figures?  You  say  that  the 
cost  of  mining  in  Scotland  is  $1.14;  now,  I  don't  question  that  at  all,  and 
you  also  say  that  the  men  there  get  something  like  $4.25,  was  it? 

CHAIRMAN  ALDERSON:     $4.37  now  in  the  coal  mines. 

MR.  LUNT:  Why  our  men  get  a  good  deal  more  than  that,  and  I  am 
assuming  it  will  be  more  of  a  coal  mining  than  a  metal-mining  job.  As 
I  recollect  it,  the  minimum  wage  in  the  coal  mines  is  something  like  $6, 
and  the  miners  figure  on  making  considerably  more  than  that.  Now, 


THE  AMERICAN  MINING  CONGRESS  147 

without  knowing  the  cost  of  explosives  and  other  things,  I  think  that  is 
enough  to  boost  the  price  of  mining  in  this  country  considerably  above 
the  figures  you  have  given. 

CHAIRMAN  ALDERSON:  What  I  thought  of  when  you  were  speak- 
ing, that  I  would  bear  in  mind,  was  that  you  thought  it  would  cost  from 
$1.50  to  $2  a  ton  to  mine  the  shale.  I  assumed  that  was  the  cost  to  the 
company;  but  over  there  the  cost  is  exactly  $1.14  to  the  company,  with- 
out considering  what  the  miners  get. 

MR.  LUNT:  May  I  ask  if  that  includes  the  opening  of  the  mine,  and 
repairs  to  haulage  apparatus?  Of  course  we  would  not  have  any  hoisting 
plant,  but  all  those  overhead  charges  are  sometimes  not  figured  in  mining 
cost.  The  cost  of  the  actual  operating  cost  will  be  considerably  below 
those  figures.  I  mean,  that  to  include  everything  properly  charged  to 
mining  by  those  companies  which  keep  careful  and  accurate  costs — 
including  depreciation,  amortization,  and  all  those  figures  that  perhaps 
would  not  be  considered  by  the  average  person  who  wasn't  familiar  with 
mining  operations.  Do  you  know  just  how  much  of  that  is  included  in 
that  $1.14? 

CHAIRMAN  ALDERSON:  I  got  these  figures  at  the  mine,  and  I  had 
them  verified  at  the  office  in  Glasgow;  I  did  not  go  to  that  extremity.  The 
figures  I  gave  you  were  exactly  what  was  given  to  me.  A  man  is  given 
a  block  of  ground  to  work — it  is  really  a  lease — he  employs  his  own  men, 
buys  his  powder,  supplies,  tools,  timber,  if  necessary,  does  everything. 
The  company  pays  him  4  shillings  and  7  pence  for  each  ton  of  shale  that 
is  put  in  the  car  and  hauled  or  trammed  by  the  men  to  the  nearest  main 
haulageway.  Then  the  company  does  the  rest;  $1.14  pays  for  it.  It 
doesn't  pay  for  sinking  of  the  shaft,  opening  of  the  mine,  or  other  over- 
head charges. 

MR.  LUNT:  That  would  account  for  a  considerable  part  of  the  dif- 
ference between  us,  because  I  figured  in  all  those  items.  When  you  say 
the  cost  of  mining,  without  modifying  it,  then  it  is  largely  a  matter  of 
bookkeeping,  and  I  tried  to  make  it  clear  in  my  paper  that  such  was  the 
total  cost  and  not  simply  the  cost  of  delivering  it  to  the  pit  mouth. 

CHAIRMAN  ALDERSON:  I  would  revise  that,  and  make  it  total  cost — 
cost  of  everything,  so  it  will  not  be  misunderstood  as  I  misunderstood  it. 

MR.  LUNT:  Quoting  from  my  paper,  "These  point  to  a  total  mining 
cost,  including  equipment,  development,  operation,  repairs,  and  all  the 
overhead  expense  properly  chargeable  to  mining,  of  between  $1.50  and 
$2  per  ton." 

CHAIRMAN  ALDERSON:     I  missed  that. 

Over  on  the  Western  slope  we  have  a  town  that  has  a  name  that  will  be 
mentioned  a  great  many  times.  I  often  wondered  where  it  got  its  name 
until  I  found  a  man  of  the  same  name,  and  I  concluded  that  he  named  the 
town.  Since  we  will  hear  a  great  deal  of  that  place  in  the  near  future, 
I  am  going  to  insist  that  Captain  De  Beque  say  a  few  words. 


148  REPORT  OF  PROCEEDINGS 

CAPTAIN  DE  BEQUE:  Mr.  Chairman,  and  Gentlemen:  I  certainly 
appreciate  your  kindness  in  asking  me  to  say  a  few  words,  but  unfortu- 
nately I  have  no  address  prepared  for  this  occasion.  It  is  gratifying  to 
see  so  many  people  gathered  here,  interested  in  the  oil-shale  business,  and 
while  at  the  present  time  we  are  an  attachment  of  the  Mining  Congress, 
as  a  part  of  the  mining  business,  it  is  safe  to  predict  that  in  two  years 
we  will  have  a  convention  of  our  own — the  oil-shale  convention.  As  I 
say,  I  have  nothing  particular  to  speak  of.  I  thank  you  for  the  oppor- 
tunity of  saying  a  few  words.  (Applause.) 

CHAIRMAN  ALDERSON:  We  ought  to  hear  from  an  official  from 'the 
Western  slope.  I  don't  see  anybody  else  but  the  Mayor  himself — Mayor 
Hanson  of  De  Beque.  (Applause.) 

MAYOR  HANSON:  Mr.  Chairman,  Ladies,  and  Gentlemen:  As  Cap- 
tain De  Beque  says,  I  am  just  as  much  unprepared  as  he  is.  I  would  like 
to  have  Mr.  J.  B.  Jenson  explain.  He  has  the  ability  to  tell  us  something 
more  about  it.  I  would  hate  to  keep  all  these  people  waiting  here  stand 
ing  up  and  saying  nothing.  Mr.  Jenson  has  gone  into  the  oil-shale 
retorting  and  refining  more  thoroughly,  I  dare  say,  than  any  other  man 
on  the  Western  slope  or  in  Utah.  Mr.  Jenson,  I  implore  you  to  get  up 
and  say  something.  (Applause.) 

CHAIRMAN  ALDERSON:  I  will  say  in  behalf  of  Mr.  Jenson  that  he 
has  a  paper  prepared,  but  he  pleaded  sickness.  He  will  deliver  his 
manuscript  which  will  be  printed  and  you  will  have  the  chance  to  read 
that  later.  I  wish,  Mr.  Jenson,  you  would  come  up  in  front  and  talk  to 
us  for  a  few  moments. 

MR.  J.  B.  JENSON:  The  talk  I  had  prepared  was  on  some  different 
lines,  and  I  didn't  understand  just  what  was  wanted  of  me  until  yester- 
day. In  going  into  the  subject,  I  have  touched  a  little  here  and  there, 
leading  up  directly  to  the  treatment  of  the  shales  of  our  Western  slope. 

Treatment  of  Shale  in  Rocky  Mountain  Region 

My  understanding  was  that  I  was  intended  to  cover  that  subject  in  such 
a  way  that  in  case  there  were  among  the  audience  some  who  had  not  gone 
into,  at  least  in  a  preliminary  way,  the  basic  principles  of  retorting,  those 
principles  would  be  touched  on  briefly  in  order  that  it  might  be  known 
what  points  I  am  attempting  to  make  in  my  paper.  For  that  reason, 
while  I  am  attempting  to  confine  myself  to  the  shales  of  the  Western 
slope — by  which  I  mean  those  shales  which  are  included  or  were  origin- 
ally included  in  this  great  Uintah  Basin  before  it  was  segregated  into  the 
Green  River  Basin — you  can  see  under  those  circumstances  in  the  short 
time  that  is  left  it  would  be  useless  to  attempt  to  cover  this  subject.  If 
it  is  so  desired,  and  there  are  enough  of  the  members  in  this  audience 
who  care  to  do  so,  I  should  be  glad  to  meet  in  one  of  the  rooms  this 
evening  and  go  over  this  subject,  and  also  to  enter  into  such  discussion 
as  might  be  of  value  to  those  who  are  interested  in  the  development  of 
the  shale  industry.  And  while  here  I  would  suggest  one  thing:  You  all 


THE  AMERICAN  MINING  CONGRESS  149 

recognize,  p,t  least  those  of  you  who  are  burdened  this  year  with  the 
matter  of  development  work  on  shale  locations,  that  we  are  very  much 
in  the  dark — and  it  is  a  lamentable  fact  that  at  this  time  we  have  not  had 
some  definite  information  pertaining  to  the  matter  of  assessment  work, 
particularly  as  lessees — and  the  reason  for  it  is,  of  course,  that  our  mining 
laws  as  at  present  framed  were  never  intended  to  cover  oil-shales,  due  to 
the  fact  that  they  have  only  recently  come  into  prominence.  And  for 
that  reason  there  are  apparent  conflicts  between  the  placer  mining  law, 
the  lode  mining  law,  and  the  petroleum  placer  law  that  should  be  cleared 
up.  It  occurs  to  me  what  we  need  now — inasmuch  as  many  of  us  are 
engaged  in  extensive  development — is  a  rule  by  the  Department  of  the 
Interior  defining  what  is  expected  in  the  way  of  assessment  work  and 
what  will  be  permitted.  And  I  had  in  mind  to  propose  to  the  Chairman 
of  this  meeting  that  he  appoint  a  committee  of,  say,  three,  who  shall  first 
endeavor  to  get  as  quickly  as  possible  a  ruling  from  the  Department  to 
serve  as  a  guide  for  the  remainder  of  the  year,  in  order  that  we  might,  as 
fully  as  possible,  comply  with  the  requirements  of  the  law  and  not  do 

Mining  Law  as  Pertains  to  Oil-Shale 

needless  work.  Then,  in  the  meantime,  also  prepare  a  petition,  or  what- 
ever this  Committee  sees  fit,  directed  to  Congress  to  expedite  the  matter 
of  revising  the  mining  law  and  making  it  applicable  to  oil-shales.  I 
believe,  and  I  think  it  is  reasonable  to  expect,  that  with  the  great  amount 
of  work  that  Congress  will  have  in  hand  pertaining  to  the  period  of 
reconstruction,  that  there  will  be  a  tendency  to  postpone  matters  of  this 
kind,  perhaps  indefinitely;  but  it  is  certainly  important  and  absolutely 
necessary  that  before  another  year  goes  by  we  must  have  some  definite 
fixed  statute,  or  a  revision  of  the  law,  which  will  apply  to  the  mining, 
development,  and  obtaining  of  oil-shales. 

I  would  therefore  move  that  you,  Mr.  Chairman,  select  a  committee  to 
confer  with  the  Department  of  the  Interior  and  obtain  a  ruling  pertain- 
ing to  the  requirements  of  assessment  work,  which  may  be  published  at 
the  earliest  possible  date;  and  that  this  be  followed  by  taking  the  matter 
up  directly  with  Congress,  for  a  revision  of  the  mining  law  in  such  a  way 
that  we  will  have  a  definite  guide  for  next  year. 

And  there  is  another  question  which  I  should  refer  to,  that  concerning 
grouping  of  claims.  From  the  best  legal  advice  we  can  get,  no  definite 
conclusion  has  been  reached  that  we  are  allowed  to  group.  It  is  true 
that  under  the  petroleum  act  we  are  permitted  to  develop  or  make  dis- 
covery on  five  claims  by  putting  down  one  well;  but  that,  as  I  understand 
it.  was  enacted  because  of  the  fact  that  it  is  not  possible  or  practical  to 
sink  a  well  on  each  quarter  section  without  undue  hardship.  In  the 
matter  of  the  development  of  the  oil-shales,  the  plotting  of  the  shales  and 
a  testing  ground  are  important  items,  and  it  seems  if  that  law  is  appli- 
cable to  petroleum  claims  it  should  also  apply  to  oil-shale  claims.  In  the 
case  of  metal  claims  it  is  not  necessary  to  install  large,  expensive  plants 
such  as  are  required  in  the  development  of  oil-shale  deposits.  For  in- 
stance: one  might  open  either  a  placer  gold  claim  or  a  lode  gold  claim 
°M  strike  ore,  paying  his  way;  you  can't  do  that  in  the  oil-shale  industry. 


150  REPORT  OF  PROCEEDINGS 

Large  Investment  Needed  for  Shale  Mines 

Before  you  can  have  one  dollar  of  revenue,  you  must  invest  heavily  in  a 
retorting  plant,  and  possibly  in  a  refinery  involving  thousands,  up  to 
hundreds  of  thousands  of  dollars;  so,  if  the  mining  law  permits  grouping 
of  metal  claims  and  developing  at  one  point,  there  is  no  reason  why  it 
should  not  also  apply  to  placer  shale  claims.  If  we  are  permitted  to 
develop  or  do  assessment  work,  or  make  discovery  on  a  certain  tract  of 
oil  land  by  grouping,  this  likewise  should  apply,  as  it  resembles  at  least 
in  principle  the  oil-shale  claims.  I  therefore  move  that  a  committee  be 
appointed  for  this  purpose. 

[Mr.  Jenson's  paper  will  be  found  on  page  532  of  the  Proceedings.] 

MR.  J.  A.  EDE:  Mr.  Pinney  read  a  paper  on  the  "Interpretation  of 
Mining  Laws,"  referring  to  the  oil-shale,  coal,  and  metalliferous  mining 
which  are  the  subject  of  the  mining  laws,  and  I  believe  he  is  now  in  the 
city. 

MR.   JENSON:     I   withdraw   that   motion,    then. 

MR.  EDE:  In  regard  to  the  mining  of  shale,  I  don't  see  much  diffi- 
culty, but  I  think  it  is  premature  to  base  any  positive  computations  upon 
what  you  will  be  able  to  do.  Opening  a  mine  is  very  deceptive.  It  is 
when  you  get  in  for  some  thousand  feet  or  more — the  conditions  you  will 
have  to  contend  with  at  that  time  and  the  cost  of  maintenance  will  be 
subjects  that  you  will  have  to  meet.  The  difference  in  the  figures,  so  far 
as  those  which  Dr.  Alderson  gives  are  concerned,  while  they  may  not  be 
altogether  correct,  are  comparative.  We  are  in  this  country  working  our 
coal  mines  in  competition  with  England,  and  if  they  are  able  to  make 
that  price  over  there  it  is  likely  that  we  may  be  able  to  do  the  same 
thing  here. 

Dr.  David  White  is  with  us  this  afternoon,  and  we  cannot  afford  not  to 
have  him  talk  on  this  subject,  for  I  feel  sure  he  will  give  us  much  to 
think  about.  To  get  at  the  nature  of  a  thing  we  must  understand  that 
we  have  dismissed  the  idea  that  what  they  may  do  in  another  place  would 
necessarily  be  the  right  thing  for  us  to  adopt.  We  have  learned  that  the 
shale  in  Nevada  and  the  shale  in  other  parts  of  the  United  States  have  a 
different  physical  character.  If  we  are  working  on  these  prices  and  try- 
ing to  get  this  distillation,  I  think  that  the  first  thing  we  should  do  is  to 
understand  our  subject  and  get  all  the  information  possible  before  we 
proceed  any  further.  Therefore,  I  think  we  can't  afford  to  lose  an  oppor- 
tunity of  listening  to  the  Chief  Geologist  of  the  United  States,  who  can 
speak  to  us  most  profitably  along  these  lines. 

CHAIRMAN  ALDERSON:  Really,  Mr.  Ede,  you  have  stolen  my 
thunder,  because  I  have  had  my  eye  on  Dr.  White  for  some  time.  I  was 
waiting  until  the  proper  time  came  to  suggest  that  Dr.  White  be  our  last 
speaker  and  pronounce  the  benediction.  Dr.  White  is  the  man  in  Wash- 
ington who  answers  this  sort  of  a  description.  With  the  consent  of  those 
present,  we  will  conclude  our  conference  with  a  talk  from  Dr.  David 
White  of  Washington,  D.  C.  (Applanse.) 


THE  AMERICAN  MIXING  CONGRESS  151 

DAVID  WHITE:  Several  comments  regarding  the  first  three  papers 
are  pertinent.  Deposits  of  shale  that  will  yield  oil  on  distillation  are 
fairly  widespread  in  the  United  States;  but  in  the  Eastern  States,  the 
deposits  of  rich  shale — shale  adapted  to  the  distillation  of  oil  in  large 
yield  per  ton — are  restricted,  being  confined  mainly  to  the  remnants  of 
cannel  deposits  and  the  so-called  'bastard'  cannels  of  the  Eastern  coal- 
fields. All  of  these  deposits  are  limited  to  small  areas,  and,  as  compared 

The  Eastern  and  Western  Shales  of  America 

to  the  great  Western  reserves,  they  are  of  insignificant  volume.  Some  of 
them  are  rich,  and  will  be  used,  without  doubt;  but  when  you  view  the 
annual  oil  consumption  of  the  United  States,  the  amount  those  deposits 
will  furnish  is  relatively  small.  The  rich  ones  are  likely  to  be  worked 
out  rapidly.  The  more  extensive  shale  deposits  of  the  Devonian  and 
Lower  Carboniferous,  where  locally  so  rich  in  carbonaceous  matter,  and 
not  so  far  altered  but  that  they  may  be  practicably  used  for  distilling  oil, 
are,  at  best,  so  far  as  the  U.  S.  Geological  Survey  has  information,  inferior 
in  capacity  to  yield  oil  by  distillation.  They  cover  enormous  areas,  but 
they  are  relatively  lean.  The  greatest  oil-shale  deposits  of  the  United 
States — enormous  in  quantity  and  of  unusual  richness — are  here  in  Colo- 
rado, Utah,  Wyoming  and  Nevada. 

Estimates  of  the  Green  River  Shales 

Mr.  Morgan  is,  I  think,  a  little  modest  in  his  quotation  as  to  the  esti- 
mated content  of  the  Green  River  oil-shales.  I  think  it  not  improbable 
that  a  careful  and  complete  usage  of  those  shales — which  is  not  to  be 
expected — would  permit  the  production  of  as  much  oil  as  all  of  the 
natural  petroleum  now  known  in  the  world  and  recoverable  by  current 
methods — present  day  methods.  The  estimates  of  the  oil  resources  in  the 
ground  in  the  United  States,  prepared  by  the  Geological  Survey,  and  the 
estimates  of  'The  Oil  Resources  of  the  World,'  which  I  published  in  May 
and  which  have  been  widely  quoted  by  the  Government  and  the  press, 
are  based  upon  present  methods  of  recovery.  You  will  bear  this  in  mind. 
Improved  methods,  such  as  the  U.  S.  Bureau  of  Mines  recommends,  are 
likely  to  result  in  a  much  increased  production  and  will  have  the  effect  of 
increasing  those  estimates.  But  if  the  amount  recoverable  should  be 
increased  by  one-half,  bringing  it  up  to  ten  or  eleven  billions,  or  if  the 
recovery  be  actually  doubled — which  seems  improbable — bringing  it  up  to 
fifteen  billions  of  barrels  of  oil  recoverable  with  the  help  of  new  methods, 
you  can  calculate  in  short  time  how  long  that  would  last  if  the  country 
were  wholly  dependent  on  our  domestic  production.  Our  country  is 
already  using  more  than  half  a  billion  barrels  a  year,  and  the  con- 
sumption rate  is  increasing  rapidly  and  inevitably,  for  our  prosperity, 
our  standards  of  every-day  living,  our  industrial  development  and  our 
expectations  of  the  future  are  all  based  upon  an  adequate  supply  of 
petroleum.  We  must  have  it,  and  it  must  be  assured  in  advance.  If  it  is 
found  to  cost  too  high,  we  will  have  to  curtail  our  consumption  and  use 
oil  for  the  higher  consumption  purposes  rather  than  the  grosser.  View- 


152  REPORT  OF  PROCEEDINGS 

ing  the  future  by  decades  of  years,  and  our  consumption  by  half  billions 
and  more  of  barrels,  the  Eastern  oil-shale  deposits  that  are  really  rich 
will  never  go  very  far,  valuable  as  they  may  be,  and  cannot  carry  the 
country  through  any  long  period.  We  must  depend  largely  on  the  ex- 
tensive as  well  as  rich  shale  deposits  of  the  Rocky  Mountain  States. 

Geologic  Age  of  the  Shales 

The  Green  River  oil-shales  are,  however,  different  from  the  Paleozoic 
shales  and  cannels  of  the  East  by  virtue  of  the  geologic  maturity,  that  is, 
the  further  advanced  progressive  alteration  of  the  organic  matter  in 
these  Eastern  deposits.  The  Green  River  shales,  which  are  in  a  relatively 
early  stage  in  their  geologic  history,  are  comparatively  unaltered — that 
is,  they  have  been  subjected  to  little  progressive  regional  alteration,  and, 
mainly  by  reason  of  this  fact,  give  a  larger  percentage  of  unsaturated 
hydrocarbons.  In  this  appears  to  lie  one  of  the  problems,  perhaps  the 
greatest,  confronting  those  who  in  the  West  are  earnestly  endeavoring 
at  the  present  time  to  put  oil-shale  on  the  map  as  a  going  industry. 

Of  the  three  problems  confronting  them,  the  first,  mining,  which  has 
occupied  much  attention  in  this  discussion,  is,  I  believe,  relatively  unim- 
portant. The  question  of  disposal  of  waste  and  of  securing  adequate 
water  are,  on  the  other  hand,  likely  to  be  under-rated.  In  some  districts 
it  is,  however,  probable  that  artesian  water  may  be  obtained. 

The  two  great  problems /appear  to  be  those  of  devising,  if  possible,  a 
retort  which  will  produce  in  large  amounts  a  distillate  readily  convertible 
into  the  most  valuable  marketable  products,  in  some  of  which  saturated 
hydro-carbons  in  larger  percentages  will  be  present.  What  the  retort  men 
cannot  do  the  refiner  must  do,  and  that  is  the  other  problem,  the  refiner's. 

In  regard  to  the  mining  of  the  Green  River  shale,  I  would  add  a  word 
or  two  based  upon  the  observations  of  the  Survey  during  this  summer 
and  in  former  years.  This  shale  is  generally  much  lower  in  organic  mat- 
ter— that  is,  higher  in  ash,  than  the  'kerosene'  shale  in  its  best  phases  in 
Australia,  which,  I  believe,  sometimes  contains  as  much  as  87%  of  vola- 
tile matter.  Our  shale,  which  is  'rich'  when  it  approaches  50^  of  organic 
matter,  appears  to  be  well  laminated,  and  lies  in  relatively  undisturbed 
horizontal  beds.  The  question  of  strength  of  pillars  ought  not  to  present 
serious  difficulties.  Some  of  the  rich  rock  will  spall;  probably  there  will 
be  some  scratching,  especially  in  breaking  up  the  lumps;  but  it  is  antici- 
pated that  the  pillars  will  hold  as  well,  at  least,  as  in  the  average  hori- 
zontal bituminous  coals.  Popping  of  the  face  of  the  freshly  exposed  rock 
under  deep  cover  is  not  likely  to  occur. 

Gas  in  Oil-Shale 

Now,  as  to  the  gases:  Our  observations  lead  us  to  expect  that,  in 
some  of  the  mines,  as  the  oil-shale  is  mined  in  deeper,  lenses  of  sand, 
washed  in  on  the  great  pond  of  organic  mud,  will  be  found,  and  that 
some  of  these  lenses  of  sand  will  be  saturated  with  oil  and  gas.  It  is 
quite  possible  that,  when  encountered  under  heavy  pressure,  some  of 
these  will  yield  gas. 


THE  AMERICAN  MINING  CONGRESS  153 

Fissures,  are,  of  course,  to  be  expected;  that  is  to  say,  big,  deep-seated, 
master  joints  are  developed.  This  is  proved  by  the  great  fissures  pulled 
open  and  filled  with  gilsonite  in  the  Uintah  basin.  More  jointing  of  the 
refined  type  would  facilitate  mining  of  the  shale.  Possibly  gas  may  come 
up  through  some  of  the  fissures  or  joints;  but  it  seems  to  me  that  the 
occurrence  of  gas  in  them  is  likely  to  be  rare.  Experience  will  answer 
this  question.  I  think  it  more  probable  that  such  gas  as  is  encountered 
will  originate  in  oil-saturated  sands  inter-bedded  or  included  in  the  shale. 
Much  shale  can  no  doubt  be  'stripped'  at  relatively  low  cost.  In  some 
regions  the  oil-shales  lies  near  water-level  and  may  even  be  quarried 
under  shallow  cover  on  a  dip  slope. 

To  insure  the  establishment  of  an  oil-shale  industry  on  a  profitable 
basis  at  the  earliest  possible  moment  the  first  and  most  successful  retort- 
ing plants  should  be  placed  where,  other  things  being  equal,  the  shale 
may  be  mined  most  cheaply.  This  calls  for  teamwork  and  somewhat 
unselfish  co-operation.  The  companies  working  with  experimental  plants 
should  co-operate  and  keep  in  the  closest  touch  with  the  U.  S.  Bureau  of 
Mines,  so  that  the  best  that  is  discovered  will  be  promptly  recognized  and 
combined,  and  the  most  promising  combination  be  given  the  best  oppor- 
tunity for  results  by  trial  in  the  most  favorable  area,  thus  putting  oil- 
shale  production  at  a  profit  on  the  map  at  the  earliest  possible  date. 
(Applause.) 

CHAIRMAN  ALDERSON:  The  Secretary,  Mr.  Callbreath,  .would  like 
very  much  to  have  the  address  of  everybody  here  who  is  interested  in 
oil-shale. 


154  KKI'OKT  OF  PROCEEDINGS 

FLOTATION  CONFERENCE 

American  Mining  Congress 

WEDNESDAY,  NOVEMBER  17,  1920,  10  A.  M. 

Mr.  George  E.  Collins  of  Denver,  Colorado,  presided 

CHAIRMAN  COLLINS:  Gentlemen,  will  the  Conference  please  come 
to  order. 

[Mr.  Collins  then  read  a  paper  on  the  history  and  present  condition  of 
fication,  which  appears  on  page  551  of  the  Proceedings.] 

CHAIRMAN  COLLINS:  The  first  speaker  on  our  program  tonight  is 
Mr.  W.  C.  Russell,  who  has  prepared  a  paper,  the  title  of  which  I  will 
read :  'Has  the  Attitude  of  Minerals  Separation  Retarded  the  Development 
of  Flotation  Concentration?'  Unfortunately,  Mr.  Russell  has  been  called 
away,  and  is  unable  to  be  present  here,  but  Mr.  Keiner  has  kindly  under- 
taken to  read  the  paper. 

[Mr.  Russell's  paper  will  be  found  on  pagge  556  of  the  Proceedings.] 

CHAIRMAN  COLLINS:  The 'subject  is  now  open  for  discussion.  In 
order  to  set  the  ball  rolling,  I  will  call  upon  Mr.  T.  A.  Rickard,  San 
Francisco,  to  make  a  few  remarks.  Mr.  Rickard  needs  no  introduction 
from  me.  He  was  a  very  prominent  mining  engineer  of  this  city  [Den- 
ver] and  State  [Colorado]  for  many  years  before  he  became  a  journalist, 
and  since  then  his  prominence  has  increased  decidedly  rather  than 
diminished.  Mr.  Rickard  has  a  paper  [the  Mining  and  Scientific  Press} 
which  he  edits  and  controls,  and  a  great  many  of  the  abstracts  included 
in  Mr.  Russell's  paper  were  taken  from  that  journal.  I  will  ask  Mr. 
Rickard  to  address  you. 

MR.  RICKARD:  Mr.  Chairman:  I  would  like  to  waive  the  oppor- 
tunity you  have  given  me  to  address  this  conference.  I  would  like  to 
waive  it  until  later,  and  I  would  like  to  suggest  to  you  that  having  heard 
an  attack,  it  would  be  good  sportsmanship  to  listen  to  the  defense.  I 
sympathize  with  the  attack  that  has  been  made,  and  I  know  that  Mr. 
Cook  has  prepared  a  defense,  and  it  seems  to  me  that  the  interest  in  these 
proceedings  will  be  heightened  if  an  attack  will  be  followed  by  a  defense. 

Attack  on  Minerals  Separation  to  be  Followed  by  Defense 

You  know  that  the  representatives  of  Minerals  Separation  have  been 
invited  to  come  here  and  make  an  explanation  or  defense,  and  it  is  only 
courteous  to  ask  one  of  them  to  speak  now,  and  I  shall  be  glad  to  speak 
later. 

CHAIRMAN  COLLINS:  We  are  fortunately  honored  here  today  by 
having  the  presence  of  several  of  the  most  prominent  members  of  the 


THE  AMERICAN  MINING  CONGRESS  155 

Minerals  Separation  North  American  Corporation.  We  have  with  us 
today  Mr.  A.  A.  Cook,  who  is  the  counsel  and  one  of  the  directors  of  that 
company;  we  have  Mr.  E.  H,  Nutter,  who  is  the  chief  engineer;  and  we 
have  Mr.  C.  B.  Allen,  the  secretary.  Perhaps  these  gentlemen  would  like 
to  make  a  few  remarks  with  reference  to  Mr.  Russell's  paper.  Mr.  Nutter, 
may  I  appeal  to  you  to  do  so? 

MR.  COOK:  Mr.  Chairman,  as  I  listened  to  the  paper  read  by  Mr. 
Russell,  I  was  reminded  of  my  school-boy  days  and  of  the  story  of  Mark 
Antony,  and  you  all  recall  that  he  said:  "We  come  to  bury  Caesar,  not  to 
praise  him."  You  were  good  enough  to  extend  an  invitation  to  Minerals 
Separation.  I  believe  it  was  the  first  invitation  ever  extended  to  Min- 
erals Separation  by  the  American  Mining  Congress.  If  one  had  been 
extended  to  us  before  it  would  have  been  our  privilege  to  have  met  with 
you  gentlemen,  because  we  appreciate,  even  though  you  may  not  think  so 
for  the  moment,  that  the  mining  industry  is  something  that  should  be 
encouraged,  and  that  the  development  and  welfare  of  the  industry  is  a 
bigger  thing  than  any  single  corporation,  or  any  contribution  that  can 
be  made  to  it  by  any  corporation,  or  any  owners  of  patents  including 
Minerals  Separation  North  American  Corporation.  In  your  letter  you 
said  that  no  conference  with  respect  to  the  flotation  process  would  be 
complete  without  Minerals  Separation  being  represented,  and  in  our  reply 
I  told  you  that  we  would  be  glad  to  attend  and  would  be  glad  to  acquaint 
the  Mining  Congress  with  the  facts,  as  we  Understand  them,  and  give 
them  accurate  information.  Now,  it  is  my  purpose  in  being  here  to  be 
helpful,  if  I  can,  to  co-operate,  which  I  should,  and  if  it  is  agreeable  to 
the  Chair,  I  would  prefer  to  have  all  of  the  attacks,  suggestions,  or 
criticisms  that  present  themselves  in  the  various  papers  read,  then  I  will 
lake  great  pleasure  in  an  attempt  by  a  heart-to-heart  talk  to  members 
present  to  find  out  what  is  the  truth  of  the  situation. 

CHAIRMAN  COLLINS:  Gentlemen,  I  will  say  that  the  suggestions  as 
stated  by  Mr.  Cook  appear  to  the  Chair  to  be  reasonable  and  likely  to 
lead  to  the  best  solution.  If  the  members  of  the  Committee  on  arrange- 
ments present  think  otherwise,  I  wish  that  some  of  you  would  advise  me. 
Failing  such  I  would  be  disposed  to  follow  Mr.  Cook's  suggestion.  The 
next  paper  is  one  by  Mr.  George  L.  Nye,  counsel  employed  by  the  Ameri- 
can Mining  Congress,  entitled,  'Particular  Practices  of  Minerals  Separa- 
tion which  Mining  Men  have  Criticised.' 

[Mr.  Nye's  paper  will  be  found  on  page  570  of  the  Proceedings.] 

CHAIRMAN  COLLINS:  Gentlemen,  the  program  contains  another 
paper  which  is  of  this  controversal  type,  and  directly  concerns  the  rela- 
tions between  Minerals  Separation  and  operation  of  the  flotation  process. 
This  paper  is  prepared  by  Mr.  Gilbert  H.  Montague,  a  lawyer  of  New  York 
City,  who  is  associated  in  advising,  on  behalf  of  the  American  Mining 
Congress,  the  counsel  of  the  Federal  Trade  Commission,  in  connection 
with  the  proceedings  now  pending  before  them.  Mr.  Montague  has  come 
here  from  New  York,  largely,  or  entirely,  I  think,  in  order  to  address  you, 
and  I  feel  sure  that  you  will  be  glad  to  hear  and  to  consider  his  paper. 


156  REPORT  OF  PROCEEDINGS 

MR.  MONTAGUE:  Mr.  Chairman,  ladies  and  gentlemen:  When  your 
honored  chairman  asked  me  to  read  a  paper,  I  said  I  would  do  so  on  one 
condition  only,  and  that  is  that  a  discussion  of  my  paper  be  led  by  Mr. 
Cook,  counsel  for  Minerals  Separation.  The  members  of  the  New  York 
bar  are  proud  of  Mr.  Cook's  career  as  a  lawyer.  He  is  one  of  the  most 
distinguished  members,  for  his  age,  and  Minerals  Separation  made  no 
mistake  in  entrusting  the  leadership  of  its  legal  matters  to  him. 

Mr.  Cook  has  stated  that  before  he  answers  he  would  like  to  hear  the 
whole  case  against  Minerals  Separation.  Unfortunately,  we  will  not  be 
able  to  accommodate  him,  as  testimony  thus  far  taken  by  the  Federal 
Trade  Commission  against  his  client  is  not  complete. 

Mr.  Montague's  address  will  be  found  on  page  589  of  the  Proceedings. 
He  added  the  following  extemporaneous  remarks: 

Application  of  Patent  After  Expiring  in  1923 

Following  the  reading  of  this  paper,  Mr.  Cook,  speaking  as  he  stated 
"subject  to  correction"  by  the  Corporation's  officials  in  New  York,  ques- 
tioned my  statement  that  after  November  6,  1923,  a  Minerals  Separation 
standard  licensee  "who  has  never  used  any  process  or  apparatus  belong- 
ing to  Minerals  Separation,  excepting  only  the  process"  covered  by  Patent 
No.  835,120  ("fraction  of  one  per  cent,  oil")  then  expired  would  still  be 
obligated  to  continue  to  pay  royalties  to  Minerals  Separation. 

To  clear  up  this  difference  regarding  the  plain  meaning  of  Article  1  of 
Minerals  Separation's  standard  license  agreement,  which  unequivocally 
provides,  without  any  time  limitation  whatsoever  (in  this  respect  unlike 
Minerals  Separation's  agreements  with  certain  favored  licensees  which  by 
their  terms  expressly  expire  November  6,  1923),  that  "the  Licensees  shall 
pay  royalties  to  the  Licensors  for  the  use  of  all  processes  and  appliances 
embodying  all  or  any  of  the  inventions  described  and  claimed  in  the 
Letters  Patent  within  this  license"  at  the  rate  specified  by  the  agreement. 
Mr.  Cook,  at  my  sugestion,  telegraphed  to  New  York,  and  on  the  following 
day  received  from  the  President  of  Minerals  Separation  North  American 
Corporation  a  reply  to  the  effect  that  such  a  licensee  would  not  be  obli- 
gated to  continue  to  pay  royalties  to  Minerals  Separation.  Since  this 
same  official,  in  a  letter  read  by  Mr.  Cook  on  the  previous  day,  had  stated 
that  the  obligation  to  pay  royalties  continued  so  long  as  the  process  was 
used,  and  since  the  vice-president  of  Minerals  Separation  North  American 
Corporation  had  similarly  testified  in  the  Federal  Trade  Commission  pro- 
ceeding (record  p.  580),  I  promptly  expressed  to  Mr.  Cook  my  grateful 
appreciation  of  this  apparently  magnificent  concession  by  Mineral? 
Separation. 

Complex  Situation  Arising  from  Many  Patents 

Further  discussion  of  the  same  point,  however,  promptly  developed  the 
fact  that  while  so  modifying  Article  1,  Minerals  Separation  was  by  no 
means  ready  to  modify  Article  5,  which  provides  that  "The  Licensees 
shall  not  directly  or  indirectly  during  the  continuance  of  this  License 
nor  at  any  time  after  the  determination  thereof  dispute  or  object  to  the 


THE  AMERICAN  MIXING  CONGRESS  157 

validity  of  the  Letters  Patent  within  this  License  or  the  novelty  or  utility 
of  the  inventions  specified  therein,"  and  that  therefore  any  licensee  using 
the  process  covered  by  No.  825,120  ("fraction  of  one  per  cent,  oil")  then 
expired  would  be  obliged  to  accept  Minerals  Separation's  opinion  as  to 
whether  such  process  was  covered  by  any  of  the  scores  of  other  "Letters 
Patent  within  this  license'"  and  would  be  prevented  by  Article  5  above 
quoted  from  ever  "disputing  or  objecting"  to  Minerals  Separation's 
opinion  on  this  subject.  The  record  in  the  Federal  Trade  Commission 
proceeding  abounds  in  expressions  of  Minerals  Separation's  opinion  to 
the  effect  that  every  conceivable  process  of  flotation  is  covered  by  one  or 
another  of  its  scores  of  patents,  so  that  so  long  as  Article  5  stands,  any 
licensee  who  after  November  6,  1923,  ventures  to  discontinue  paying  to 
Minerals  Separation  full  quarterly  royalties  upon  the  basis  specified  in 
his  license  agreement,  may  be  sued  by  Minerals  Separation  for  alleged 
infringement  of  any  of  its  scores  of  other  patents,  and  by  the  provisions 
of  Article  5  will  be  estopped  from  ever  disputing  or  objecting  to  the 
validity  of  such  patent  or  the  novelty  or  utility  of  the  alleged  invention 
specified  therein. 

This  apparently  magnificent  concession  by  Minerals  Separation,  with 
which  Mr.  Cook,  by  his  gallant  and  chivalrous  manner,  succeeded  in 
raising  high  hopes  among  his  listeners  at  the  Convention,  thus  proved 
to  be  entirely  illusory.  That  every  other  restraint  above  described,  im- 
posed by  Minerals  Separation's  standard  license  agreement,  was  in  effect 
eternal  because  of  the  ingenious  provisions  above  described,  for  extending 
the  life  of  the  agreement,  was  not  disputed  by  Mr.  Cook. 

CHAIRMAN  COLLINS:  The  meeting  will  now  stand  adjourned,  and 
will  re-convene  this  afternoon  at  2  o'clock  in  Conference  Room  A, 
downstairs. 


WEDNESDAY,  NOVEMBER  17,  1920,  2  P.  M. 

/ 

CHAIRMAN  COLLINS:  The  flotation  conference  will  come  to  order. 
For  the  benefit  of  any  of  you  who  may  not  have  been  here  this  morning. 
I  will  mention  that  papers  were  read  by  Mr.  George  L.  Nye,  and  Mr.  Gil- 
bert Montague;  that  Minerals  Separation,  represented  by  Mr.  Alfred  A. 
Cook,  one  of  the  directors  and  counsel,  would  answer  these  papers.  Mr. 
Nutter,  the  chief  engineer,  and  Mr.  Allen,  the  secretary  of  the  corporation, 
are  also  with  us. 

MR.  COOK:  Mr.  Chairman  and  Gentlemen  of  the  Mining  Congress:  I 
am  somewhat  embarrassed,  by  reason  of  the  fact  that  I  am  here  at  your 
invitation,  and  it  therefore  behooves  me  to  say  nothing  that  might  be 
regarded  as  unkind,  unduly  critical,  or  offensive.  I  am  also  embarrassed 
by  the  more  than  professionally  kind  and  generous  introduction  of  me 
to  you  by  my  friend  of  the  New  York  bar,  Mr.  Montague.  I  wish  that  I 
could  have  had  the  opportunity  of  familiarizing  myself  with  the  papers 


ir,8  REPORT  OF  PROCEEDINGS 

read  by  Mr.  Nye  and  Mr.  Montague  before  they  were  presented.     I  might 
then  have  had  the  privilege  of  offering  to  you  in  written  form  such  views 
as  I  thought  might  be  germane  to  the  discussion  and  helpful. 
Minerals  Separation  and  Federal  Trade  Commission 

Please  remember  that  in  connection  with  all  of  the  Federal  Trade 
Commission's  proceedings  from  which  quotations  were  amply  made, 
Minerals  Separation  has  not  yet  put  in  its  case.  It  is  still  the  Commis- 
sion's case;  it  is  only  what  the  witnesses  for  the  Commission  said  and 
testified  to — and  in  a  number  of  instances  withdrew  upon  cross-examina- 
tion. We  have  not  called  our  witnesses,  we  have  not  called  our  men,  and 
it  seems  to  me  that  we  might  await  the  verdict  of  the  jury  and  the  judg- 
ment of  the  court.  Now,  I  do  not  say  that  critically,  and  I  do  not  want 
to  be  offensive,  but  I  do  mean  to  say  it  has  not  been  quite  in  that  spirit 
that  Minerals  Separation  has  been  met  by  the  American  Mining  Congress. 
I  shall  speak  to  you,  if  time  permits,  of  the  attitude  of  Minerals  Separa- 
tion towards  the  mining  industry,  but  will  first  deal  with  the  attitude  of 
the  American  Mining  Congress  towards  Minerals  Separation. 

A  year  ago  at  St.  Louis,  Mo.,  without  any  conference  or  any  invitation 
to  us,  without  any  suggestion  upon  the  part  of  this  great  and  powerful 
organization  which  can  at  times  make  so  much  for  good  in  a  disinterested 
way,  and  at  others  so  much  for  bad,  no  attempt  was  made  by  anybody,  to 
ask  us  in  the  interest  of  the  mining  industry  to  attend.  Its  prosperity  is 
surely  our  prosperity.  What  did  the  American  Mining  Congress  do? 
Instead  of  coming  to  us  or  even  writing  to  us  through  its  Secretary,  it 
filed  allegations  and  charges,  and  impressed  the  Federal  Trade  Commis- 
sion with  the  fact  that  the  Minerals  Separation  companies  are  German- 
controlled.  At  your  meeting  in  St.  Louis,  an  address  was  read  by  Mr. 
Nye,  page  after  page  of  which  charged  Minerals  Separation  with  being  so 
controlled.  Unless  the  facts  substantiate  a  charge  of  that  kind,  that  is 
going  not  only  far  afield,  but  is  hitting,  if  I  may  say  it,  below  the  belt. 

Fighting  Spirit  of  American  Mining  Congress 

In  a  letter  that  he  recently  wrote  to  the  American  Institute  of  Mining 
Engineers,  your  worthy  and  deserving  Secretary  said  that  the  American 
Alining  Congress  was  a  fighting  organization,  and  that  such  was  its  greatest 
strength  and  its  greatest  weakness.  Yet  I  want  to  say  even  though  my 
clients  and  I  are  to  be  the  recipients  of  its  fighting  force  and  its  fighting 
organization,  that  if  there  must  be  a  fight,  the  fight  should  be  fair.  This 
article  was  distributed  throughout  the  country,  and  the  Federal  Trade 
Commission,  before  its  complaint  was  ever  served  on  Minerals  Separa- 
tion, announced  in  the  public  press  contemporaneously  with  the  filing  of 
the  complaint,  this  alleged  German-control.  I  speak  of  the  article  now 
because  since  my  coming  to  Denver  I  have  been  furnished  with  reprints 
of  the  article.  To  what  extent  it  has  been  distributed  to  the  members  of 
the  American  Mining  Congress,  I  don't  know,  but  I  have  here  one  of  these 
reprints.  In  this  article  the  assertion  was  made  that  two  gentlemen 
residing  in  England,  were  in  effect  secret  German  agents  and  through 
their  ownership  or  control  of  a  majority  of  the  shares,  arrangements  were 


THE  AMKKK'AN  MIXING  CONGRESS  ]•'•!» 

made  so  that  Minerals  Separation  could  function  in  this  country  as  a 
German-controlled  company.  Who  were  these  two?  If  any  of  you  have 
some  of  these  reprints  I  refer  to,  you  can  see  mention  of  the  names  of 
Kindersley  and  Pusch.  Who  were  they?  The  former  is  Sir  Robert  Kin- 
dersley,  a  governor  of  the  Bank  of  England,  a  director  of  the  Hudson  Bay 
Co.,  and  throughout  the  war  the  head  of  the  War  Savings  and  Victory 
Loan  movement  of  England,  recently  knighted  and  given  by  his  King  the 
honors  that  fall  to  honest  and  deserving  patriots.  And  who  was  Pusch? 
A  Russian  who  came  to  England  years  ago,  a  naturalized  Englishman 
who  lost  two  of  his  sons,  officers  in  the  British  cavalry  in  the  war,  and 
when  England  sent  its  Commission  to  Russia  during  the  war  he  was 
either  one  of  the  members  or  the  head  of  that  Commission! 

Investigation  of  Minerals  Separation 

Of  course  I  know  the  force  and  effect  of  propaganda.  I  know  that  a 
rumor  here  and  a  rumor  there  grows  and  forces  itself  throughout  any 
industry,  throughout  any  community,  and  even  gets  to  the  ears  of  the 
Government,  and  so,  practically  at  the  instigation  of  the  American  Min- 
ing Congress,  we  had  visited  upon  us  for  weeks  and  months  the  Alien 
Property  Custodian,  who  goes  through  our  affairs  from  beginning  to  end 
to  determine  whether  this  charge  of  German  control  is  correct.  Also  the 
U.  S.  Bureau  of  Mines  comes,  and  the  Federal  Trade  Commission  comes, 
and  every  conceivable  Government  agency.  In  1917  the  Canadian  Gov- 
ernment examined  us.  You  heard  the  charge  made  this  morning  that  if 
royalties  are  unreasonable  in  Canada  the  patent  is  forfeited;  yet  after 
that  investigation  by  the  Dominion  Government,  Minerals  Separation 
completely  cleared  itself.  Xow,  there  must  be  some  reason  and  some 
element  of  justice  in  the  decision.  So  far  as  the  two  gentlemen  whose 
names  were  mentioned  are  concerned,  I  did  call  the  attention  of  the 
Mining  Congress  to  the  great  injustice  that  it  had  done  them,  and  to  its 
credit  be  it  said  that  an  apology  was  forthcoming. 

Let  me  take  up  another  matter.  Recently  there  appeared  in  the 
Engineering  and  Mining  Journal  an  article  headed:  'Western  Hearings 
of  Minerals  Separation  Companies  by  Federal  Trade  Commission,'  and 
there  were  abstracts  or  attempted  abstracts,  in  that  article.  One  of  this 
was  as  follows:  "One  licensee  who  testified  that  his  relations  with  Min- 
erals Separation  had  been  pleasant  said:  'The  royalty  is  too  high  *  *  * 
we  regard  it  as  entirely  too  high  *  *  *  It  becomes  a  very  burdensome 
charge.' "  Those  words  were  used,  but  in  connection  with  other  words, 
and  my  only  thought  on  the  subject  is,  as  long  as  we  are  to  have  a  fight, 
let  us  be  fair  with  each  other  and  play  the  game.  This  is  what  was 
testified  to  by  the  witness:  "I  do  not  say  I  regard  it  as  too  high  under 
those  conditions.  I  say  under  present  conditions  we  regard  it  as  entirely 
too  high.  When  I  am  not  making  any  money  at  all,  it  becomes  a  very 
burdensome  charge."  Whether  that  is  helpful  to  the  Mining  Congress  or 
not,  we  were  entitled  to  be  quoted  correctly. 


160  REPORT  OF  PROCEEDINGS 

Questions  not  Answered 

In  the  case  of  the  Evergreen  Mining  Co.,  represented  at  the  Federal 
Trade  Commission's  hearings  by  Mr.  Hollister,  it  was  shown  that  their 
mill  was  not  closed  because  ef  Minerals  Separation,  but  on  account  of 
troubles  with  the  machinery.  When  asked  what  oil  he  was  using,  and 
whether  he  was  using  less  than  20  Ib.  to  the  ton  of  ore  treated,  Mr. 
Hollister  declined  to  answer,  just  as  many  other  witnesses  declined  to 
answer  the  same  question,  although  some  did  tell  what  they  were  using 
and  what  they  were  doing.  Now,  either  there  was  infringement  or  there 
was  not.  If  a  man  is  not  infringing,  he  does  not  mind  the  question. 
When  Mr.  H.  D.  Williams  wrote  a  letter  to  the  Evergreen  company  and 
others  to  stop  infringing,  we  [Minerals  Separation]  are  threatening  them; 
we  are  coercing  them;  we  are  abusing  them,  and  we  are  doing  things 
that  the  law  condemns.  If  we  did  all  these  things,  here  was  the  oppor- 
tunity for  Mr.  Hollister  at  least  to  prove  to  him  beyond  doubt  that  at  any 
rate,  so  far  as  our  letter  to  him  was  concerned,  it  should  not  have  been 
written.  Why  was  it  written?  Because  the  Patent  Law  says  that  if  you 
learn  of  infringement  you  ought  to  give  notice  of  some  kind  to  the  in- 
fringer  of  your  rights. 

I  am  somewhat  limited  in  what  I  can  or  want  to  say.  As  I  am  not  a 
patent  lawyer  I  will  not  be  able  to  discuss  the  patent  situation.  I  do  not 
think  that  arguments  pro  and  con  between  the  lawyers  on  each  side,  or 
the  submission  of  patent  questions  to  the  Mining  Congress,  can  bring 
forth  anything  useful,  unless  it  be  with  a  view  to  determine  first  what 
each  claims.  I  shall  not  speak  of  patent  law,  if  for  no  other  reason  than 
that  the  various  matters  are  before  the  courts,  and  so  far  as  I  am  con- 
cerned, they  are  in  the  hands  of  patent  counsel,  and  I  do  not  think  it 
would  be  correct  or  proper  for  me  professionally  to  discuss  a  situation 
which  is  sub  judice. 

The  Status  of  Patents 

I  do  want  to  make  one  comment,  subject  to  correction  by  my  Company 
or  the  patent  lawyers,  should  I  be  wrong,  and  that  is  concerning  what 
Mr.  Montague  said.  I  understood  him  to  say  that  if  any  particular  com- 
pany is  using  the  oil  patent  No.  835,120,  when  it  expires  in  1923,  and  a 
licensee  of  Minerals  Separation  uses  none  other  of  its  patents,  neverthe- 
less, beyond  1923,  Minerals  Separation  claims  the  right  to  continue  to 
exact  royalties  from  its  licensees  indefinitely.  (I  may  be  wrong,  but  that 
can  easily  be  determined  upon  inquiry.)  In  other  words,  if  when  1923 
conies,  and  a  licensee  do'es  not  use  any  of  Minerals  Separation  patents,  I 
do  not  understand  that  he  must  pay  any  royalty  to  Minerals  Separation. 
If,  when  the  1923  patent  has  expired,  and  he  uses  any  other  patent — 
let  us  say  the  soluble  frothing  agent  patent — then  his  royalty  continues. 
If  he  ceases  using  it,  he  pays  no  royalty.  No  licensee  is  called  upon  to 
pay  any  royalty  unless  he  uses  a  Minerals  Separation  patent  within  the 
period  allowed  by  law.  It  is  possible  I  may  have  misunderstood  Mr. 
Montague.  It  may  be  that  he  did  not  assert  that  that  was  our  claim. 

You  listened  patiently  this  morning  to  the  reading  of  a  great  many 


THE  AMERICAN  MIXING  CONGRESS  161 

extracts  from  a  license  agreement;  and  yet,  why  that  agreement  of 
Minerals  Separation,  abandoned  in  December,  1917,  should  furnish  the 
gravamen  of  charges  made  against  us,  is  absolutely  beyond  me.  There* 
is  no  justification  for  referring  to  our  old  license  agreement  when  we 
have  a  new  one,  from  which  have  been  eliminated  a  great  many  features 
criticised  in  one  of  the  addresses  this  morning.  One  of  these  features 
concerns  manufacturers  of  flotation  machines,  but  since  December,  1917, 
there  has  never  been  a  time  under  the  license  agreement  when  a  manu- 
facturer could  not  sell  his  machine  to  any  licensee  of  Minerals  Spara- 
tion.  All  that  is  required  is  that  the  licensee  ask  our  consent  to  its 
purchase,  which  under  the  new  agreement  we  must  do.  Another  feature 
covered  the  inventions  by  Minerals  Separation  employees,  by  which 
they  had  to  assign  them  to  the  company;  that  has  also  been  eliminated. 

[Following  this,  a  discussion  concerning  the  old  and  new  agreements 
arose  between  Mr.  Montague  and  Mr.  Cook,  and  the  latter  digressed 
into  the  why  and  wherefore  of  certain  restrictions.] 

Literature  on  Flotation 

We  have  been  told  that  there  is  little  literature  upon  the  subject  of 
flotation,  but  I  say  that  if  you  want  a  history  of  the  process,  if  you  want 
everything  connected  with  it,  read  the  specifications  of  Minerals  Separa- 
tion patents.  These  are  given  to  each  of  our  licensees.  In  them  you 
will  find  the  history  of  everything  we  have  done. 

In  our  agreement,  we  say  to  licensees  that  if  they  invent  or  improve 
something,  they  should  give  it  to  us.  Whatever  we  get  belongs  to  each 
of  our  licensees,  without  extra  charge,  under  the  same  royalty  provision 
and  the  same  royalty  agreement.  That  is  beneficial  to  us,  also  licensees. 
For  instance,  if  the  Anaconda  Copper  Mining  Co.  discovers  something 
which  is  an  improvement  on  our  processes  and  our  patents,  and  gives 
it  to  us,  the  right  to  use  that  improvement  belongs  to»  every  licensee. 

[Mr.  Cook  then  recounted  at  considerable  length  the  following  points, 
which,  more  or  less,  have  been  covered  in  the  technical  press  and  are 
generally  known: 

The  Alien  Property  Custodian's  methods  of  investigating  Minerals 
Separation;  the  alleged  oppression  of  the  mining  industry;  who  were  the 
inventors  of  flotation;  flotation  patents  in  the  courts;  Minerals  Separa- 
tion was  the  first  to  introduce  air-froth  flotation  in  America;  what  Mr. 
John  Ballott  said;  the  Hyde-Nutter-Butte  &  Superior  affair;  the  Jack- 
ling-Hayden,  Stone  properties  and  their  attitude;  that  from  November, 
1913,  to  December  31,  1916,  Butte  &  Superior  made  a  profit  by  flota- 
tion of  $20,876,247  from  1,773,820  tons  of  ore,  and  that  these  are  the 
main  figures  upon  which  the  accounting  for  infringement  is  now  pend- 
ing (it  may  take  5  years  to  complete  it);  Minerals  Separation's  work 
on  porphyry  copper  ores,  Inspiration  being  the  first,  where  great  im- 
provements in  recovery  were  made  by  flotation;  Miami  declined  as- 
sistance, built  a  flotation  plant,  resulting  in  the  Miami  suit;  Miami, 
while  not  controlled  by  the  Jackling-Hayden,  Stone  interests,  acted  in 


162  REPORT  OF  PROCEEDINGS 

close  co-operation  with  it;  save  these  two  groups,  every  large  company 
has  acknowledged  Minerals  Separation's  patent  rights  and  pay  royalty; 
there  are  450  unlicensed  users  of  flotation  who  were  told  that  they  could 
get  licenses  upon  their  making  an  adjustment,  which  some  did;  legally. 
Minerals  Separation  has  the  right  to  issue  injunctions,  but  has  not; 
Anaconda  made  the  first  and  only  contract  with  Minerals  Separation  even 
when  the  courts  had  said  the  latter  had  no  patent,  etc.] 

Apparent  Discrimination  in  Royalty  Charges 

Regarding  Mr.  Nye's  allegation  that  Minerals  Separation  charged  one 
company — the  Chichagoff  in  Alaska — 50  cents  an  ounce  of  gold  recovered 
by  flotation,  and  another — the  Vindicator  in  Colorado — using  substantially 
the  same  process,  was  charged  25  cents  an  ounce,  Mr.  Cook  explained 
that  the  former  treated  the  tailing  from  a  $40  ore,  while  the  latter 
treated  $4  mine  ore.  Chichagoff  paid  50  cents  an  ounce  of  gold  recovered 
by  flotation,  but  Vindicator  paid  25  cents  per  ounce  on  all  gold  recov- 
ered; yet  each  has  the  option  of  adopting  the  other  royalty,  so  where  is 
the  discrimination? 

Mr.  Cook  asked  whether  in  a  period  of  9  years — 1911-1920 — any  process 
has  been  used  or  developed  to  the  good  of  the  country  as  this  method 
of  turning  waste  into  value  ? 

The  U.  S.  Bureau  of  Mines  was  informed  during  the  war  that  Minerals 
Separation  would  not  ask  royalties  from  those  who  chanced  to  be  op- 
pressed, provided  those  who  were  the  beneficiaries  of  this  offer  also 
would  offer  to  the  Government  that  the  profit  which  would  otherwise 
inure  to  them  by  the  use  of  flotation  would  not  be  claimed  or  collected. 

The  Minerals  Separation  had  been  met  in  a  slightly  different  spirit 
than  that  in  which  it  has  been  met  would  have  been  better  for  the  mining 
industry  and  for  the  company.  There  should  be  no  antagonism  between 
the  two.  Minerals  Separation  has  done  too  much  for  the  mining  industry. 

Suggested  Joint  Committee  to  Discuss  the  Dispute 

I  think  that  if  the  American  Mining  Congress  undertook  through  its 
directorate  to  appoint  a  committee  of  men  in  the  mining  profession — 
unbiased  and  judicially  minded — and  told  them  to  take  up  with  us,  we 
will  be  glad  to  confer  with  them;  and  so  eliminate  much  in  the  way  of 
misunderstanding  and  litigation.  I  am  thinking  that  we  should  sit  down 
in  a  calm,  judicial,  dispassionate  way,  determine  what  is  right  and  fair, 
and  if  that  is  done,  truly  the  Mining  Congress  is  an  American  Mining 
Congress.  (Applause.) 

CHAIRMAN  COLLINS:  Are  we  to  understand  that  your  last  sug- 
gestion is  a  formal  invitation  to  the  American  Mining  Congress? 

MR.  COOK:  Mr.  Chairman,  I  have  tried  to  be  informal  in  my  re- 
marks. I  do  not  know  whether,  in  view  of  the  fact  that  the  matters 
we  are  talking  about  are  being  investigated  by  the  Federal  Trade 
Commission,  I  would  have  a  right  to  extend  a  formal  invitation.  This 


THE  AMERICAN  MINING  CONGRESS  163 

is  my  view  on  the  subject.  If  your  committee  is  appointed,  I  know 
that  if  the  suggestion  I  have  made  meets  with  favor,  we  will  be  glad 
to  meet  you. 

CHAIRMAN  COLLINS:  Mr.  Cook,  I  will  continue  my  question,  and 
ask  whether  it  is  your  wish  that  the  Chairman  of  this  meeting  should 
convey  that  expression  of  opinion  to  the  president  of  the  American 
Mining  Congress,  and  ask  you  to  meet  him? 

MR.  COOK:  Unhesitatingly,  if  you  please,  convey  to  the  Mining 
Congress,  the  Board  of  Directors,  this  earnest  suggestion. 

CHAIRMAN  COLLINS:  The  Chairman  will  have  the  honor  of  con- 
veying that  expression  of  opinion  to  the  president,  Mr.  Bulkeley  Wells, 
and  we  will  try  and  arrange  for  you  to  meet. 

MR.  COOK:     Thank  you. 

MR.  MONTAGUE:  Mr.  Chairman,  before  we  consider  the  question 
it  might  be  worth  while  ascertaining  if  a  single  suggestion  of  recession 
from  the  present  position  has  been  made  in  the  two-hour  talk  by  Mr. 
Cook.  We  should  know  whether  we  have  anything  to  confer  about. 
Not  a  single  suggestion  has  been  made  by  Mr.  Cook  receding  from 
his  position. 

MR.  ROHN:  Mr.  Chairman,  I  think,  as  everybody  else  feels,  that 
are  all  tired  after  listening  for  a  whole  day,  but  it  seems  to  me  that 
we  have  just  accomplished  very  little  indeed  if  we  go  away  at  this 
time.  I  want  to  say  that  our  relations  with  Minerals  Separation  have 
been  entirely  friendly.  I  do  not  believe  that  any  reasonable  man  who 
comes  down  to  the  facts  will  deny  that  Minerals  Separation  has  done 
a  great  deal,  first,  to  introduce  notation  in  this  country,  and  secondly  to 
promote  it;  so  any  fair-minded  man  should  grant  them  a  fair  return 
for  what  they  have  done.  But  the  thing  that  concerns  me  is  this: 

An  Iron-Bound  Contract 

I  made  a  contract  with  Minerals  Separation  in  a  certain  form,  very 
carefully  worded  by  them.  I  don't  know  what  it  means;  I  had  no 
choice.  It  is  either  take  that,  or  take  a  lawsuit.  We  were  in  no  position 
to  fight  them,  therefore  we  took  what  they  gave  us,  and  I  am  anxious 
to  know  what  it  means.  Must  we  pay  the  rate  we  have  been  paying 
for  the  rest  of  our  natural  lives — or  as  long  as  we  continue  to  operate — 
or  when  this  patent  expires,  if  it  terminates  in  1923,  on  the  particular 
process  that  we  are  using,  namely,  oil  in  quantities  of  less  than  1%; 
and  whether  mechanical  action  to  beat  up  the  froth — whether  when  that 
expires,  we  are  through  paying  them.  I  do  not  believe  anybody  has 
a  quarrel  with  Minerals  Separation  on  the  fact  that  they  are  entitled  to 
compensation;  I  think  that  the  whole  trouble  is  over  this  contract. 

I  have  listened  intently  to  Mr.  Cook  to  hear  what  he  said  on  the 
matter;  and  I  heard  him  say  that  he  personally  thought  there  would  be 
no  intent  or  no  attempt  on  the  part  of  Minerals  Separation  to  force  indi- 


1G4  KKPOKT  OF  PROCEEDINGS 

viduals  to  continue  to  pay  royalty  after  the  patent  expires  on  the  par- 
ticular, specific  process  that  they  are  using;  but  I  also  noticed  that  he 
reserved  correction  on  that,  that  he  reserved  the  right  to  be  corrected 
by  his  company.  It  seems  to  me  that  is  the  one  thing  which  counts. 
If  he  can  give  us  some  assurance  on  that,  then  I  think  our  day  has 
been  of  some  value;  if  he  cannot  give  us  any  assurance  or  any  enlight- 
ment,  I  don't  see  what  we  have  accomplished  by  sitting  here  and  listen- 
ing to  a  whole  day's  talk. 

Two  Types  of  Argument 

I  was  impressed  by  the  addresses  of  Mr.  Montague  and  Mr.  Nye. 
It  seems  to  me  that  those  gentlemen  were  talking  advisedly,  and  seem- 
ingly had  a  sound  foundation  for  the  statements  they  made;  but  in 
listening  to  Mr.  Cook,  all  that  I  have  been  able  to  get  is  that  he  has 
made  certain  assertions,  but  upon  the  main  point  he  has  not  been  willing 
to  commit  himself.  Now,  may  we  understand,  Mr.  Cook,  that  in  1923 
the  patents  covering  a  small  amount  of  oil  is  going  to  expire,  and 
thereafter  those  who  use  just  that  thing,  and  no  other,  pays  royalty? 

MR.  COOK:  I  told  you,  Mr.  Rohn,  just  what  I  knew  and  thought  on 
that  particular  subject. 

MR.  ROHN:  Mr.  Chairman,  is  it  your  understanding  from  what  Mr. 
Cook  has  said  that  Minerals  Separation  will  meet  the  committee  from 
the  Mining  Congress,  and  will  discuss  and  meet  fairly,  this  question  of 
whether  they  have  a  strangle-hold  on  the  mining  industry  for  the  rest 
of  our  natural  lives,  or  whether  this  patent  is  going  to  expire? 

[Thereupon  a  discussion — some  of  it  acrimonious — ensued  between 
Messrs.  Cook,  Rohn,  Montague,  Nye,  and  the  Chairman.  Mr.  Nye  dis- 
puted Mr.  Cook's  explanations  of  German-control  of  Minerals  Separation, 
the  methods  of  payment  by  the  Chichagoff  and  Vindicator  companies,  the 
peculiarities  of  the  Anaconda  contract,  and  that  if  Mr.  Ballot  refused  to 
give  the  Federal  Trade  Commission  figures  as  to  Minerals  Separation's 
earnings,  Mr.  Hollister  was  also  entitled  to  decline  to  reply  to  queries 
as  to  the  Evergreen  Company's  operations.  Mr.  Nye  also  told  why  Min- 
erals Separation  is  so  disliked  in  America,  and  discussed  the  "less  than 
1%  of  oil"  factor  in  flotation.  Mr.  Montague  suggested  that  Mr.  Cook 
wire  to  New  York  as  to  the  termination  of  royalties.] 

CHAIRMAN  COLLINS:  With  reference  to  what  Mr.  Cook  said  as  to 
never  having  had  the  courtesy  of  an  invitation  to  the  meeting  at  St. 
Louis  last  year,  your  present  Chairman  wrote  a  letter  asking  repre- 
sentatives of  Minerals  Separation  to  be  present,  and  personally  I  am 
confident  that  the  printed  invitations  were  actually  mailed  last  year; 
and  I  think  that  it  is  very  probable  that  they  went  into  the  waste-basket 
and  none  of  the  officers  received  those  invitations.  The  hour  is  getting 
late,  and  it  is  going  to  be  impossible  to  hold  this  meeting  much  longer. 
Mr.  Montague,  will  you  please  read  those  resolutions? 


THE  AMERICAN  MINING  CONGRESS  165 

*  MR.  MONTAGUE:     Mr.  Chairman,  the  Resolutions  Committee  is  now 
in  session  and  wants  to  get  any  resolutions  coming  from  this  Conference. 

I  Thereupon  the  resolution,  approving  the  Mining  Congress  stand  on 
Minerals  Separation,  introduced  by  Mr.  Montague,  was  read  and  handed 
to  the  Resolutions  Committee,  and  reported  back  by  that  Committee  to 
the  Sixth  General  Sessions  of  the  Mining  Congress,  which  finally  ap- 
proved of  tne  lorm  as  appearing  among  final  Resolutions,  page  53.] 

DR.  COTTRELL:  I  venture  to  interpose  a  word  at  this  juncture  from 
the  point  of  view  of  a  more  or  less  impersonal  onlooker  who  from  past 
experience  is  in  a  position  to  sympathize  on  the  one  side  with  anyone  who, 
having  developed  a  new  invention,  undertakes  to  get  his  money  back  and 
a  fair  return  for  his  speculative  risks  through  straight  out  licenses  rather 
than  by  an  operating  or  merchandising  policy;  and  on  the  other  hand, 
can  fully  realize  how  hard  it  is  to  work  out  in  advance  a  licensing  system 
thoroughly  consistent  within  itself  and  still  fair  in  all  its  varied  appli- 
cations. 

I  have  been  interested  for  years,  as  many  of  you  know,  in  the  study  of 
methods  for  arriving  at  a  fair  estimate  of  the  public  value  of  patents  and 
the  best  methods  for  their  licensing  and  exploitation,  so  that  I  may  per- 
haps be  in  a  better  position  to  think  dispassionately  and  objectively  on 
this  subject  than  some  others  here  who  quite  naturally  approach  it  from 
a  more  personal  and  specific  angle,  and  I  shall  be  glad  if  by  so  doing  I  am 
able  in  any  degree  to  lessen  the  evident  tension  in  this  meeting  and  help 
get  down  to  fundamentals. 

This  was  driven  home  to  me  as  I  sat  here  listening  to  the  discussion, 
especially  to  Mr.  Cook's  reference  to  my  remarks  of  last  night,  part  of 
which  I  would  like  to  reiterate  in  this  connection.  I  do  not  know  of 
anything  that  illustrates  better  what  I  was  trying  to  get  at  in  my  remarks 
last  night  than  this  discussion  today.  I  was  a  little  afraid  then  that  the 
real  point  of  what  I  had  to  say  would  be  missed,  for  lack  of  concrete 
applications  in  the  minds  of  my  hearers,  and  I  had  no  idea,  when  I  came 
here  today,  that  this  discussion  would  run  quite  so  close  to  the  form  of 
the  resolution  that  was  presented  last  night.  Many  of  you  doubtless  heard 
the  resolution,  but  if  the  Chair  will  permit,  I  am  going  to  beg  your  indul- 
gence while  I  read  it  again,  in  the  light  of  what  came  up  today,  because 
I  think  it  is  pertinent  to  this  question  of  the  appointment  of  a  committee, 
and  I  want  to  read  it  before  Mr.  Cook  leaves,  otherwise,  I  should  not  have 
taken  your  time  tonight: 

[Thereupon  Dr.  Cottrell  read  the  resolution,  which  in  slightly  amended 
form  appears  among  the  final  Resolutions.  1 

This  is  essentially  a  matter  of  public  policy  that  we  are  discussing,  and 
I  am  simply  suggesting  that  it  might  be  possible  and  expedient  to  avoid 
acrimony  in  this  particular  matter,  and  to .  get  at  it  in  a  larger  way, 
through  a  committee  of  this  general  type,  which  could  function  in  both 
capacities.  Such  a  committee  would  consider  not  only  this  particular 
case,  but  others  that  might  come  up,  and  would  work  with  other  bodies 


16G  REPORT  OF  PROCEEDINGS 

like  the  Chamber  of  Commerce  of  the  United  States,  for  example,  as  well 
as  with  Governmental  bureaus  and  the  Patent  Office.  I  bring  this  up  at 
the  present  time  so  that  you  may  have  it  in  mind,  think  it  over  tonight, 
and  take  it  up  if  desirable  at  tomorrow  morning's  session.  I  thank  you 
for  your  attention. 

CHAIRMAN  COLLINS:  This  Conference  is  going  to  meet  tomorrow 
morning  at  10.30  to  continue  its  work;  I  hope  that  all  of  you  will  be  pres- 
ent at  that  time. 

The  Chair  ventures  to  say  on  behalf  of  this  Conference,  and  to  repeat 
the  invitation  to  Mr.  Cook  and  his  colleagues  to  come  back  tomorrow 
morning  and  confer  again  with  us.  There  has  been  some  inevitable  fric- 
tion and  the  atmosphere  has  been  to  some  extent  dense.  I  hope  that 
sleeping  over  it  tonight  will  tend  to  make  us  simmer  down  a  little  and 
make  it  possible  to  continue  our  discussion  in  the  spirit  of  arriving  at 
some  conclusion  if  we  can. 


THURSDAY,  NOVEMBER  18,  1920,  10.30  A.  M. 

CHAIRMAN  COLLINS:  Gentlemen,  this  Conference  will  please  come 
to  order.  The  subject  of  the  discussion  initiated  yesterday  afternoon  is 
open  for  further  debate..  We  hope  to  hear  from  any  of  the  gentlemen 
present,  and,  personally,  the  Chair  would  be  very  glad  if  Mr.  Cook  could 
add  a  few  more  words  in  further  elucidation  of  his  position. 

MR.  COOK:  Mr.  Chairman,  you  were  good  enough  last  night  to  sug- 
gest after  the  meeting  had  been  adjourned  that  I  return  this  morning. 
I  think  that  you  made  that  suggestion  because  I  mentioned  during  the 
debate  that  it  was  not  my  purpose  to  return. 

CHAIRMAN  COLLINS:     Yes,  sir. 

MR.  COOK  (continuing):  Dr.  Cottrell  told  me  he  thought  that  I 
really  ought  to  return,  so  in  deference  to  your  request  and  his  suggestion 
I  have  done  so.  Considering  everything,  I  thought  that  I  could  get  a  tele- 
gram through  to  New  York  and  an  answer  by  this  morning,  so  I  sent  the 
following  wire: 

Minerals  Separation  Counsel  Wires  to  His  Principals 

"Denver,  November  17,  1920.  John  Ballot,  Hotel  Chatham,  48th  St.  and 
Vanderbilt  Avenue,  New  York. 

"Do  we  claim  that  if  a  licensee  uses  first  patent  in  suit  after  its  expira- 
tion in  1923,  and  his  operations  thereafter  do  not  come  under  any  other 
of  our  patents  that  he  nevertheless  must  continue  to  pay  royalty  as  long 
as  he  uses  the  process  of  the  first  patent.  Please  wire,  quick  answer." 

I  think  that  correctly  sets  forth  the  question  that  Mr.  Rohn  put  to  me, 
and  which  of  my  own  accord  I  brought  into  my  discussion,  because  I  had 


T1IK  AMERICAN  MIXING  CONGRESS  167 

understood  from  Mr.  Montague's  paper  that  he  thought,  or  rather  he 
charged  that  Minerals  Separation  was  claiming  the  right  to  collect  roy- 
alty from  its  licensees  under  this  first  patent  to  the  end  of  all  time.  I 
received  this  morning  the  following: 

Xo  Royalty  on  Expired  Patents 

"New  York,  November  18,  Alfred  A.  Cook,  Brown  Hotel,  Denver,  Colo- 
rado. 

"Thursday  morning.  Your  telegram  just  received.  The  answer  to  your 
question  is  'no.'  We  do  not  claim  payment  of  royalty  for  use  of  first 
patent  in  suit  or  any  other  patent  after  its  legal  expiration,  but  we  do 
claim  payment  of  royalty  for  use  of  any  other  of  our  unexpired  patents. 
John  Ballot." 

I  trust,  gentlemen  of  the  Mining  Congress,  I  have  met  what  you  may 
regard  as  the  obligation  you  have  imposed  upon  me,  and  answered  Mr. 
Rohn's  question  as  the  question  was  put.  (Applause.) 

CHAIRMAN  COLLINS:  Mr.  Rohn,  the  Chair  will  ask  whether  it  is  a 
clear  and  definite  answer  to  the  question  you  put? 

MR.  ROHN:  Mr.  Chairman,  it  certainly  is,  and  it  certainly  is  a  start 
in  the  direction  that  I  have  had  in  mind  when  I  put  the  question.  I  want 
to  say  that  I  did  not  wish  to  be  understood,  as  apparently  many  did  under- 
stand me,  of  throwing  the  gauntlet  down  to  Mr.  Cook  and  insisting  upon 
his  answering  a  lot  of  pointed  questions  that,  in  all  fairness,  he  cannot 
be  expected  to  answer  here,  but  the  purpose  of  my  question  was  to  start 
an  inquiry  and  to  start  a  discussion  along  the  lines  that  it  seems  to  me 
all  of  us  are  so  much  interested  in. 

MR.  MONTAGUE:  Mr.  Chairman,  I  want  to  put  myself  absolutely  in 
accord  with  Mr.  Rohn's  remarks.  Mr.  Cook's  statement  was  worth  coming 
from  New  York  to  Denver  to  hear,  and  if  the  American  Mining  Congress 
has  never  done  anything  else  than  to  get  that  splendid  statement  he  has 
made,  it  is  well  worth  all  the  trouble  of  this  whole  Convention.  (Applause.) 

Mr.  Montague's  Views 

The  reason  why  this  is  such  a  magnificent  thing  is  that  in  all  the  testi- 
mony that  has  been  given  to  the  Federal  Trade  Commission  the  emphasis 
has  always  been  on  the  period  of  the  use  of  the  process.  In  its  agreement, 
Minerals  Separation  states  that  licensees  shall  pay  royalties  to  the  li- 
censors for  the  use  of  the  processes  and  appliances  at  the  rate,  and  so 
on,  and  every  other  condition  in  the  contract  was  extended  every  time 
they  got  a  new  contract,  for  17  years,  and  therefore  everybody  who  has 
assumed  to  study  this  contract  thought  it  was  intended  that  it  should  be 
continued.  You  will  notice  that  even  in  that  statement  which  Mr.  Ballot 
made  yesterday  he  carefully  said  that  so  long  as  they  used  the  oil  process 
they  would  have  to  pay  royalties.  I  say  it  is  magnificent  to  have  this 
statement  from  him  to  the  mining  industry,  which  means  millions  and 
millions  of  dollars,  and  the  credit  for  it  belongs  to  the  American  Mining 
Congress. 


108  REPORT  OF  PROCEEDINGS 

That  statement  requires  a  change  in  my  paper  of  yesterday.  It  means 
that  at  the  expiration  of  that  date — 1923 — from  anyone  who  has  been 
using  the  oil  process,  he  absolutely  ceases  to  pay  his  royalty.  As  was 
stated  in  the  telegram,  Minerals  Separation  will  promptly  urge  that  if  you 
continue  to  use  that  same  process,  you  are  caught  under  some  other 
patent;  but  rely  on  that  statement  they  have  made,  and  refuse  to  pay 
your  royalties  from  that  point  on,  and  then  we  will  reap  the  real  result 
of  this  victory  and  Mr.  Cook's  statement. 

CHAIRMAN  COLLINS:  Let  me  introduce  you  to  Mr.  Nutter,  chief 
engineer  of  Minerals  Separation. 

MR.  NUTTER:  I  am  no  orator,  but  I  want  to  say  a  few  plain,  blunt 
facts  to  you.  Mr.  Montague  has  just  indicated  that  this  is  a  new  step 
that  Minerals  Separation  has  taken;  he  is  in  error.  As  long  ago  as  1912 — 
I  started  flotation  work  for  Minerals  Separation  in  1911 — that  question 
came  up  as  to  whether  our  license  would  expire  with  the  patent,  as  the 
patents  expired,  and  we  were  advised  that  no  contract  could  extend  the 
life  of  our  patents  beyond  their  legal  limit,  and  I  have  constantly  since 
then,  in  negotiating  licenses,  given  that  understanding.  If  there  are  any 
gentlemen  here  who  have  had  negotiations  for  licenses  with  me  per- 
sonally, and  have  asked  me  that  question,  they  know  that  I  am  speaking 
the  truth.  I  have  constantly  advised  those  since  then  who  have  asked 
me  that  question,  precisely  along  the  line  of  Mr.  Ballot's  telegram. 

Extending  Life  of  Patents  by  Contract 

The  question  came  up  again  in  the  Federal  Trade  Commission  hearing, 
and  charges  were  made  that  we  were  endeavoring  to  extend  the  life  of 
our  patents  by  contract,  and  so  I  thought  perhaps  I  had  been  going 
astray,  and  I  specifically  asked  Mr.  Ballot  a  good  many  months  ago  that 
precise  question  that  has  been  asked  and  answered  here  today,  and  he 
said  it  is  absurd  for  anybody  to  have  the  idea  that  we  would  endeavor 
to  extend  the  life  of  our  patents  beyond  the  legal  limits.  Mr.  Montague's 
statement,  or  implication,  that  this  is  a  new  step  on  the  part  of  Minerals 
Separation  is  in  error,  and  I  want  you  to  understand  it. 

There  have  been  a  number  of  points  that  have  come  up  in  this  discus- 
sion, and  I  think  that  I  can  give  some  explanation  in  regard  to  the  things 
about  which  we  have  been  criticised,  because  I  have  perhaps  been  nearest 
to  the  facts.  One  is  that  of  our  contracts  with  engineers  who  come  to  us 
and  want  to  be  taught  flotation;  that  was  a  condition  we  had  to  meet, 
and  not  a  theory  which  we  tried  to  impose  upon  the  mining  public.  Engi- 
neers have  come  to  me  a  number  of  times  and  have  asked  to  be  instructed 
in  flotation,  and  they  have  availed  themselves  of  the  facilities  of  our 
laboratory  and  office — for  weeks  at  a  time  in  some  cases — so  I  took  the 
matter  up  with  my  company,  and  then  I  told  such  engineers  that  we  would 
expect  to  be  fairly  treated  and  not  to  have  any  of  the  information  which 
they  obtained  in  rather  a  confidential  relationship  with  us,  used  to  our  dis- 
advantage. I  also  explained  to  them  that  we  were  working  on  the  ores  of 
a  great  many  licensees  and  prospective  licensees,  and  information  about 


THE  AMERICAN  MINING  CONGRESS  Itiit 

such  ores  was  necessarily  confidential;  so  a  contract  was  drawn  up  pro- 
viding that  such  information  be  not  used  to  our  disadvantage.  When 
engineers,  therefore,  have  come  to  us  asking  to  be  given  the  privilege 
of  learning  all  they  could  in  our  laboratory,  I  have  shown  them  the  con- 
tract and  said  that  we  would  expect  some  such  undertaking  to  be  given 
to  us,  and  they  had  entered  into  it  in  many  cases. 

Results  From  Company's  Laboratory 

I  think  perhaps  some  of  you  might  be  interested — some  of  you  already 
know  it — interested  in  what  we  are  trying  to  do  to  help  the  mining  indus- 
try in  a  technical  way.  We  maintain  at  San  Francisco  an  extensive  and 
complete  ore-testing  laboratory  and  works  for  the  flotation  process.  We 
have  men  as  skilled  as  we  can  find,  men  who  have  had  many  years  of 
experience  in  flotation  work,  and  we  have  made  it  a  constant  practice  to 
do  all  preliminary  testing  without  charge  to  those  who  send  us  samples. 
We  have  charged  for  the  assaying  that  has  been  done  in  connection  with 
the  tests  at  a  wholesale  rate.  We  were  really  forced  to  do  this,  because 
we  found  we  were  being  taken  advantage  of  by  those  who  merely  wished 
to  have  their  ores  assayed,  but  who  sent  in  ores  ostensibly  for  testing. 
We  would  do  a  lot  of  work  that  was  entirely  unnecessary. 

We  have  worked  on  a  great  many  problems.  First,  perhaps,  in  impor- 
tance was  the  treatment  of  the  porphyry  ores,  as  represented  by  that 
from  the  Inspiration.  We  got  the  first  results  in  our  laboratory  at  San 
Francisco,  which  led  to  the  hope  that  flotation  would  be  beneficial  in  at 
least  some  part  of  the  flow-sheet  of  the  Inspiration  mills.  Following  that 
work,  more  extensive  tests  were  made  at  the  mine,  where  results  were 
considerably  better  than  they  were  in  the  laboratory.  That  was  done 
under  members  of  the  Minerals  Separation  staff.  What  we  consider  an 
important  development  of  the  art  was  made  during  that  work,  namely, 
the  discovery  that  the  efficacy  of  reagents  was  greatly  increased  by  adding 
them  to  the  grinding  mills  instead  of  directly  to  the  flotation  machine. 
That  made  the  difference  in  the  Inspiration  ore  between  an  easy  success 
and  a  much  more  difficult  success.  Treatment  of  the  Calumet  &  Hecla 
native  copper  slime  was  also  worked  out  in  our  laboratory.  We  installed 
special  apparatus,  designed  to  handle  that  ore  under  the  conditions  which 
we  thought  it  needed,  and  we  got  results  which  interested  the  Calumet 
&  Hecla  people.  Following  our  report  of  tests,  the  special  machines 
were  put  in,  and  there  they  got  better  results  than  we  got  on  the  small 
scale,  not  along  precisely  the  line — that  is,  using  some  different  reagents — 
but  in  general  following  the  lines  that  our  testing  work  indicated.  These 
tests  were  in  charge  of  Minerals  Separation  engineers. 

First  Tests  at  Anaconda 

In  the  case  of  Anaconda,  I  think  that  if  Mr.  Matthewson  is  present  he 

will  corroborate  what  I  say  when  I  state  that  I  bothered  him  for  a  couple 

of  years   about  flotation  before  the  Anaconda  company   took  it  up,  and 

finally  they  thought  that  perhaps  we  might  be  able  to  treat  their  slime, 

I  at  least  do  some  good  on  this  product.  They  sent  us  samples,  and  we  got 


170  REPORT  OF  PROCEEDINGS 

results  in  our  laboratory  that  interested  them.  Following  that  work  we 
installed  a  special  testing  machine  in  their  mill  as  Anaconda,  and  the  re- 
sults there  again  were  better  then  we  are  able  to  get  in  our  laboratory. 
That  work  was  carried  on  in  co-operation  with  the  Anaconda  Testing 
Station,  and  members  of  the  Minerals  Separation  staff. 

Now,  these  are  a  few  of  the  outstanding  things  that  I  think  we  have 
helped  to  accomplish  for  the  mining  industry.  Take  the  case  of  the 
differential  flotation:  That  is  very  actively  being  pursued  now  at  a  good 
many  mines,  and  I  think  the  initiation  of  the  differential  has  been  wholly 
with  the  Minerals  Separation  staff. 

There  is  one  mine  I  have  in  mind  where  they  have  a  testing  plant — a 
plant  of  800  tons  a  day  capacity,  and  it  is  working  on  a  large  orebody — 
and  differential  flotation  has  added  between  five  and  ten  dollars  per  ton 
net  to  the  value  of  that  ore.  That,  I  think,  is  a  worthy  accomplishment. 
The  work  was  done  largely  by  the  staff  on  the  mine.  I  have  no  desire  to 
detract  from  the  credit  that  belongs  to  the  men  who  worked  on  it,  but 
the  initiation  was  with  Minerals  Separation. 

Those  are  the  larger  things  that  we  have  been  engaged  in.  There 
have  been,  of  course,  on  the  other  hand,  ores  that  we  have  not  been  able 
to  do  so  well  on  as  some  others  have. 

The  Clause  Relating  to  Inventions  of  Licensees 

Criticism  has  been  made  of  one  of  the  clauses  of  our  license,  namely, 
that  relating  to  having  inventions  owned  by  our  licensees  being  passed 
onto  Minerals  Separation.  A  prominent  mine  operator  of  Colorado  told 
me  some  years  ago  he  considered  that  clause  the  most  valuable  one  in 
the  license  for  the  licensee,  for  it  gives  him  without  further  royalty  charge, 
inventions  and  improvements  made  here  and  there,  and  every  place  all 
over  the  world,  by  those  who  had  licenses  from  Minerals  Separation,  and 
they  obtained  free  use  of  those  improvements  without  further  royalty 
charge. 

Some  rather  extraneous  discussion  followed,  after  which  Mr.  Montague 
asked  the  following: 

Suppose  that  Mr.  Rohn,  using  the  oil  process  stops  in  1923,  paying  his 
royalty,  and  suppose  that  Minerals  Separation  comes  back  at  him  and 
says:  "You  have  now  another  patent,"  will  Mr.  Rohn  be  free  to  stop 
paying  the  royalty  and  litigate  that  patent,  or  is  he  going  to  be  caught  on 
this  other  provision  of  the  contract  which  says:  "The  licensee  shall  not 
directly  or  indirectly  during  the  continuance  of  this  license,  or  any  time 
after  the  continuation  of  thereunder,  dispute  or  reject  the  validity  of  the 
invention  specified"?  If  after  Mr.  Cook's  statement  made  this  morning, 
it  leaves  Mr.  Rohn  free  after  1923  to  go  to  court  and  let  it  decide  whether 
he  is  actually  infringing  another  patent,  then  there  will  be  freedom  indeed, 
and  everything  I  have  said  about  the  magnificence  of  the  offer  will  be 
entirely  correct.  But  there  was  something  that  Mr.  Nutter  said  which 
leads  me  to  believe  even  after  1923  Minerals  Separation  will  catch  him 
on  this,  and  when  he  tries  to  raise  the  question  in  court  they  will  tell  you; 


THE  AMERICAN  MIXING  CONGRESS  171 

"You  cannot  raise  it,  and  as  to  any  one  of  those  other  sixty-five  patents 
you  cannot  ever  litigate."     Can  that  be  answered  now? 

MR.  COOK:  I  do  not  think  the  question  can  be  answered  now.  I  think 
that  will  be  a  question  very  properly  to  be  submitted  and  discussed  in 
New  York — questions  like  that  and  others  that  may  arise. 

I  do  want  to  call  Mr.  Rohn's  attention,  however,  to  the  fact  that  he  has 
received  the  advice  of  the  counsel  of  the  Mining  Congress,  and  if  for  any 
reason  or  other  that  claim  is  made,  he  should  not  pay  royalties,  that 
the  claim  would  be  an  improper  and  illegal  claim.  Now,  whether  that  is 
correct  or  not,  or  whether  or  not  it  is  said  on  the  spur  of  the  moment, 
there  is  no  need  of  referring  to  it  now,  and  perhaps  I  should  not  have 
made  any  reference  to  it. 

CHAIRMAN  COLLINS:     The  Chair  is,  anyway. 

MR.  COOK  (continuing) :  If  the  Mining  Congress  wants  to  meet  with 
us  and  to  have  answered  the  doubts  that  linger  in  their  minds,  if  my  sug- 
gestion of  the  appointment  of  a  committee  is  adopted — and  I  made  it  not 
in  the  interest  of  Minerals  Separation,  but  in  the  interest  of  the  entire 
situation — well  and  good. 

MR.  MONTAGUE:  My  advice  to  Mr.  Rohn  is  based,  of  course,  on  the 
assumption  that  when  he  says  we  shall  have  freedom  after  1923,  it  means 
Mr.  Rohn  shall  have  freedom  from  this  clause;  and  when  that  statement 
was  made  here  this  morning  so  frankly  that  after  1923  they  were  free, 
I  supposed  they  were  granting  freedom  from  this.  If  that  is  not  the  case, 
it  is  evidently  a  question  which  can  be  considered,  and  everything  I  said 
as  to  freedom  absolutely  falls  to  the  ground,  unless  the  breadth  of  the 
statement  made  by  Mr.  Cook  covers  this  clause  as  well  as  the  other. 
So  don't  let  anybody  be  under  any  misapprehension  as  to  what  I  said 
this  morning  as  to  your  freedom  unless  Mr.  Cook  will  absolutely  say  that 
after  1923  you  can  litigate  any  of  those  other  patents. 

MR.  ROHN:  Without  taking  too  much  time,  may  I  make  a  further  sug- 
gestion, Mr.  Chairman? 

CHAIRMAN  COLLINS:     Let  us  be  brief,  Mr.  Rohn. 

MR.  ROHN:  It  seems  to  "me  that  we  are  moving  absolutely  in  the 
right  direction.  It  must  be  clear  to  everybody  that  Minerals  Separation — 
and  I  certainly  do  not  begrudge  Minerals  Separation  wanting  to  get  out 
of  this  thing  everything  it  can — here  is  a  large  number  of  users  of  its 
process  that  want  to  get  out  of  it  everything  they  can,  and  the  matter  is 
one  for  negotiation.  We  cannot  negotiate  successfully  individually  and 
hope  to  get  much,  but  it  seems  to  me  we  can  negotiate  collectively.  It 
should  be  fair  to  have  a  board  representing  the  users  of  flotation  sit  down 
with  Minerals  Separation  and  thresh  out  the  101  questions  that  will  arise. 

Minerals  Separation  has  68  Flotation  Patents 

They  have  68  patents  pending.    What  they  cover  nobody  knows.    Some  of 
them  are  litigated;    some  are  not.     To  clear  up  the  whole  situation  it 


172  KEPORT  OF  PROCEEDINGS 

seems  to  me  that  if  a  board  representing  the  American  Mining  Congress 
sat  down  with  Minerals  Separation  that  would  be  the  most  direct  way  of 
bringing  it  to  a  head. 

CHAIRMAN  COLLINS:  We  have  with  us  Mr.  T.  A.  Rickard  of  San 
Francisco.  Mr.  Rickard  fortunately  was  not  here  yesterday  afternoon 
when  the  discussion  took  place.  I  know  that  he  has  ideas  on  this  subject 
that  are  very  germane  to  the  matters  that  lie  nearest  our  hearts  at  this 
time,  and  I  will  ask  him  to  address  the  conference. 

MR.  RICKARD:  Mr.  Chairman,  I  am  not  altogether  certain  that  I  am 
sorry  I  missed  the  discussion  yesterday  afternoon.  Yesterday  I  waived  the 
privilege  of  addressing  this  Conference,  because  I  have  the  pleasure  else- 
where of  attacking  Minerals  Separation,  and  I  have  availed  myself  of  it 
to  the  full.  Therefore,  I  am  not  anxious  to  continue  it  on  this  occasion. 
Moreover,  as  I  said  yesterday,  it  seems  to  me  that  that  the  gentlemen  on 
the  other  side — and  they  belong  to  the  opposition  so  far  as  I  am  con- 
cerned— that  they  were  courteous  in  coming  here,  and  it  seems  to  me 
that  if  I  were  in  their  place,  I  should  hate  to  site  here  and  be  attacked 
by  man  after  man  without  having  a  chance  to  get  back.  And,  moreover, 
I  think  these  gentlemen  were  not  given  copies  of  these  indictments,  and 
it  must  have  been  difficult  for  them  to  reply  extemporaneously. 

Animosity  Towards  Minerals  Separation 

Now,  I  venture  to  say  to  you  that  we  can  consider  nothing  with  a  com- 
mittee or  without  a  committee,  unless  we  face  this  matter  without  ani- 
mosity. Mr.  Rohn  said  he  had  no  animosity  towards  Minerals  Separation. 
I  think  most  of  us  have  some  animosity  towards  Minerals  Separation, 
and  we  will  get  no  good  by  disclaiming  it.  Personally,  I  am  strongly 
prejudiced  against  them,  but  it  does  not  make  me  none  the  less  fair. 

Mr.  Montague  has  described  a  statement  given  by  Mr.  Cook  as  "mag- 
nificent." I  see  nothing  magnificent  in  it;  I  think  it  is  a  huge  exaggera- 
tion to  call  it  magnificent.  Gentlemen,  you  were  in  the  soup  before,  and 
you  are  now  in  the  mulligatawny,  which  is  the  hottest  kind  of  soup. 

I  am  not  a  lawyer,  but  I  have  followed  this  litigation  with  keen  interest. 
I  know  very  well  that  with  the  patent  experts  the  matter  of  expiration  Is 
of  small  matter,  because  they  have  other  patents — 68 — and  many  of  them 
are  of  the  most  exclusive  character.  There  is  going  to  be  an  enormous 
amount  of  work  for  the  lawyer,  and  the  more  work  there  is  for  the  lawyer 
the  less  work  there  is  for  the  miners.  In  order  to  clear  the  ground,  I 
venture  to  say  one  thing:  Mr.  Nutter,  in  days  of  old  when  I  was  in. 
Colorado,  we  were  good  friends.  I  venture  to  say  to  you  that  what  he  said 
today  also  included  some  statements  that  were  intellectually  dishonest. 

Nine  Years  to  Show  that  Chalcocite  Could  be  Floated 

We  are  all  given  to  insist  that  our  actions  are  above  suspicion.  I  am 
intellectually  dishonest  continually,  although  I  am  not  aware  of  it.  I 
know  Mr.  Nutter  was  the  first  man  personally  to  show  that  a  chalcocite 
ore  could  be  treated  at  a  profit,  but  he  did  not  draw  your  attention  to  the 


THE  AMERICA^  MIXING  CONGRESS  173 

fact  that  the  patent  was  granted  in  the  United  States  in  1906  although  it 
was  not  used  until  1915 — nine  years.  And  why  did  it  take  nine  years 
before  this  process  was  used?  Because  the  metallurgists  of  Minerals 
Separation  said  it  was  not  suitable  for  ores  of  that  character.  Therefore, 
1  am  generous  enough  to  deny  the  credit  that  he  has  asked  this  morning. 

We  must  clear  the  ground  before  we  can  go  anywhere.  I  fear  we  are 
going  to  have  interminable  litigation.  It  is  costing  a  half  million  per 
annum  for  the  two  suits,  and  it  has  been  costing  that  many  years.  It  has 
been  costing  the  mining  industry  a  great  deal,  not  only  in  royalties — I 
think  the  royalty  feature  is  a  small  one  compared  to  the  tyranny  and 
imposition  or  position  in  which  the  mining  industry  has  been  placed,  and, 
moreover,  the  choking  of  investigation. 

That  laboratory  in  San  Francisco,  gentlemen,  I  don't  take  much  stock 
in  it,  I  am  sorry  to  say.  It  is  well  meant,  undoubtedly,  but  the  gentlemen 
who  own  that  laboratory  have  done  a  great  deal  to  check  research.  It  is 
to  their  interest  to  prevent  other  people  from  finding  out  things. 

Now,  I  have  this  suggestion  to  make:  The  litigation  is  going  to  be,  as 
far  as  I  can  see,  unending,  and  during  all  that  time  we  miners  are  going 
to  feel  it.  I  imagine,  judging  other  people  by  myself,  that  Minerals 
Separation  must  have  had  nearly  their  fill  of  litigation.  I  feel  that  the 
infringers  have  had  as  much  as  they  want,  although  they  are  thoroughly 
prepared  to  go  on.  In  fact,  the  position  is  now  where  the  stake  is  so 
great  that  neither  side  can  quit.  They  are  like  dogs  that  have  a  grip — 
they  cannot  let  go.  Now,  I  hesitate  for  a  the  moment,  because  I  want  to 
speak  carefully.  It  seems  to  me  that  the  time  has  come  when  those  of  us 
who  are  dissatisfied  should  be  able  to  suggest  some  sort  of  settlement,  and 
I  venture,  individually,  without  any  responsibility  from  others — I  am 

Suggestion  to  buy  M.  S.  Patents 

simply  a  looker-on  and  interested — br.t  it  seems  to  me  it  would  be  possible 
for  a  committee  to  act  fairly  and  intelligently  to  promote  a  settlement 
somewhat  of  this  sort,  and  I  make  it  now  because  a  concrete  suggestion 
is  a  good  point  of  departure  from  anything  of  this  sort.  It  seems  to  me 
that  all  of  the  American  rights  of  Minerals  Separation  should  be  pur- 
chased, that  the  sum  of  money  involved,  so  many  millions — we  will  call 
it  a  million,  if  you  like,  for  a  unit — of  course,  it  will  be  several  times 
more.  Then,  of  that  million,  a  large  part  will  be  collectible  at  a  fair 
royalty  from  those  who  have  in  the  past  applied  the  process  to  an  advan- 
tage; that  is  to  say,  the  principal  infringers  who  are  in  litigation,  and  who 
will  get  out  of  litigation  if  this  is  carried  through,  they  will  then  pay  a 
part  of  that  million  or  that  sum,  whatever  it  is,  and  on  that,  interest  will 
be  paid,  and  the  amount  will  be  amortized  or  redeemed  out  of  the  roy- 
alties hereafter  collectible.  Then  when  that  sum  has  been  redeemed, 
that  then  the  patent  shall  be  free  for  all  users  in  the  United  States  and 
North  America,  and  in  order  to  raise  this  settlement  from  the  merely 
financial  and  pettifogging  side,  I  venture  to  suggest  that  out  of  the  royalty 
these  should  be  at  least  one  cent  or  more  set  aside  for  a  research  fund 
for  the  further  development  of  metallurgy. 


174  REPORT  OF  PROCEEDINGS 

MR.  PAYNE  (Empire,  Colorado):  Mr.  Chairman,  as  I  understand  it, 
the  patent  in  1923  pertains  to  the  oil  process.  Does  that  mean  the  flota- 
tion process  as  applied  with  oil,  or  the  flotation  process  itself?  If  it  is 
the  flotation  process  itself,  can  we  use  it  without  further  royalty?  That, 
I  think,  is  the  question  we  would  like  to  know. 

CHAIRMAN  COLLINS:  I  think  the  Chair  can  answer  that.  Mr.  Nutter 
will  please  correct  me  if  I  am  in  error,  because  it  is  a  legal  question,  but 
we  want  to  avoid  legal  questions  for  the  present. 

MR.  COOK:  I  do  not  want  to  have  any  misunderstanding  about  it. 
I  am  not  going  further  to  take  up  the  time  of  the  conference,  and  I  am 
not  going  to  answer  any  more  questions  or  ask  them  hereafter.  I  think, 
Mr.  Rohn,  acting  upon  what  I  hoped  was  a  helpful  suggestion,  to  the 
effect  that  somebody  confer  with  us,  amply  meets  the  situation.  I  do  not 
see  how  anything  is  gained  by  answer  to  any  particular  question,  because 
if  that  question  is  answered,  either  favorably  or  unfavorably,  doubts  will 
exist  as  to  a  great  many  others.  Doubts  exist  in  my  own  mind;  there  is 
no  question  about  that.  The  best  way  to  solve  them,  I  think,  is  along  the 
lines  that  Mr.  Rohn  has  stated,  and  I  think  they  are  acceptable  to  Mr. 
Montague  and  Mr.  Nye.  They  are  acceptable  to  me. 

CHAIRMAN  COLLINS:  The  Chair  will  then  state,  subject  to  the 
approval  of  this  Conference — the  Chair  will  report  the  result  of  the  dis- 
cussion that  has  taken  place  today  to  the  president  and  the  directors  of 
the  American  Mining  Congress. 

MR.  COOK:  Before  you  adjourn  the  meeting  may  I  express  my  thanks 
to  the  Congress  for  their  indulgence  and  for  the  kindness  and  courtesy 
which  the  Congress  has  extended  to  me  and  to  my  associates.  (Applause.) 

CHAIRMAN  COLLINS:  This  portion  of  the  subject  which  deals  with 
the  discussion  is  now  closed.  The  matter  will  be  in  the  hands  of  the 
president  and  the  board  of  directors  of  the  American  Mining  Congress, 
and  not  in  the  hands  of  this  Conference.  The  Conference  is  not  over, 
although  this  particular  subject  is  over.  We  have  before  us  a  program 
that  may  call  the  practical  and  technical  side  of  this  discussion,  which 
has  been  lengthy,  and  which  has  been  shelved  in  favor  of  what  is  a  more 
urgent  question. 

Two  Interesting  Papers  on  Flotation 

We  have  with  us  today  Mr.  Philip  Argall.  Mr.  Argall  is  well  known  to 
all  of  you,  I  hope,  as  one  of  the  veteran  metallurgists  of  this  State.  He 
has  studied  flotation  and  taken  a  considerable  part  in  a  quiet  way  in  the 
development  of  cyanidation.  Mr.  Argall  has  consented  to  say  a  few  words 
on  the  modern  and  recent  development  in  flotation. 

MR.  ARGALL:  Mr.  Chairman  and  gentlemen  of  the  Congress:  This 
has  been  a  holiday  for  me.  I  have  had  a  regular  business  and  have  spent 
most  of  the  year  in  the  lower  altitudes,  and  I  have  been  somewhat  out 


THE  AMERICAN  MINING  CONGRESS  175 

of  touch  with  the  more  recent  developments.  What  I  have  to  say  has  been 
prepared  in  a  hurry. 

[Mr.  Argall's  paper  will  be  found  on  page  607  of  the  Proceedings.] 

CHAIRMAN  COLLINS:  The  next  paper  is  by  Dr.  Francis  A  Thomson, 
Dean  of  the  School  of  Mines,  University  of  Idaho.  He  has  been  kind 
enough  to  prepare  a  paper,  but  I  have  forgotten  the  exact  title.  However, 
the  subject  of  Dr.  Thomson's  address  is  in  brief,  the  indirect  effect  of  flo- 
tation on  metallurgy. 

[Dr.  Thomson's  address  will  be  found  on  page  610  of  the  Proceedings.] 

CHAIRMAN  COLLINS:  Is  there  any  one  present  who  has  any  ques- 
tions to  ask  or  any  remarks  to  make  on  these  papers. 

MR.  STANDER  (Kentucky):  Mr.  Chairman,  I  have  been  associated 
with  the  flotation  process  for  about  five  years,  and  during  the  last  week  I 
have  been  told  by  a  few  of  the  prominent  mining  men  that  in  oil  flota- 
tion, that  is,  when  oil  is  used,  we  are  coming  to  the  point  where 
one  oil  can  be  used  for  almost  all  types  of  ores,  or  whether,  as  the  prac- 
tice in  the  past,  you  have  to  develop  an  oil  for  more  or  less  every  type 
of  ore? 

MR.  THOMSON:  That  is  a  rather  large  question.  If  I  may  interpret 
it.  however,  I  would  like  to  emphasize  further  what  I  have  already  said, 
namely,  that  each  ore  is  a  problem  unto  itself,  and  that  as  far  as  our 
present  knowledge  of  the  art  goes,  there  is  no  prospect  whatever  of  our 
finding  any  one  oil,  any  one  reagent,  which  will  fit  all  ores,  nor  do  I  think 
that  is  ever  likely  to  become  the  case.  I  would  say  further  that  in  the 
matter  of  differential  or  selective  flotation — whatever  you  prefer  to  call 

Selective  Flotation 

it — the  problem  becomes  not  one  of  causing  the  sulphide  to  flow,  but  of 
preventing  various  sulphides  from  flowing.  For  instance;  in  the  zinc 
sulphides,  or  one  of  the  iron  sulphides,  if  you  wish  to  separate  zinc  and 
lead,  and  both  from  iron,  the  problem  really  is  to  flow  the  lead  while  leav- 
ing the  zinc  and  iron,  allowing  them  to  stay  down  or  drop  them,  after 
which  the  next  problem,  which  we  do  not  do  with  entire  success,  is  the 
raising  of  the  zinc.  We  find  that  the  more  valuable  minerals  flow  with 
almost  an  infinitesimal  quantity  of  oils.  That  statement  requires  elabora- 
tion, of  course.  There  are  doubtless  others  here  who  can  answer  it  much 
more  fully  than  I  can. 

CHAIRMAN  COLLINS:  Are  there  any  other  speakers?  I  would  like 
to  say  that  my  views  of  the  development  of  flotation  are  entirely  along 
the  lines  that  Dr.  Thomson  has  outlined.  There  is  one  little  difficulty, 
that  of  handling  some  sticky  flotation  products  with  the  shovel,  but  that 
is  usually  solved  by  the  use  of  dusting  the  shovel. 

MR.  ARGALL:  The  paper  read  by  Dr.  Thomson  is  elaborate  and 
covers  the  field;  nevertheless,  I  think  he  failed  to  mention  some  things. 


176       .  REPORT  OF  PROCEEDINGS 

Some  seven  years  ago  I  was  producing  a  great  deal  of  zinc  concentrates 
by  film  flotation,  using  considerably  over  1%  of  oil,  and  the  concentrate 
itself  contained  3  to  4%  of  oil.  The  first  complaints  we  had  were  from 
the  zinc  works  and  the  sulphuric-acid  plant.  They  would  not  buy  the  ore 
because  of  the  discoloration  of  the  acid  from  the  carbon  formed  during 
roasting.  We  made  a  contract  with  another  party  for  a  year's  output  from 
the  mill.  The  first  lot  put  through,  to  get  early  results  on  it,  resulted 
in  an  explosion  in  the  furnace,  blowing  out  the  end  of  one;  and  before 
we  got  over  that  excitement  another  blew  up  entirely,  the  roof  was 
blown  in.  Nowadays,  when  a  great  many  people  are  using  over  1%  of 
oil,  the  handling  of  concentrate  is  a  difficult  problem,  and  it  will  not  be 
received  at  all  by  manufacturers  of  sulphuric  acid,  so  that  the  only  remedy 
probably  is  a  light  roast  to  get  rid  of  the  oil.  And  then  that  carbon  might 
not  be  eliminated  unless  you  gave  a  pretty  strong  roast. 

CHAIRMAN  COLLINS:  Isn't  it  a  fact  that  such  is  usually  a  temporary 
difficulty?  In  other  words,  don't  we  often  obtain  the  ultimate  result  by 
the  use  of  that  quantity  of  oil? 

MR.  ARGALL:  The  particular  process  I  was  using  then  was  film 
flotation,  and  we  were  using  a  fuel-oil — crude  oil  from  the  wells.  We 
finally  got  an  oil  from  Kansas — I  forget  from  which  field.  It  gave  us  the 
best  result  in  the  engines  and  for  flotation,  so  we  only  had  the  one  oil, 
apart  from  the  lubricating  oil,  but  we  used  it  freely.  In  other  cases  where 
they  use  over  1%,  the  flotation  concentrate  is  difficult  to  handle  in  sul- 
phuric-acid plants,  but  I  hope  the  day  will  soon  come  when  oil  will  be 
abolished. 

CHAIRMAN  COLLINS:     We  will  now  have  a  paper  by  Mr.  Geary. 
The  Brown  Flotation  Machine 

Mr.  Geary  then  described  the  Brown  flotation  machine,  bearing  patent 
No.  1351155,  issued  on  August  31,  1920.  Briefly,  the  machine  consists  of  a 
rectangular  air-lift  compartment  between  a  feed-chamber  and  a  spitz- 
kasten,  all  three  in  communication  with  one  another.  Contrary  to  usual 
practice,  tailing  is  discharged  at  the  top  of  the  cell  rather  than  at  the 
bottom.  The  machine  takes  advantage  of  the  principle  of  surface  tension 
in  that  the  sulphides,  after  oiling,  are  quickly  deposited  in  a  thin  sheet- 
like  form  on  the  surface  of  the  froth,  with  a  minimum  chance  of  being 
wetted  by  the  solution.  They  also  travel  with  the  current  at  all  times. 
In  addition,  the  agitation  is  gentle,  and  full  advantage  is  therefore  taken 
of  the  selective  properties  of  the  flotation  oil.  Machines  are  treating- 
lead-silver,  molybdenum,  and  graphite  ores  successfully. 

CHAIRMAN  CO"LLINS:     This  conference  is  now  adjourned. 


THE  AMERICAN  MINING  CONGRESS  177 

EDUCATION  AND  PUBLIC  SERVICE  CONFERENCE 

American  Mining  Congress 
THURSDAY,  NOVEMBER  18,  1920,  10  A.  M. 

Mr.  F.  A.  Thomson,  Dean  of  the  School  of  Mines,  University  of  Idaho, 
at  Moscow,  Idaho,  presided. 

THE  CHAIRMAN:  It  becomes  my  duty  to  call  this  meeting  to  order, 
and  ask  you  to  elect  a  chairman  and  secretary  for  this  meeting.  That 
will  be  the  first  business  of  the  meeting,  and  when  that  has  been  disposed 
of  we  can  take  up  the  program. 

Thereupon  it  was  duly  moved,  seconded  and  carried  that  Mr.  F.  A. 
Thomson  be  elected  chairman  of  the  meeting. 

THE  CHAIRMAN:  I  think  the  next  business  is  whether  we  desire  to 
proceed  with  a  permanent  organization  of  the  American  Mining  Con- 
gress. The  main  subjects  to  which  this  organization  will  be  devoted 
are  the  study  of  the  State  Bureaus,  State  Geological  Surveys,  State  Min- 
ing Inspectors,  Commissions,  and  Commissioners  of  Mines,  and  so  on. 
all  of  whose  duties  are  similar — but  nearly  all  of  which  have  different 
names — to  the  Public  Mining  Service.  The  question  then  arises  whether 
it  is  the  wish  of  this  meeting  that  we  proceed  with  the  permanent  organ- 
ization of  a  section  known  as  the  Public  Mining  Service  of  the  American 
Mining  Congress.  If  that  is  so,  I  presume  a  motion  to  that  effect  is 
necessary. 

MR.  LUNT:  I  believe  that  there  is  room  for  such  a  section  of  the 
Mining  Congress,  and  I,  therefore,  move  that  the  section  as  outlined  by 
the  Chairman  be  formulated  and  instituted. 

The  motion  was  thereupon  duly  seconded  and  carried. 

THE  CHAIRMAN:  I  presume  the  next  order  will  be  selection  for  a 
permanent  organization,  which  will  be  composed  of  a  chairman,  vice- 
chairman,  secretary,  and  two  members  of  the  executive  board.  I  under- 
stand that  this  is  the  typical  organization  of  the  American  Mining  Con- 
gress, and  we  might  take  care  of  that  from  the  floor,  but  it  occurs  to  me 
that  it  is  a  little  simpler  to  appoint  a  nominating  committee,  and  have 
that  committee  report  after  luncheon  this  afternoon.  If  that  coincides 
with  the  will  of  members  I  will  be  glad  to  entertain  a  motion  authorizing 
me  to  appoint  that  committee. 

Thereupon  it  was  duly  moved,  seconded,  and  carried  that  the  chair- 
man appoint  such  a  committee. 

THE  CHAIRMAN:  I  think  that  for  the  time  being,  unless  there  is 
some  other  business  to  be  disposed  of,  we  are  ready  to  go  ahead  with  the 
program  which  Mr.  Lincoln  was  largely  instrumental  in  arranging  for 


178  REPORT  OF  PROCEEDINGS 

us.  It  was  the  thought  of  the  organization  committee  that  part  of  the 
first  meeting  might  be  devoted  to  certain  subjects  in  the  curriculum  of 
mining  schools.  We  thought  that  as  a  means  of  having  this  discussion 
we  would  ask  representative  men  to  present  briefly  their  views  on  cer- 
tain phases  of  the  curriculum  such  as  English,  mathematics,  chemistry, 
and  metallurgy,  and  then  have  a  brief  discussion  following  each  paper. 
The  first  paper  on  the  program  is  a  discussion  of  'The  Correct  Use  of 
English'  by  H.  H.  Stock,  Professor  of  Mining  Engineering,  University  of 
Illinois.  Professor  Stock  was  unable  to  be  here,  but  sent  his  paper  to  be 
read,  and  I  have  asked  Mr.  Arthur  J.  Hoskin  to  read  it. 

[Thereupon  Professor  Stock's  paper  was  read  by  Mr.  Hoskin,  and  ap- 
pears on  page  449  of  the  Proceedings.] 

THE  CHAIRMAN:  It  always  seemed  to  me  that  the  proper  and  cor- 
rect use  of  English  is  as  indispensable  a  tool  to  the  engineer  as  the  slide- 
rule  or  transit  or  knowledge  of  assaying.  It  is  absolutely  essential  for 

Correct  English  an  Essential 

the  equipment  of  any  intelligent  man.  There  is  only  one  suggestion  I 
might  make  in  addition  to  what  Professor  Stock  has  so  well  said,  and 
that  is,  I  wish  that  every  engineering  student  might  have  occasion  some 
time  during  his  career  to  edit  copy  and  read  proof.  I  do  not  know  of 
any  training  in  the  use  of  English  that  is  comparable  to  editing  copy  and 
reading  proof. 

I  am  sure  many  of  you  will  have  some  suggestions  on  Professor  Stock's 
paper. 

MR.  H.  F.  LUNT:  While  not  actively  engaged  in  instructional  work 
at  all,  a  thought  that  comes  to  me  in  connection  with  Professor  Stock's 
excellent  paper  which  might  well  be  emphasized,  that  is,  as  has  been 
stated,  the  correct  use  of  English  is  part  of  the  equipment  of  every  intel- 
ligent man.  Many  young  men  take  the  engineering  course  and  do  not 
follow  engineering.  Possibly  their  technical  training  may  be  of  little 
use  to  them  in  the  business  that  they  eventually  follow,  but  if  they  are 
well  trained  in  English,  such  will  be  of  great  assistance  to  them  in  what- 
ever line  of  work  they  may  take  up.  There  is  no  profession  in  which 
it  is  not  of  advantage  to  a  man  to  be  able  to  express  himself  clearly  and 
concisely.  If  one  comes  in  contact  with  big  men,  I  think  that  they  are 
impressed  with  a  man  who  can  express  himself  well;  he  always  has  the 
advantage. 

MR.  JOHN  D.  CLARK  of  New  Mexico:  The  Engineering  Faculty  at 
the  State  University  of  New  Mexico,  with  which  I  am  connected,  has 
definitely  taken  up  this  matter,  and  intends  to  do  its  best  to  correct  con- 
ditions as  they  now  are,  and  we  are  taking  it  up  rather  forcibly.  We 
have  put  into  the  senior  engineering  curriculum  a  three-hour  course  and 
one  semester  course.  Students  have  to  take  it,  have  to  pass  it  and  get 
their  degrees;  and  they  recognize  that  there  is  yet  waiting  for  them  a 
course  in  English  in  their  senior  year.  For  example:  those  students  who 


THE  AMERICAN  MIXING  CONGRESS  179 

have  been  through  our  department  will  have  time  for  one  hour  in  that 
English  course,  possibly  two  hours,  and  I  will  cover  with  them  in  the 
presence  of  the  professor  of  English — that  is,  the  instructor  in  English- 
Regulations  at  University  of  New  Mexico 

such  portions  of  their  chemistry  in  which  they  have  shown  a  deficiency 
in  handling  the  language.  Specifically,  I  find  that  while  students  will 
say,  "Oh,  very  well,  we  understand  the  theory  of  English,"  they  have 
the  greatest  difficulty  in  saying  things  clearly,  and  before  they  graduate 
they  must  show  the  English  Department  that  they  are  proficient  in  this 
matter. 

DR.  FULTON:  It  might  be  of  interest  to  the  gentlemen  assembled 
here  to  know  that  about  two  years  ago,  at  the  Case  School  of  Applied 
Science  the  curriculum  of  Applied  English  was  taken  up  with  the  Cleve- 
land Engineering  Society,  a  large  and  strong  institution,  which  has  head- 
quarters in  a  great  industrial  city.  An  arrangement  was  made  for  a 
conference  between  the  Faculty  of  the  Case  School  and  a  Committee  of 
the  Engineering  Society.  They  formally  discussed  what  might  be  added 
or  subtracted  from  the  curriculum  of  the  Institution  so  as  to  make  it  of 
the  most  value  to  engineers  going  out  into  the  field — that  is,  to  students 
graduating  from  the  engineering  schools — and  the  meeting  finally  re- 
solved itself  into  a  discussion  on  the  subject  of  English.  The  engineers 
felt  that  technical  subjects  were  fully  taken  care  of,  but  there  was  one 
subject  in  which  the  Institution  seemed  to  be  weak,  and  that  was  Eng- 
lish. Actually,  the  Institution  was  not  weak  in  English,  as  it  had  two 
or  three  hours  more  English  in  its  curriculum  than  most  technical 
schools.  The  interesting  fact  is  that  many  of  the  engineers  were  grad- 
uates of  the  Case  School,  and  of  course  many  others  from  institutions 
from  surrounding  States,  and  they  thought  strongly  that  the  training  of 
engineering  students  was  vitally  deficient  in  English.  Just  how  that 
deficiency  is  to  be  remedied  is  quite  another  question.  As  had  been 
stated,  students  rebel  at  English,  believing  that  as  they  have  had  it  in 
high  schools,  and  as  they  have  a  knowledge  of  how  to  speak  their  native 
tongue,  they  view  it  as  an  obstacle  placed  in  the  way  of  accomplishing 
their  object;  but  the  Faculty  at  the  Institution  took  up  the  matter,  and 
is  endeavoring  to  remedy  it.  Yet,  the  feeling  outside,  among  engineers 
themselves,  is  very  strong  on  that  point. 

DR.  DAVID  WHITE,  Chief  Geologist  U.  S.  Geological  Survey:  I  am 
very  glad  that  the  Association  is  discussing  this  question.  The  importance 
of  good  English  in  technical  training  has  been  much  under-estimated  in 
many  of  our  schools. 

Experience  of  the  Geological  Survey 

The  engineer  who  goes  into  private  work,  or  consulting,  or  is  attached 
to  some  corporation,  is  not  called  upon  for  productions  of  high  order  in 
English  composition.  I  think  that  the  requirements  on  the  educa- 
tional provisions  are  much  more  stringent,  and  we,  in  the  Geological 


1SO  REPORT  OF  PROCEEDINGS 

Survey,  have  all  experienced  and  come  to  appreciate  it  as  of  high 
importance.  We  must  confess,  however,  that  on  our  staff  the  reports  of 
several  able  men  who  are  geologists,  are  likely  to  take  a  considerable  time 
over  someone  else  before  they  are  put  into  print.  This  uses  the  valuable 
time  of  another  geologist  or  engineer,  and  lastly  often  delays  the  publica- 
tion. 

We  have  gone  so  far  in  recent  years  in  Civil  Service  examinations  to 
call  for  an  essay,  and  on  that,  which  Covers  a  scientific  topic,  of  course, 
depends  in  part  the  rating  of  a  man's  English.  Practically  before  any 
appointment  is  made  to  to  Geological  Survey  staff  the  essay  is  carefully 
read— not  only  as  to  the  ability  as  a  geologist,  but  his  ability  to  write 
clearly,  and  in  good  English. 

MR.  D.  A.  LYON  of  Washington:  I  am  not  a  teacher  now,  but  as  a 
result  of  my  experience  since  having  been  in  the  business,  I  find  that 
one  of  the  greatest  drawbacks  that  we  have  to  contend  with  is  the  lack 
of  English,  and  that  engineers  are  not  able  to  express  themselves  clearly. 
This  being  the  case,  I  feel  that  English  should  be  taught  first,  last  and 
all  the  time.  I  think  that  every  course  which  is  taught  in  a  university 
should  embrace  a  training  in  English;  it  does  not  make  any  difference 
whether  mathematics,  physics,  or  what  not.  I  think  that  if  this  is  done 
a  lot  of  men  who  are  not  able  to  express  themselves  at  the  present  time 
would  be  helped,  and  that  as  Dr.  White  says,  the  Government  Bureaus 
have  capable  men  who  are  not  able  to  get  ahead  and  be  advanced,  be- 
cause of  this  lack  in  writing  or  expressing  themselves  as  they  should. 

MR.  C.  H.  CLAPP  of  Montana:  I  think  that  Mr.  Lyon  hit  the  nail  on 
the  head;  it  should  be  a  matter  for  the  whole  school  to  consider.  We 
want  to  put  the  fundamental  of  English  into  our  engineering  courses. 
We,  as  engineers,  should  take  a  vital  interest  in  it  as  taught  to  our 
students,  and  say  that  the  English  Department  is  going  to  co-operate 
with  us  rather  than  to  let  them  turn  our  students  over  to  an  English 
Department  to  attempt  to  instill  into  them  an  appreciation  of  the  cul- 
tural phases  of  English.  As  a  matter  of  fact,  many  of  our  students 
'buck'  against  that  type  of  instruction,  necessary  as  the  cultural  phase  of 
English  is  to  the  engineer,  who  will  get  that  as  he  more  appreciates  the 
elements  of  the  subject. 

THE  CHAIRMAN:  I  remember  years  ago  publishing  a  resume  of  the 
percentage  of  time  devoted  to  different  subjects  in  the  various  mining 
schools.  I  asked  one  of  our  men  a  little  while  ago  to  bring  that  down 
down  to  date  by  a  study  of  the  college  catalogs.  All  of  you  know  what  a 
mystery  the  average  college  catalog  is,  therefore  how  difficult  it  is  to 
extract  accurate  information  from  the  catalogs  of  other  colleges.  The 
work  is  brought  down  to  date  pretty  closely,  and  I  think  you  might  be 

Time  Devoted  to  English  in  Certain  Colleges 

interested  in  the  percentages  of  some  of  the  schools  giving  the  mining 
courses.      There  are  probably  some   errors   in  this  table,  but  not  many. 


Tilt:  AMERICAN  MINING  CONGRESS 


181 


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puB"qsti3ua;     :  10'  ri  •«»«'•<»<'  -f  ir  t-  «o  »o  c- 1    . 


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o:  o  <M_  o  to  eo  eo  09  oo 

10'  «c  i«  »o  «o  «c  co  co'  tc 


36  os  oo  0     co  co 


rH  CO  OS  3C  O:  'T  O  -C  r-  r-  CM 
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C  :    ~#    1C    «J    OS 


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182  REPORT  OF  PROCEEDINGS 

You  will  notice  the  variations,  and  also  for  a  number  of  institutions 
the  marked  standing  of  the  record  of  no  English  whatever  in  the  mining 
engineering  course. 

A  DELEGATE:     Have  you  an  average  on  that? 

THE  CHAIRMAN:     No,  but  I  think  it  is  small,  between  four  and  five. 

MR.  R.  D.  HALL  of  New  York:  The  matter  is  one  that  has  been 
brought  to  me  very  forcibly  a  number  of  times.  I  have  met  technical 
men  who,  unfortunately,  have  heard  rumors  that  engineers  could  not 
spell  nor  write,  and  there  is  a  general  disposition  to  remain  satisfied,  to 
feel  that  they  could  not  be  expected,  and  that  a  man  was  not  to  be 
judged  wanting  in  any  way  if  he  did  not  have  the  power  of  technical 
expression.  This  affects  us  seriously  in  the  matter  of  publishing  jour- 
nals, and  the  National  Conference  of  Business  Paper  Editors  has  recently 
taken  up  the  matter  of  improving  the  general  English  in  technical  trade 
papers.  It  is  interesting  to  know  that  there  are  journals — I  do  not  know 
how  many  of  them — where  the  technical  editors  are  not  supposed  to 
include  English  in  the  articles  submitted  to  them;  they  are  simply  to 
judge  them  from  a  technical  point  of  view;  and  it  is  necessary  to  employ 
a  man  whose  judgment  is  on  the  grammer  rather  than  on  the  technical 
side,  to  endeavor  in  the  short  time  allotted  him  to  improve  the  English 
and  make  it  more  direct  and  forcible.  It  is  necessary  that  the  engineer 
should  have  the  ability  and  power  to  express  technical  ideas  in  forcible 
and  simple  English. 

Valuable  Book  on  Good  Style 

The  members  of  the  Geological  Survey  who  have  spoken  here  have 
been  able  to  tell  the  facts  as  they  really  are,  and  it  remains  for  me  as  an 
outsider  to  say  that  the  best  book  on  English  I  have  seen  is  that  pre- 
pared for  instruction  of  the  staff  of  the  Geological  Survey.  It  was  writ- 
ten by  Mr.  H.  McL.  Wood.  I  think  that  if  they  who  are  teaching  tech- 
nical English  could  use  this  book  they  would  be  able  to  assist  students 
in  writing  excellent  technical  English.  I  believe  that  English  is  a  very 
important  matter,  and  it  is  most  unfortunate  that  a  number  of  technical 
men  think  it.  is  unnecessary  that  they  should  be  able  to  express  them- 
selves in  the  fullest  possible  language.  Only  those  who  can  express 
themselves  plainly  are  able  to  put  over  ideas  that  have  been  fruitful  in 
their  own  brains. 

DR.  WHITE  of  Washington:  I  would  like  to  add  a  word  to  the  re- 
marks of  Mr.  Hall.  The  suggestions  by  Mr.  Wood  for  authors  of  geolog- 
ical papers  and  technical  papers  were  not  written  for  general  consump- 
tion, but  were  conceived,  I  must  confess,  as  I  understood,  in  getting  the 
composition  of  reports  creditably  written  in  our  own  organization.  It 
was  found  that  geological  students  coming  from  universities  were,  in 
general,  so  poorly  trained  in  English,  and  in  the  course  of  their  profes- 
sional work  so  much  work  devolved  upon  the  editor,  that  Mr.  Wood  felt 
Jt  would  be  helpful  to  prepare  this  book  to  be  circulated  in  our  own 


THE  AMERICAN  MIXING  CONGRESS  183 

organization  in  the  hope  it  would  inspire  someone  to  do  better.  It  has 
had  good  results,  and  it  is  a  "tribute  to  Mr.  Wood's  own  mastery  of  Eng- 
lish as  well  as  a  devotion  to  good  writing  in  general  that  the  publication 
has  been  in  considerable  demand  outside.  I  am  not  sure. that  it  is  in 
stock  sufficient  to  withstand  a  general  demand  on  the  part  of  technical 
engineering  schools,  but  I  believe  there  are  some  on  hand,  and  as  far 
as  the  issue  is  available  it  is  at  the  service  of  editors  who  desire  copies. 
\Ve  are  now  preparing  a  small  book  of  simple  instructions,  explanations, 

Another  Book  Being  Prepared 

and  suggestions  for  the  guidance  of  geologists  primarily,  but  it  will  be 
useful  for  all  technical  men  in  engineering  work,  in  the  preparation  of 
their  illustrations,  in  forming  a  scale  of  any  design  for  reproduction  and 
so  on,  suitable  and  practicable  for  purposes  for  which  they  are  to  be 
used. 

MR.  HENRY  LANDES:  In  the  college  faculties  I  have  found  that  the 
teaching  of  English  is  the  most  thankless  subject  ever  given  to  the  human 
being.  Every  editor  of  English  eventually  gets  'nutty,'  and  in  our  State 
[Washington]  he  either  goes  to  the  insane  asylum  or  resigns.  So  dis- 
agreeable is  this  task  in  the  English  Department  that  every  new  man 
entering  is  hazed  for  the  first  year  in  that  he  is  required  to  give  from 
one-half  to  two-thirds  of  the  time  to  the  work  in  composition,  and  the 
English  Department  now  threatens  open  rebellion,  insisting  that  all  of 
this  work  should  go  back  to  the  high  school  where  they  say  it  properly 
belongs.  Not  only  is  that  true,  but  from  a  student's  standpoint  if  he 
is  ever  tempted  to  evade  a  task  it  is  to  avoid  themes  in  English.  We  at- 
tempted to  remedy  that  by  paying  good  prices  for  a  good  theme.  But 
there  are  serious  disadvantages;  nobody  likes  to  write,  and  just  as  quickly 
as  students  get  out  they  slump  back  again,  further  than  where  they 
were  at  the  beginning. 

I  think  that  the  Geological  Survey  has  done  a  wonderful  service  in  the 
preparation  of  the  book  which  Dr.  White  referes  to.  We  found  out 
that  there  was  such  a  work,  and  when  we  have  a  man  on  our  Survey, 
the  first  thing  he  has  to  do  is  to  get  a  copy.  Every  time  he  prepares  an 
article  he  must  use  it.  Before  this  rule  was  made  there  would  be  sen- 
tences without  subjects,  some  without  a  predicate,  some  a  mere  jumble  of 
words.  I  hope  that  the  U.  S.  Geological  Survey  will  get  out  a  revised 
edition  of  Mr.  Wood's  book— if  such  is  necessary — that  they  will  list  it 
permanently  as  one  of  their  publications.  This  would  make  it  valuable 
not  only  for  those  who  are  connected  with  mining  schools  and  geolog- 
ical surveys  and  who  are  writing  along  those  lines,  but  for  the  use  of 
everybody  who  has  to  write  English. 

Recently.  Mr.  T.  A.  Rickard  of  the  Mining  and  Scientific  Press,  published 
a  little  book  on  technical  writing,  and  I  am  so  imbued  with  its  importance 
that  I  require  every  senior  to  purchase  a  copy. 

THE  CHAIRMAN:  That  is  a  good  suggestion.  I  think  that  Mr. 
Rickard  stands  out  among  our  technical  journalists  as  the  man  who 


184  REPORT  OF  PROCEEDINGS 

has  rendered  to  the  mining  and  geological  professions  the  greatest 
service  which  has  been  rendered  in  this  generation  in  the  matter  of 
calling  attention  to  and  insisting  upon  a  correct  and  precise  use  of 
English. 

I  think  this  discussion  could  continue  indefinitely,  but  I  fear  we  must 
pass  on  to  other  parts  of  the  program. 

MR.  C.  E.  NEWTON  of  Oregon:  There  has  been  a  great  deal  stated 
this  morning  with  regard  to  English,  and  the  methods  of  teaching  it  in 
the  colleges.  There  is  an  old  saying,  "You  cannot  teach  an  old  dog  new 
tricks."  Now,  these  people  who  come  to  us  in  college  have  been  speak- 
ing so-called  English  for  a  number  of  years.  It  has  been  my  experience 
that  it  is  a  pretty  difficult  matter  to  do  much  for  some  of  these  people. 
The  place  where  this  must  begin  is  in  the  grades  and  in  the  high  school. 
It  is  my  information,  and  I  think  I  will  be  fairly  well  backed  up,  that  our 
high  schools  are  running  down  the  hill.  They  are  not  living  up  to  what 
they  did  15  or  20  years  ago,  and  it  seems  to  me  that  the  thing  for  the 
people  of  the  colleges  to  do  is  to  try  to  have  a  clearer  and  better  co-opera- 
tion with  the  high  schools. 

THE  CHAIRMAN:  I  wish  we  had  a  high  school  teacher  here  to  reply 
to  that. 

Shall  we  continue  this  discussion  in  English,  or  had  we  better  pass  on? 

MR,  L.  S.  GRANT  of  Colorado:  I  would  like  to  say  a  word  in  regard 
to  the  percentages  in  the  table  submitted:  In  the  Colorado  School  of 
Mines  at  Golden,  English  is  being  taught.  That  has  not  been  done  in  the 
past.  In  addition  to  this,  no  member  of  the  Faculty  is  required  to  accept 
a  'quiz'  or  examination  paper  unless  the  same  is  well  written.  It  can- 
not be  slovenly  written,  nor  accepted  if  it  is  not  readily  understood,  and 
the  style  approved  by  the  school  must  be  maintained.  This  applies 

Written  Papers  Studied  for  Style 

throughout  all  courses  in  the  school.  Consequently,  English  is  being 
studied  not  only  in  the  English  Department,  but  every  one  in  the  Faculty 
who  receives  any  written  work  is  required  to  see  that  the  work  is  kept 
up  to  style.  All  monthly  quiz  papers  pass  through  the  hands  of  Dr. 
Alderson.  He  has  not  time  to  read  them  all,  but  he  has  time  to  look 
over  their  style  and  writing.  This  is  merely  a  device  to  check  the  Eng- 
lish throughout  the  school,  which  we  all  agreed  has  been  sadly  neglected. 
This  probably  is  being  done  in  other  schools,  so  that  the  percentage  of 
actual  hours  reported  as  given  to  any  one  subject  might  not  be  a  fair 
representation  of  the  amount  of  English  given  in  that  school. 

Professor  Thomson  also  mentioned  another  thing,  which  devolves 
largely  upon  members  of  the  Faculties  of  various  institutions;  that  is  the 
enigma  of  the  college  catalog.  It  seems  that  there  is  room  for  simplify- 
ing such  publications. 

THE  CHAIRMAN:  If  there  are  no  more  remarks  on  this  vital  sub- 
ject we  will  proceed  to  the  discussion  of  mathematics.  No  meeting  on  a 


THE  AMERICAN  MIXING  CONGRESS  185 

section  devoted  to  mining  education  would  be  complete  without  repre- 
sentation from  the  better  engineering  schools.  It  is  unfortunate  that 
Professor  Robert  Peele,  Professor  of  Mining,  School  of  Mines,  Columbia 
University,  will  not  be  able  to  be  present,  but  he  has  sent  a  paper  entitled, 
'The  Place  of  Mathematics  in  the  Training  of  the  Mining  Engineer,' 
which  will  be  read  by  Mr.  Illinski  of  New  Mexico. 

[Mr.  Illinski  then  read  the  paper  of  Professor  Peele,  which  will  be 
found  _on  page  453  of  the  Proceedings.] 

THE  CHAIRMAN:  This  paper  is  before  you  for  discussion,  gentlemen, 
Mathematics  for  Engineers 

MR.  LYON:  While  I  think  we  all  appreciate  what  the  paper  says,  it 
did  not  tell  how  to  teach  mathematics.  It  strikes  me  that  the  point 
is  not  how  to  teach  mathematics,  but  how  to  get  the  student,  to  care 
for  mathematics.  I  hope  somebody  here  will  explain  Professor  Landes' 
method  of  teaching  mathematics. 

MR.  LANDES:  I  would  like  to  leave  it  to  Dean  Newton,  he  was  on  our 
Faculty  there. 

MR.  NEWTON:  I  was  connected  with  the  University  of  Washington 
in  the  Department  of  Engineering,  and  it  became  a  sore  point  as  to  how 
we  were  to  get  these  young  pupils  along.  One  of  our  greatest  troubles 
was,  as  we  found  it,  in  the  use  of  trigonometry.  So,  to  make  a  long  story 
short — and  it  was  a  long  story  for  several  years — we  tried  for  various 
reasons  to  have  the  Department  of  Mathematics  come  down  to  the 
School  of  Engineering,  or  vice  versa,  to  find  out  what  the  latter  school 
wanted.  So  we  had  little  or  no  co-operation,  or  little  or  no  success. 
When  Mr.  Moore  stated  that  there  were  about  five  sections  beginning  in 
the  freshman  class,  he  asked,  "Will  you  allow  me  to  experiment  on  one 
section  of  this  freshman  class  as  regard  to  the  application  of  mathe- 
matics?" The  Faculty  granted  the  request.  The  section  was  chosen  at 
random.  Mr.  Moore  did  not  see  the  section  assigned  to  him,  but  simply 
took  that  which  was  drawn.  At  the  end  of  the  year,  or  nine  months, 
these  freshmen  so-called,  were  given  precisely  the  same  examination 
in  mechanics  as  was  handed  to  the  juniors,  and  the  former,  yet  without 
college  trigonometry,  geometry,  and  calculus,  easily  beat  the  juniors  in 
time  and  in  accuracy. 

THE  CHAIRMAN:  I  will  have  to  interrupt  a  second  and  ask  to  be 
excused,  and  will  ask  Professor  Morrill  to  take  the  chair. 

MR.  NEWTOV,  continuing:  The  work  was  carried  on  in  this  way: 
All  mathematics  were  put  on  a  laboratory  basis,  three  afternoons  a  week, 
with  no  study  at  home.  The  problems  were  put  on  the  blackboard,  and 
the  students  were  placed  at  each  end  of  the  table,  and  were  graded 
upon  their  method  of  approaching  the  problem,  upon  their  accuracy, 
and  upon  their  intelligence  and  consistency  of  the  paper.  This  clearly 
demonstrates  to  me  in  a  way  that  a  large  part  of  the  mathematics  already 
in  college  is  all  right  for  mathematicians,  but  if  you  will  excuse  the 


ISO  REPORT  OF  PROCEEDINGS 

slang,  "Damn  poor  work  for  engineers."  (Applause.)  I  wish  that  Mr. 
Moore  were  here.  His  successful  methods  were  used  in  the  Army,  and  it 
was  he  who  was  instrumental  in  placing  the  methods  at  Camp  Humph- 
reys. 

THE  CHAIRMAN:  I  notice  that  this  matter  of  teaching  in  colleges 
has  been  a  problem  at  the  University  of  Texas. 

We  have  classes  of  two  kinds,  one  in  which  the  engineer  takes  up 
specific  work,  and  the  average  course  in  which  you  find  a  great  deal 
that  is  absolutely  foreign  to  the  work  any  student  is  trying  to  do.  If  an 
engineer  is  to  use  calculus  after  he  leaves  college,  why  not  give  him 
calculus  in  college?  I  believe  that  entirely  too  much  mathematics  is 
given  to  mining  engineers  in  the  college  courses.  I  do  not  mean  to  say 
we  should  not  teach  calculus  to  the  mining  engineer,  but  as  already  stated 
by  Mr.  Newton,  the  chances  are  not  one  man  in  ten  who  takes  a  mining 
engineering  course  will  use  calculus  once  in  ten  years.  That  does  not 
minimize  the  value  of  calculus,  and  I  do  not  believe  in  mathematical  sub- 
jects in  our  institutions  unless  taught  by  engineers  as  a  working  tool, 
and  not  as  a  subject  to  worry  a  man  in  his  college  career. 

MR.  ILLINSKI  of  New  Mexico:  I  am  not  a  mathematician,  yet  the 
question  strikes  me  as  not  so  much  one  of  method  in  teaching  mathe- 
matics, but  how  much  you  teach  mathematics.  I  feel  that  we  teach  too 
much  mathematics,  or  have  it  taught  from  the  wrong  viewpoint  just  as 
we  do  English;  and  we  can  teach  too  much  English  and  teach  it  from  the 
wrong  viewpoint.  I  feel,  however,  that  mathematics  is  absolutely  essen- 
tial in  the  engineering  courses,  and  I  shall  discuss  this  matter  before  the 
meeting.  Then  the  question  arises  as  to  what  you  consider  an  education. 

Many  Subjects  Desirable,  but  Time  is  Limited 

We  have  a  general  tendency  in  all  the  schools — high  schools,  universi- 
ties, and  mining  schools — to  place  in  our  curricula  many  subjects  that 
ten  or  fifteen  years  ago  were  not  considered  at  all.  I  remember  the 
question  of  economics  was  thoroughly  discussed  last  year.  There  is  no 
question  in  an  engineer's  mind  that  economics  would  be  a  grand  sub- 
ject to  put  in  and  teach  to  engineers.  The  same  is  true  of  a  good  many 
other  subjects — English  for  instance — and  the  same  is  true  of  trigo- 
nometry. The  question  is,  where  is  the  student  to  secure  the  number  of 
hours  per  day  or  week  in  order  to  take  care  of  all  of  these  subjects. 
You  must  have,  for  instance,  three  afternoons  a  week  for  trigonometry. 
There  is  no  doubt  that  the  laboratory  is  best.  But  when  we  get  up 
and  lecture  to  the  classes,  some  get  it  and  some  do  not.  I  think  that  the 
'quiz'  method  brings  out  the  best  in  the  student.  Columbia  University 
solved  its  problem  by  making  it  a  five-year  course.  Then  the  question 
arises,  will  men  go  to  school  for  five  years  to  get  an  engineering  educa- 
tion? That  is  a  question  I  feel  I  would  like  to  have  really  answered. 
That  question  comes  up  with  us  particularly,  and  includes  factors,  chiefly 
the  type  of  high  school  graduates  you  get.  That  is  a  point  I  would  like 
to  have  discussed  to  a  certain  extent.  Just  how  are  you  going  to  put 


THE  AMERICAN  MINING  CONGRESS  1ST 

them  in,  and  where  is  the  student  going  to  find  time  to  study?  I  feel 
that  mathematics  is  essential  not  only  from  the  fact  you  use  it  as  a  tool, 
but  also  for  its  mental  training.  That  brings  you  back  to  the  question 
of  what  you  consider  an  education.  What  is  an  education?  I  have 
this  feeling,  if  you  give  an  engineer  a  good  fundamental  training  in  a 
four-year  course,  requiring  him  to  live  up  to  the  standard,  and  not  have 
too  many  subjects,  that  you  really  educate  him,  and  from  that  point  he 
can  spread  out  wherever  he  wants  to. 

MR.  NEWTON:  In  regard  to  teaching  mathematics  at  the  University 
01  Washington,  remember  that  the  proposition  is  this:  that  at  the  end  of 
the  third  year,  or  the  junior  year,  the  junior  was  better  qualified  to  solve 
problems  in  mechanics  than  the  freshman  was.  Therefore,  he  saved  two 
years. 

Mathematics  Essential  only  for  the  Particular  Problems  Taught 

Just  one  word  about  the  method  that  I  omitted,  the  method  of  teach- 
ing these  mathematics.  We  did  not  teach  trigonometry.  When  a  man 
wished  to  solve  a  problem  that  required  trigonometry  then  we  taught 
him  this,  the  trigonometry  that  was  necessary  to  solve  that  problem.  He 
was  given  such  mathematics  as  were  required  to  solve  the  problems. 
We  did  not  teach  analytical  geometry.  It  was  not  given  in  a  three-hour 
course;  I  think  it  extended  over  a  period  of  three  weeks  each  morning 
for  a  total  of  three  hours. 

A  DELEGATE:  I  would  like  to  ask  Mr.  Newton,  was  mathematics 
continued  in  the  sophomore  year? 

MR.  NEWTON:  No,  Professor,  I  am  sorry  to  say  it  was  not,  but  for 
what  reason  I  do  not  know. 

MR.  J.  H.  CLAPP:  I  think  the  whole  course  has  been  thoroughly 
threshed.  Apparently  the  difficulties  of  getting  this  into  the  curriculum, 
is  due  I  think,  largely  to  the  attitude  of  the  mathematicians  themselves, 
their  self-satisfaction  and  prejudice  as  evidenced  by  their  own  reports. 
As  you  know,  they  made  a  report  that  mathematics  should  be  taught  by 
a  professor  of  mathematics  as  an  independent  science,  not  as  a  tool  of 
the  engineers,  and  not  as  a  tool  by  engineers.  That  is  their  expression 
as  to  why  mathematics  should  be  taught  in  engineering  schools.  Another 
great  difficulty  is  that  of  the  unwillingness  of  engineers  to  assume  the 
burdens  of  elementary  teaching. 

Mr.  Newton  stated  that  the  trouble  with  English  is  the  unwillingness 
of  the  person  to  spend  the  time  and  the  trouble  necessary  to  teach  com- 
position. I  did  it  myself  for  a  couple  of  years.  Nevertheless,  we  realize 
that  v,his  is  a  serious  problem.  The  freshman  and  sophomore  go  to  the 
engineering  school,  and  are  discouraged  from  the  fact  they  are  taking 
subjects  not  related  to  engineering.  As  a  result,  they  become  dilatory 
and  wander  outside  of  their  work.  They  lack  the  vim  and  enthusiasm 
necessary  for  a  student  to  succeed,  and  I  think  that  the  only  solution  is 
for  those  of  us  who  have  some  direction  of  the  administration  of  the 


188  REPORT  OF  PROCEEDINGS 

curriculum  is  to  see  that  mathematics  is  taught  by  engineers  and  not  by 
teachers  of  philosophy  in  pure  mathematics. 

DR.  FULTON:  The  question  of  mathematics  is  an  extremely  old 
one.  I  have  attended  many  meetings  and  heard  these  same  questions 
discussed,  and  I  think  that  we  will  continue  perenially  to  discuss  the 
topic. 

Some  Students  Lack  Ability  in  Mathematics 

It  is  undoubtedly  true  that  we  look  upon  the  freshman  as  he  enters 
school  as  an  average  man.  There  is  no  doubt  that  the  ability  to  take  up 
mathematics  is  more  or  less  of  a  gift,  just  as  natural  as  it  is  to  take  up  a 
language,  and  there  are  men  in  the  engineering  schools  who  have  no 
ability  along  mathematical  lines.  I  will  go  as  far  as  to  say  that  the 
matter  of  teaching  those  men  makes  practically  no  difference  whether 
they  are  taught  by  a  doctor  of  philosophy  in  mathematics,  or  if  they 
should  be  taught  by  an  engineer  in  mathematics,  the  ultimate  results 
would  be  practically  the  same.  I  think  that  if  we  would  recognize  this 
fact  a  little  more  clearly  than  we  do,  we  would  not  criticize  teachers  of 
mathematics  so  improperly.  That,  I  think,  lies  at  the  bottom  of  it. 

Secondly,  I  think,  that  it  is  a  question  of  orientation.  I  heard  Profes- 
sor Mann's  report  mentioned  a  little  while  ago.  It  is  an  excellent  report, 
but  there  are  many  of  us  who  do  not  agree  with  it  fundamentally  as  a 
matter  of  education.  We  can  go  back  to  the  methods  pursued  at  the 
University  at  Cincinnati,  Ohio,  not  applicable  to  all  types  of  engineering 
courses,  but  to  mechanical  engineers  and  electrical  engineers — that  is. 
making  the  man  familiar  with  what  he  really  is  to  study.  Such  is 
fundamentally  the  object  of  that  system  of  training,  which  in  the  last 
analysis  is  merely  a  question  of  orientation.  If  you  take  a  high-school 
student  and  put  him  into  a  class  in  mathematics  at  college,  he  is  con- 
fronted with  problems  that  he  had  done  in  high  school  before  in  a  sort 
of  a  mechanical  way,  but  when  he  gets  into  college  mathematics  he  is 
absolutely  unorientated.  He  does  not  know  what  either  trigonometry 
or  calculus  are  for.  The  fundamental  function,  I  think,  of  the  teacher 
of  mathematics  at  the  very  start  is  to  orientate  his  students,  and  prove 
to  them  that  there  is  some  value  to  his  stand  in  mathematics.  If  he 
does  that  he  will  have  an  excellent  start,  and  he  will  be  surprised  to  see 
what  a  number  respond.  Out  of  those  who  are  capable  of  responding, 
I  think  there  will  be  perhaps  40%  that  will  be  very  efficient,  while  the 
remainder  will  go  through  the  course  just  as  they  do  now,  without  any 
efficiency  or  practical  results. 

Orientation  in  Study 

That  question  of  orientation,  I  think,  is  the  real  serious  one,  and 
all  of  this  matter  of  teaching  the  person  the  so-called  practical  problems 
is  directly  in  that  line.  It  is  not  so  much  its  practical  value  as  it  is  the 
orientative  value  of  the  practical  problems.  Personally,  I  do  not  believe 
in  going  too  far  on  the  practical  side,  because  it  confines  a  man's  men- 


THE  AMERICAN  MINING  CONGRESS  180 

tality  too  closely;  but  there  is  a  certain  value  to  it,  and  I  think  that  in 
the  method  itself  there  is  great  value. 

Dr.  Moore's  method  is  undoubtedly  excellent,  but  it  devotes  a  much 
greater  amount  of  time  to  it.  You  work  with  a  student  in  the  laboratory 
for  three  hours,  and  that,  of  course,  is  bound  to  get  good  results. 

A  DELEGATE:  I  do  not  believe  that  Dr.  Fulton  has  the  right  idea  of 
this  thing.  As  I  understand  you  teach  mathematics  in  connection  with 
some  other  courses  you  do  not  consume  any  more  time. 

DR.  FULTON:  I  tried  to  make  that  clear.  The  point  is  this:  we  do 
not  teach  trigonometry  as  trigonometry,  and  we  do  not  teach  analytical 
trigonometry,  but  this  one  class  we  had  was  in  such  shape  at  the  end  of 
nine  months  that  it  did  better  work  in  all  respects  than  the  classes  which 
had  been  to  the  mathematical  department  for  two  years  ,and  at  the  same 
time  had  been  nine  months  to  the  engineering  department. 

MR.  LUNT:  There  is  one  point  that  I  think  Professor  Fulton  had  in 
mind,  only  it  occurred  to  me  in  a  little  different  form,  that  is:  at  the 
time  of  the  education  as  to  the  inability  of  the  student  in  after  life, 
when  he  gets  up  against  actual  problems,  to  find  out  or  obtain  informa- 
tion that  he  wants,  to  teach  him  where  to  obtain  it.  It  is  impossible  in 
any  of  the  college  courses  to  teach  a  man  everything  he  is  going  to 
know.  What  he  is  taught  is  the  methods  of  obtaining  any  information 
he  might  need,  and  it  seems  to  me  that  this  Moore  method,  which  has  been 
outlined,  brings  that  out  essentially.  As  I  understand  it,  you  put  a 
certain  definite,  concrete  problem  up  to  the  student,  and  from  the  train- 
ing he  has  received  he  knows  how  to  solve  it,  although  he  may  never 
know  he  is  using  trigonometry,  analytical  geometry,  or  anything  else, 
but  knows  how  to  work  out  the  basic  principle  he  needs  to  solve  the 
problem.  Isn't  that  the  case? 

DR.   FULTON:       Yes. 

MR.  LUNT:  It  seems  to  me  that  is  the  particular  value  of  this  prob- 
lem. A  man  can  read  in  geology,  or  anything  else,  and  can  read  all  the 
works  on  geology,  and  he  is  familiarized  along  several  lines  of  what 
has  been  written.  He  knows  that  the  Geological  Survey  has  published 
a  number  of  reports  and  by  studying  them  he  can  get  information  on^any 
specific  fact  or  circumstance.  Isn't  this  method  on  mathematics  along 
those  lines?  It  teaches  him  how  to  solve  problems  without  burdening 
his  mind  with  a  lot  of  abstract  work,  which  is,  as  several  speakers  have 
remarked,  of  no  particular  use  to  him. 

DR.  FULTON:  I  think  I  can  explain  it  to  you,  and  I  won't  talk  again. 
The  proposition  is  this:  It  was  taught  in  a  room  of  about  24  students. 
There  were  three  instructors  in  the  room — Mr.  Moore  and  two  assist- 
How  Students  are  Instructed 

ants — who  were  there  to  be  called  upon  when  the  students  needed  help. 
When  the  student  required  help,  they  did  not  help  him  by  doing  it  for 


190  REPORT  OF  PROCEEDINGS 

him,  but  they  would  ask  him,  "What  is  the  trouble?  why  can't  you  get 
any  further?  why  did  you  do  this  here?  and  why  did  you  do  that  over 
there?"  and  "If  you  did  that  back  there,  and  if  you  thought  that  was 
right,  why  can't  you  go  on?  If  you  understand  what  you  did  there,  think 
a  little  bit  further  and  see  what  will  happen."  The  sum  and  substance 
of  the  whole  thing  is  this:  he  has  the  handbook  before  him  that  he  is 
going  to  use  when  he  gets  through  college:  he  has  the  slide-rule  before 
him;  he  has  a  chain  and  square  and  triangles  to  work  with,  and  pen- 
cils. He  has  everything  to  work  with,  and  what  are  you  going  to  do? 
You  are  going  to  prepare  him  to  work  in  an  office  or  any  other  place  to 
solve  the  engineering  problems  with  which  he  will  be  confronted. 

MR.  EAMES:  All  of  the  subjects  are  valuable  if  not  essential  in  the 
work  of  the  engineer;  the  difficulty  is  to  find  a  stimulant. 

I  remember  one  time  giving  a  kind  of  an  educational  course  in  chem- 
istry and  in  geology.  Now,  simply  to  point  out  the  importance  in  the 
matter  of  mathematics,  unless  a  man  has  a  natural  orientation  in  that 
way  it  is  useless  to  spend  much  time  in  getting  him  to  work  along 
wants  to  proceed  along  that  line  he  is  not  afraid  to  take  up  the  project, 
himself. 

When  I  was  a  boy,  we  did  not  get  the  education  you  receive  today 
m  America,  and  most  of  the  subjects  that  I  am  now  familiar  with,  I 
obtained  because  I  knew  how  to  make  a  start.  Therefore,  I  think  it  is 
important  to  make  the  man  see  that  he  wants  to  take  mathematics;  but 
do  not  follow  it  up  as  if  you  were  going  to  make  a  specialist  out  of 
nim  as  a  mathematician,  yet  give  him  the  fundamentals,  so  that  if  he 
wants  to  proceed  along  tha  line  he  is  not  afraid  to  take  up  the  project. 

The  same  thing  is  true  in  chemistry,  the  mining  engineer  is  supposed 
to  be  a  chemist,  but  he  should  be  able  to  work  out  and  follow  any  dis- 
cussion or  explanation  on  that  subject. 

Some  Professions  Overcrowded 

1  think  that  the  great  danger  is  that  you  have  too  many  specialists 
to  follow  some  particular  line.  That  is  not  for  the  engineer.  He  may 
not  be  a  mathematician,  and  may  not  require  geology,  but  he  is  a  great 
deal  like  the  family  physician,  he  should  not  only  know  the  subjects  per- 
taining to  his  profession,  but  if  he  feels  there  is  any  necessity  or  feels 
disposed,  he  should  be  able  to  solve  any  problem  that  may  be  presented 
to  him.  • 

THE  CHAIRMAN:  Unfortunately  I  was  away  during  part  of  this 
discussion.  There  is  one  part  in  Professor  Peele's  paper  to  which  I  wish 
to  refer.  It  seems  to  me  he  has  taken  the  traditional  attitude  in  regard 
to  mathematics  when  he  says,  "It  is  unnecessary  to  go  further  in  trac- 
ing the  intimate,  dependence  of  engineering  studies  upon  mathematics. 
Doubtless  some  practising  mining  engineers  will  feel,  even  if  they  do  not 
say,  that  they  have  attained  success  in  their  professional  careers  with- 
out possessing  a  working  knowledge  of  any  more  mathematics  than  is 
included  in,  say,  arithmetic,  algebra,  and  plane  trigonometry.  Others, 


THE  AMERICAN  MIXING  CONGRESS  191 

who  have  been  engaged  more  in  the  business  management  of  mines  than 
on  the  technical  side,  may  question  the  necessity  of  knowing  any  mathe- 
matics beyond  arithmetic  and  elementary  algebra.  But,  even  they  will 
acknowledge  that  engineering  problems  must  be  tackled  and  solved  by 
some  one,  and  the  superintendent  or  manager  who  has  insufficient  engi- 
neering training,  or  whose  mathematics  have  grown  rusty,  is  obliged 
to  engage  the  services  of  a  technically-trained  man  to  help  him  out;  or, 
if  the  organization  is  a  large  one,  the  superintendent  may  have  to  rely 
implicitly  on  his  engineering  staff  for  everything  connected  with  the 
technical  operation  of  the  property.  Furthermore,  men  who  adopt  such 
a  viewpoint  are  likely  to  have  lost  sight  of  the  beneficial  training  they 
received  from  mathematical  studies.  The  quickness  of  perception  and 
mental  acuteness  developed  by  these  studies  may  remain  long  after  the 
details  of  rule  and  formula  have  been  forgotten.  It  has  been  well  said 

Requisites  of  Engineers 

that  the  engineer  should  be  accurate  in  his  calculations,  thorough  in  his 
investigations,  lucid  and  concise  in  his  statements,  and  logical  in  his 
deductions.  All  of  these  qualities  are  fostered  and  developed  by  the 
study  of  mathematics.  That  view  is  not  generally  accepted  among  per- 
sons who  have  made  a  basis  of  studying  the  processes  of  education.  Our 
specialists  in  psychology  have  rejected  in  toto  that  theory.  Their  dictum 
is  that  one  study  is  of  quite  as  much  mental  training  value  now  as  any 
other,  provided  it  is  equally  well  taught  and  equally  well  studied;  and 
that  no  subject  has  value  in  the  study  of  any  other  excepting  there  be 
elements  in  common  between  the  two  subjects  themselves;  so,  unless 
mathematics  can  stand  on  that  plane  it  cannot  stand,  and  unless  it  be 
on  a  much  firmer  basis  than  that  of  mental  training  it  is  going  shortly 
into  the  scrap  basket.  I  think  that  the  present  traditional  college  courses 
in  mathematics  are  somewhere  between  25  to  75%  unadulterated  'bunk.' 
I  think  we  need  mathematics  from  the  same  view  that  English  is  taught, 
namely,  that  it  is  the  invaluable  weapon  of  the  engineer  in  his  work, 
and  that  the  rest  of  it  which  is  retained  there,  because  of  its  fancy  tra- 
ditional mental  discipline,  must  be  discarded.  (Applause.) 

DR.  FULTON:  I  arise  to  defend  Professor  Peele;  I  am  an  old  student 
of  his.  He  holds  the  traditional  views  on  mathematics,  and  I  will  advise 
that  I  also  hold  these  views. 

Engineering  education,  I  think,  must  be  looked  upon  somewhat  defi- 
nitely from  education  in  general.  I  fully  agree  with  the  Chairman  when 
he  disclaims  the  advantage  of  mathematics  in  general  for,  say  a  woman's 
college,  or  a  young  ladies'  seminary,  but  I  will  stand  by  it  when  it  comes 
from  the  education  of  the  engineer.  Mathematics,  of  course,  is  a  tool 
of  the  engineer.  There  is  no  question  about  that.  The  mining  engineer, 
with  whom  we  are  particularly  concerned,  uses  that  tool  not  as  much 
as  other  engineers  do,  but  surely  a  mechanical  or  an  electrical  engineer 
uses  it  frequently.  I  know  that  from  having  seen  them  at  work,  and 
I  know  that  my  work  has  taken  me  into  electrical  engineering  to  a  con- 


192  REPORT  OF  PROCEEDINGS 

siderable  extent,  and  that  I  have  had  use  for  mathematics — and  reaS 
mathematics. 

Basic  Subjects  in  Engineering 

The  fundamental  subjects  of  any  engineering  course,  as  they  were 
turned  out  some  time  ago,  are,  I  think,  mathematics,  then  physics,  and 
then  chemistry.  When  a  student  has  those  three,  with  a  theory  or 
knowledge  of  the  language,  and  knowing  nothing  more  than  when  he 
goes  out  of  college  than  that  he  can  become  an  engineer,  and  that  the 
rest  of  it  he  can  pick  up  without  the  slightest  difficulty.  Certainly 
physics  and  chemistry,  especially  the  modern  phases,  are  based  on 
mathematics;  and  any  student  who  has  not  that  fundamental  knowledge 
of  mathematics  is  going  to  be  hopelessly  lost  when  it  comes  to  the  appli- 
cation of  engineering  subjects,  whether  that  be  power  engineering  with 
machines,  or  mining  engineering,  or  metallurgical  engineering.  You 
cannot  get  half  way  through  a  problem  and  sit  down  and  consider  it 
solved.  If  you  are  to  get  results,  you  must  stick  by  it.  Such  is  mental 
training  and  discipline  that  I  think  no  other  subject  is  capable  of  giving. 
There  is  not  an  engineer  worth-while  without  that  training.  The  suc- 
cessful type  of  engineer  that  is  going  to  do  something  in  future  years 
must  have  a  rigid  training,  and  be  able  to  see  whether  he  is  right  or 
wrong.  He  has  to  follow  his  analysis  through  to  the  bitter  end,  and 
there  isn't  anything  like  mathematics  which  gives  that  training.  Physics 
or  chemistry  without  mathematics  is  not  physics  or  chemistry. 

A  DELEGATE:  I  do  not  feel  I  can  leave  this  meeting  without  saying 
that  I  feel  that  mathematics  is  absolutely  essential  from  a  point  of  view 
of  mental  training.  It  is  immaterial  in  the  outcome  of  the  engineer, 
provided,  of  course,  he  becomes  successful,  and  I  just  want  to  present 
this  idea.  We  know  it  is  a  fact,  and  it  has  been  proved  to  be  so,  that 
you  can  take  a  child  and  by  giving  it  a  series  of  exercises  you  can  develop, 
if  you  know  how,  every  individual  muscle  of  its  body,  and  as  it  grows 
up,  each  muscle,  depending  upon  certain  specific  exercises,  will  be 

Development  of  the  Brain 

developed  to  its  maximum.  I  hold  the  same  idea  in  connection  with  the 
brain  of  the  child.  I  believe  that  you  can,  by  giving  it  certain  lines  of 
training,  develop  what  the  medical  profession  will  tell  you  is  the  "gray 
matter  of  the  cerebrum,"  and  so  train  that  child's  growing  cells,  or  groups 
of  brain  cells,  so  that  ultimately  it  will  be  a  finished  product,  and  coming 
over  to  an  educational  institution  that  child  is  capable  of  being  a  success 
in  any  line  in  which  he  cares  to  follow.  My  idea  is  that  you  can  train 
them  for  certain  lines  satisfactorily. 

To  illustrate  it  I  might  say,  for  instance,  it  is  mentioned  in  Professor 
Peele's  paper,  'Descriptive  Geometry.'  Personally  I  think  it  is  an  essen- 
tial study.  I  have  seen  isolated  cases.  I  went  to  school  with  one  man  in 
particular  who  passed  descriptive  geometry,  and  made  100%,  and  actu- 
ally in  his  work  he  could  not  pass  in  any  other  form  of  mathematics, 
^iet  you  will  find  another  class  of  students  that  can  pass  all  the  other 


THE  AMERICAN  MIXING  CONGRESS  193 

subjects  and  are  utter  failures  in  descriptive  geometry.  I  deduct  from 
that  point  of  view  that  there  are  some  gray  cells  in  that  individual's 
brain  which  have  not  been  developed  to  acquire  that  form^of  education. 
We  must  train  each  student  so  that  when  he  goes  out  he  will  be  a  suc- 
cess in  any  profession. 

THE  CHAIRMAN:  First  of  all  I  want  to  say  that  I  concur  in  every- 
thing which  Dr.  Fulton  has  said.  The  point  I  am  making  though  is  this, 
that  it  is  upon  that  basis  which  mathematics  must  stand,  and  not  upon 
the  basis  of  a  mental  discipline. 

It  is  said  that  the  man  who  is  his  own  lawyer  has  a  fool  for  a  client; 

1  think  that  is  true.      If  a  person  wants  engineering  advice  he  should  go 
to  an  engineer  for  it;   if  he  wants  a  mine  examined  he  should  go  to  an 
engineer  for   it;    and   if  he  wants   a  geological   report   he   should    go  to 
Dr.  Ransome.     (Laughter  and  applause.) 

THE  CHAIRMAN:  May  I  take  the  liberty  of  announcing  the  nomi- 
nating committee?  I  would  like  to  name  C.  E.  Newton  of  Oregon,  S.  H. 
Worrell  of  Texas,  and  Henry  M.  Landes  of  Washington. 

(The  meeting  adjourned  at  12.30  P.  M.,  for  luncheon,  to  meet  again  at 

2  P.  M.) 


Afternoon  Session— 2  P.  M.,  Thursday,  November  18,  1920 

THE  CHAIRMAN:  The  first  business  of  the  afternoon  session  is  a 
report  of  the  nominating  committee,  of  which  Mr.  Newton  is  chairman. 

MR.  NEWTON:  The  nominating-  committee  is  going  to  announce  the 
following: 

Dr.  Fulton,  of  Missouri,  chairman;  Mr.  Illinski,  of  New  Mexico,  vice- 
chairman;  Mr.  Thomson,  of  Idaho,  secretary;  D.  A.  Lyon,  Washington, 
D.  C.,  and  Mr.  Clapp,  of  Montana,  executive  committee. 

I  may  say  a  word  as  to  why  these  men  were  chosen:  They  Were  chosen 
primarily  on  two  counts,  one  in  the  interest  of  the  movement,  and  second, 
location.  You  will  notice  that  we  have  a  wide  distribution  of  places 
where  these  gentlemen  come  from,  and  also  most  of  them  are  intensely 
interested  in  the  work. 

THE  CHAIRMAN:  Gentlemen,  you  have  heard  the  report  of  the 
nominating  committee,  what  are  you  going  to  do  with  it? 

Thereupon  it  was  duly  moved  and  seconded  that  the  report  of  the  com- 
mittee be  accepted. 

THE  CHAIRMAN:  It  has  been  moved  and  seconded  that  the  report 
be  accepted,  and  that  the  secretary  cast  the  unanimous  ballot  of  this 
body  for  the  committee. 


194  REPORT  OF  PROCEEDINGS 

Thereupon,  being  put  to  a  vote  by  the  chairman  the  motion  was 
unanimously  carried. 

Thereupon'  Dr.  Fulton,  the  newly-elected  chairman,  took  the  chair  to 
act  as  chairman  of  this  meeting. 

THE  CHAIRMAN:  Gentlemen,  you  have  heard  the  report  of  the  nomi- 
nating committee  and  the  reason  why  the  choices  were  made,  first  because 
of  the  person,  and  second  because  he  is  located  at  some  place.  I  dis- 
claim the  first  one,  I  will  serve  willingly  though  because  I  come  from 
Missouri.  (Laughter.) 

They  say  being  further  east  I  have  some  Eastern  friends,  and  that 
I  might  have  some  influence  on  my  Eastern  colleagues  to  induce  them  to 
become  a  little  interested  in  this  matter,  and  I  assure  you  I  will  do  my 
best  on  that  at  the  next  Congress,  and  we  may  see  people  from  east  of 
the  Missouri  River  if  I  have  any  influence  and  work  hard  enough  to  get 
them  out  here. 

Moving  Pictures  to  Show  Mining  to  the  Public 

The  next  paper  or  speech  that  is  on  the  list  is  'The  Place  of  the  Mov- 
ing Picture  in  the  Mining  Industry,'  by  Mr.  M.  F.  Leopold,  Safety  Engi- 
neer of  the  U.  S.  Bureau  of  Mines. 

[Mr.  Leopold's  paper  will  be  found  on  page  492  of  the  Proceedings.] 

THE  CHAIRMAN:  The  subject  is  a  live  one,  as  to  the  value  of  mov- 
ing pictures  for  general  educational  purposes  and  in  technical  schools, 
and  I  think  that  some  expression  of  opinion  would  be  interesting  to  the 
meeting.  Is  there  any  discussion  at  all  on  this  subject? 

MR.  THOMSON:  We  have  heard  about  these  pictures  from  time  to 
time,  but  they  remain  a  long  way  from  us,  and  we  in  the  Northwest 
would  like  to  have  them  come  closer.  I  notice  that  all  of  the  colleges 
mentioned  by  Mr.  Leopold  were  within  100  miles  of  Pittsburgh,  and  I 
think  the  radius  of  activity  might  be  extended  a  little  farther.  The 
institutions  in  Washington,  Oregon,  Montana,  and  Idaho  are  long  dis- 
tances from  Pittsburgh,  and  I  think  it  would  be  a  good  thing  to  organize 
a  circuit,  and  have  the  pictures  passed  around.  Much  the  same  thing 
might  be  done  with  a  group  of  institutions  in  the  Mississippi  Valley. 
I  am  wondering  whether  there  is  anything  specific  that  Mr.  Leopold  sees 
this  section  might  do  to  expedite  this  work. 

MR.  LEOPOLD:  The  only  thing  I  would  suggest  is  that  one  ot  our 
stations,  Reno,  for  instance,  be  supplied  with  a  complete  set  of  films, 
and  distribute  them  from  that  point.  The  cost  of  production  after  the 
first  film  is  small,  and  if  funds  could  be  provided  to  make  a  distributing 
point  west  of  the  Mississippi,  it  would  be  a  good  thing. 

DR.  WHITE:  I  wonder  whether  it  would  not  do  good  if  a  number 
of  institutions  in  a  group  of  States,  say  Montana,  Washington,  Idaho,  and 
Oregon,  got  together  and  syndicate,  so  that  a  general  request  might  go 


THE  AMERICAN  MINING  CONGRESS  195 

to  the  Bureau  of  Mines,  and  the  films  go  to  those  States  in  the  order 
named,  thus  saving  time,  and  with  a  definite  schedule,  which  would  take 
much  correspondence  out  of  Mr.  Leopold's  hands,  and  assure  them  of 
getting  before  the  largest  number  of  classes  in  the  shortest  possible 
time. 

THE  CHAIRMAN:  I  think  the  suggestion  of  Dr.  White  is  an  excellent 
one.  I  suppose  the  only  reason  the  films  have  not  gone  as  far  as  the 
West  is  that  the  subjects  are  not  as  illuminating  to  the  West  as  they  are 
to  the  East. 

MR.  LYON:  There  are  a  few  that  pertain  to  Western  operations.  I 
think  some  such  scheme  should  be  carried  out,  and  have  a  distributing 
point  in  the  West.  The  matter  of  distributing  the  films  has  been  a  big 
one,  they  beijig  sent  out  from  Pittsburgh. 

PROFESSOR  GRANT:  It  occurred  to  me  that  we  have  a  chain  of 
schools  throughout  the  West — the  country  west  of  the  Missouri  River — 
and  it  seems  that  they  could  be  sent  from  one  school  to  another —from 
South  Dakota  to  Arizona,  New  Mexico  to  Colorado,  and  so  on. 

MR.  LEOPOLD:  I  might  suggest  that  the  films,  after  they  are  loaned 
to  one  school,  do  not  come  back  to  the  Pittsburgh  office.  We  will  say 
they  are  loaned  to  a  school  in  Missouri,  and  if  the  University  of  Illinois 
wants  them  we  ask  the  school  at  Missouri  to  send  it  to  the  school  in 
Illinois.  I  would  suggest  four  or  five  gentlemen  from  the  Western 
States  get  together,  and  we  will  put  the  film  on  a  chain  of  schools,  and 
see  how  it  works  out.  The  films  need  repairing,  and  must  come  back  to 
the  Pittsburgh  office  to  be  cleaned  and  repaired  after  being  shown  8  or 
10  times. 

THE  CHAIRMAN:  Is  there  any  further  discussion  on  the  subject  of 
motion  pictures?  If  not,  I  think  it  will  be  desirable  to  go  on  with  the 
other  matters. 

Is  Mr.  Edwin  Higgins  present?  Mr.  Higgins  has  for  his  subject, 
"Mining  Code  in  California." 

MR.  HIGGINS:  I  suppose  you  would  like  to  know  of  the  code  of  min- 
ing regulations  in  California.  I  think  it  was  in  1913  that  Mr.  H.  M. 
Wolflin,  a  mining  engineer  of  the  U.  S.  Bureau  of  Mines,  went  to  Cali- 
fornia under  a  co-operative  agreement  with  the  State,  whereby  the  State 
paid  half  of  his  expenses  and  the  Bureau  the  other  half.  His  work  was 
to  familiarize  himself  with  conditions  in  Californian  mines  and,  to  formu- 
late mine  safety  rules  for  the  State.  He  spent  two  years  in  investigating 
the  mines,  and  made  a  report  to  the  Bureau.  A  committee  was  then 
appointed  to  formulate  rules.  The  members  consisted  of  four  engineers 
representing  the  California  Metal  Producers'  Association,  three  secretaries 
of  as  many  miners'  unions,  Mr.  Wolflin,  and  the  three  Commissioners  of 
the  Industrial  Accident  Commission  of  California.  Eventually  the  Mine 
Safety  Rules  were  compiled  and  published. 


196  REPORT  OF  PROCEEDINGS 

Mining  Regulations  in  California 

It  had  been  my  observation  that  a  great  many  mine  inspectors  did  not 
fully  enforce  the  law.  On  taking  up  the  work  of  administering*  the  Mine 
Safety  Rules  in  California,  I  made  up  my  mind  that  I  would  not  send  out 
a  corps  of  inspectors  with  this  little  book  in  their  hands,  to  tell  the 
operators  to  follow  the  Rules.  I  felt  that  if  I  should  go  easy  with  the 
Rules  during  the  first  year,  I  could  get  the  co-operation  of  the  manage- 
ments, and  would  get  much  better  results  than  by  arbitrary  demands,  and 
directing  them  to  follow  the  Rules  to  the  letter. 

I  felt  that  there  were  too  many  rules  in  the  book.  There  is  still  some* 
difference  of  opinion  in  the  State  as  to  whether  it  is  best  to  have  few 
rules,  or  whether  it  is  «best  to  have  a  great  many  rules  to  cover  every 
many  details.  Portions  of  the  Rules  have  been  found  objectionable,  and 
have  been  amended. 

I  am  somewhat  of  a  crank  on  the  subject  of  the  personal  element,  and 
I  felt  that  I  could  do  something  in  the  office  that  was  not  in  the  book 
of  rules.  I  felt  that  if  I  could  get  the  miners  to  believe  in  me  that  I 
could  do  more  towards  preventing  accidents  than  I  could  with  the  book 
of  Rules.  I  still  feel  that  way.  Accordingly,  I  organized  the  "Miners 
Safety  Bear  Club."  A  series  of  letters  was  sent  to  all  miners  in  the 
State.  They  contained  heart-to-heart  talks  with  the  miner,  telling  him 
what  he  was  up  against,  and  of  his  responsibility  to  his  employer  and 
family.  I  notified  all  of  the  men  who  wanted  to  join  the  Safety  Bear 
Club  to  send  in  their  names  to  me.  The  number  of  members  grew  until 
in  10  months  we  had  10,000  members  out  of  12,000  miners  in  the  State. 
I  got  them  to  write  their  experiences  about  safety  work,  and  I  really 
think  that  the  plan  did  a  great  deal  to  prevent  accidents. 

Now,  there  are  many  details  of  these  Rules  I  could  talk  over,  but  I  do 
not  know  in  what  particular  one  you  might  be  interested.  They  cover 
every  detail  of  mine  operation.  Possibly  it  might  be  more  interesting  to 
you  if  you  want  information  on  them  to  ask  about  them. 

MR.  THOMSON:  Mr.  Higgins,  would  you  care  to  go  further  in  an 
expression  of  your  opinion  as  .to  the  desirability  of  detailed  rules  versus 
discretion  for  the  inspector? 

Moving  Powder  in  Mines 

MR.  HIGGINS:  Well,  I  could  mention  many  cases  where  specific  rules 
do  not  make  for  greater  safety.  For  instance,  there  is  a  rule  in  the  book 
providing  that  only  one  day's  powder  supply  may  be  kept  in  a  mine.  In 
some  of  the  mines  there  are  several  magazines  underground,  and  it 
would  be  much  safer  to  store  several  days'  supply  in  them  safer  than  to 
carry  the  powder  through  the  mine  every  day.  There  are  other  rules 
that  do  not  fit  all  cases.  On  the  other  hand,  there  is  a  special  clause 
under  which  operators  may  secure  exemption  from  any  rule  which  does 
not  fit  the  case,  or  which  may  work  a  hardship.  I  feel  the  Rules  are  a 
little  top  heavy.  I  would  greatly  prefer  fewer  rules  with  inspectors  who 
know  the  business  and  who  have  some  discretion. 


THE  AMERICAN  MINING  CONGRESS  197 

A  DELEGATE:  The  personal  element  enters  into  the  co-operation  be- 
tween the  mining  company  and  the  chief  mining  inspector. 

MR.  HIGGINS:  I  might  say  when  I  left  the  mine  inspector's  office  I 
took  a  position  with  the  California  Metal  Producers'  Association.  Mr. 
"\Volflin  returned  to  California  to  succeed  me.  This  Association  embraces 
all  the  large  properties  throughout  the  State.  Its  engineer  has  always 
been  in  close  touch  with  the  officials  of  the  Industrial  Accident  Commis- 
sion. This  has  been  a  factor  in  maintaining  pleasant  relations. 

PROFESSOR  GRANT:  Mr.  Higgins,  you  might  state  how  this  worked 
out.  I  know,  as  I  was  an  operator  in  California  when  those  Rules  were 
formulated  or  drawn  up  at  least,  and  at  the  present  time  I  believe  the 
engineer  of  the  Association  acts  practically  as  the  mining  inspector,  does 
he  not?  That  is,  his  recommendations  are  accepted  by  the  mining  oper- 
ators throughout  the  State  as  being  necessary.  Am  I  correct  in  that? 

MR.  HIGGINS:  Well,  to  a  certain  extent.  The  engineer  of  the  Asso- 
ciation goes  around,  and  from  his  familiarity  with  the  rules  he  can  point 
out  defects.  His  suggestions  are  usually  followed. 

There  is  one  thing  I  did  not  tell  you:  When  I  went  into  office  T  had  3 
deputies,  and  I  said,  "Boys,  here  is  a  book  of  Rules;  take  it  along  with 
you,  but  when  you  go  to  the  mines,  find  out  at  each  mine  what  is  hurting 
and  killing  the  men.  Get  after  those  things  first  and  remedy  them."  I 
said  to  them,  "We  will  work  that  way  the  first  six  months,  and  not  look 
so  much  at  the  Rules."  There  was  one  law  I  did  enforce,  and  that  was 
the  one  requiring  a  second  exit  from  deep  mines. 

THE  CHAIRMAN:  The  next  subject  is  the  paper  by  Dr.  David  White 
of  the  U.  S.  Geological  Survey,  entitled,  'The  Place  of  Geology.' 

[This  paper  will  be  found  on  page  456  of  the  Proceedings.] 

THE  CHAIRMAN:  We  would  like  to  hear  from  the  Washington  State 
Geological  Survey. 

MR.  HARRY  LANDES:  Our  Survey  is  divided  into  three  parts.  One 
co-operates  closely  with  the  Federal  Survey  in  the  preparation  of  topo- 
graphical maps,  as  outlined  by  Dr.  White.  It  is  costing  the  State  $22  per 

Cost  of  Surveys  in  Washington 

square  mile  for  this  work,  compared  with  $12  for  that  done  throughout 
the  whole  country  by  the  Federal  bureau.  For  10  years  the  State  has  not 
failed  to  make  an  appropriation,  but  this  has  not  increased  with  the  rise 
in  costs.  The  co-operation  scheme  has  been  very  successful,  especially  in 
stream  measurements.  We  are  allowed  to  choose  where  the  maps  shall 
be  made.  Local  pressure — from  mining  men  and  irrigationists — is  fre- 
quently a  problem.  Regarding  strictly  geologic  work,  while  there  is  no 
formal  agreement  between  the  State  and  Federal  Surveys,  there  is  an  uu 
derstanding  as  to  what  work  shall  be  done,  so  that  there  is  no  serious 
duplication.  We  are  collecting  a  lot  of  valuable  data,  which  are  often 


198  REPORT  OF  PROCEEDINGS 

consulted  by  the  public.     A  State  survey  should  have  such  information 
available,  as  much  waste  time  and  money  is  avoided. 

THE  CHAIRMAN:  The  next  subject  on  our  program  is  'Geology  and 
Metal  Mining  With  Particular  Reference  to  the  Work  of  the  U.  S.  Geo- 
logical Survey,'  by  Mr.  F.  L.  Ransome. 

[Mr.  Ransome's  paper  will  be  found  on  page  407  of  the  Proceedings.] 

THE  CHAIRMAN:  Gentlemen,  I  know  you  consider  it  a  privilege  to 
have  heard  from  Mr.  Ransome.  Everybody  knows  him  in  the  West,  and 
of  his  services  to  the  mining  industry  and  economic  geology. 

The  meeting  then  adjourned. 


NOVEMBER    19,  1920,  9.30  A.  M. 
Mr.  Illinski  of  New  Mexico,  presided 

THE  CHAIRMAN:  The  meeting  will  please  come  to  order.  In  the 
absence  of  Dr.  Fulton  I  will  act  as  the  temporary  chairman  of  this  Asso- 
ciation. Mr.  G.  B.  Morgan,  State  Geologist  of  Wyoming,  will  give  us  a 
talk  on  the  geology  of  that  State. 

[Mr.  Morgan's  paper  will  be  found  on  page  471  of  the  Proceedings.] 

MR.  THOMSON:  I  wonder  if  Mr.  Morgan  might  make  it  clear  the 
amount  of  support  the  Geological  Survey  receives,  or  was  your  statement 
that  it  was  a  one-man  organization  intended  to  convey  the  idea  that  what 
you  have  in  Wyoming  is  a  State  Geologist  with  a  salary  for  such  and  noth- 
ing more?  or  whether  you  plan  on  asking  fo  a  further  appropriation  for 
the  office? 

MR.  MORGAN:  The  statute  simply  gives  the  Governor  the  power  to 
appoint  a  State  Geologist,  and  he  is  given  an  appropriation  each  biennial 
period  to  work  with  as  he  sees  fit.  He  may  work  up  the  routine  of  the 
office  and  such  publicity,  and  also  work  for  the  State  Land  Board.  But, 
what  we  are  trying  to  do  is  to  get  the  Legislature  to  enact  laws  creating 
the  office  of  an  Assistant  State  Geologist. 

MR.  THOMSON:  Does  the  statute  provide  for  the  appointment  of  a 
State  Geologist  by  the  Governor,  and  define  his  duties? 

MR.  MORGAN:  It  does  to  some  extent,  and  then  there  are  later  laws 
that  define  the  duties. 

MR.  THOMSON:  But  in  none  of  these  laws  is  there  authorization  for 
more  than  a  one-man  job,  is  that  the  size  of  it? 

MR.  MORGAN:  That  is  its  status.  Although  we  employ  a  field  man, 
it  has  to  be  done  under  the  direction  of  the  State  Geologist,  and  there 


THE  AMERICAN  MINING  CONGRESS  199 

will  be  no  title  for  this  office;  the  man  would  have  no  title  except  Field 
Assistant.  He  has  no  regular  employment  as  Assistant  State  Geologist; 
it  is  simply  temporary  work.  We  want  to  change  that,  and  have  a  State 
Geological  Survey  with  a  director  and  assistants,  and  State  Geologist 
with  an  assistant. 

MR.  THOMSON:  Is  there  any  connection,  local  or  otherwise,  between 
the  State  Geologist  and  the  State  University? 

MR.  MORGAN:  No,  except  that  the  State  Geologist  has  supervisory 
power  over  all  State  lands — all  mineral  lands  and  those  including  the 
University  lands  as  well — and  it  is  his  job  to  see  that  these  lands  are 
properly  handled  from  a  mineral  point  of  view,  and  get  the  best  revenues, 
and  see  that  the  best  interests  of  the  State  are  served.  The  last  Legis- 
lature enacted  that  law  as  a  particular  piece  of  legislation  requiring  the 
State  Geologist  to  take  over  and  take  control  of  all  State  lands.  It  is  an 
important  piece  of  work,  you  can  see,  because  of  the  immense  wealth 
in  those  lands;  and  the  State  Geologist  might  be  able  to  increase  the  rev- 
enue of  the  State  to  a  great  extent,  and  save  a  lot  of  money. 

MR.  THOMSON:  As  I  understand  it,  the  lands  of  Wyoming  have 
turned  out  similarly  as  was  the  case  in  the  lands  of  Minnesota.  In  Min- 
nesota it  turned  out  to  be  iron-ore  land,  and  in  your  State  is  has  turned 
out  to  be  oil-bearing,  that  is  true,  isn't  it? 

MR.  MORGAN:  Yes,  both  school  lands  and  University  lands  have 
turned  out  to  be  very  good.  Those  lands  were  first  selected  by  farmers 
and  ranchers  for  the  purpose  of  leasing.  Then  they  had  the  University 
and  the  State  select  the  lands  primarily  for  their  own  purposes,  after 
which  they  were  released  to  the  University.  Some  were  down  in  the  val- 
leys, the  Platte  Valley,  for  instance;  and  while  others  were  in  the  Big 
Muddy  field,  Rock  Creek,  Salt  Creek  field,  and  other  places,  which  turned 
out  to  be  very  valuable  oil  lands. 

MR.  THOMSON:  Is  there  any  idea  of  what  the  range  of  probable 
value  of  University  lands  is,  as  evidenced  by  their  underlying  oil-bearing 
strata? 

Oil-Bearing  Sands  of  Wyoming 

MR.  MORGAN:  I  do  not  think  that  has  ever  been  estimated.  Some 
are  very  valuable  in  the  Big  Muddy  field,  where  they  are  getting  another 
production  from  the  second  Wall  Creek  sand,  which  they  have  in  Salt 
Creek.  The  sand  is  thick,  and  recently  they  brought  in  heavier  production 
from  their  wells,  and  eventually  they  will  produce  a  lot  of  oil.  As  I  said, 
after  they  reach  the  second  sands  they  have  a  fine  production,  and  in  the 
Salt  Creek  field  it  is  hard  to  foretell  what  it  will  amount  to.  The  Rock 
Creek  field,  in  which  the  State  lands  are  involved,  show  evidence  of  long 
life  and  large  production.  This  is  worked  upon  a  royalty  basis,  and  the 
moneys  that  are  coming  in  are  all  put  into  a  permanent  fund;  only  the 
interest  can  be  used  at  the  present  time.  It  is  not  helping  much,  but 
eventually  it  may  do  so. 


200  REPORT  OF  PROCEEDINGS 

DR.  WHITE:  This  has  been  a  very  interesting  statement  of  responsi- 
bilities and  of  plans  and  opportunities  that  are  really  unrivalled,  and  it 
seems  to  me  that  the  psychology  of  the  economic  situation  all  favor  the 
success  of  Mr.  Morgan's  undertaking  and  hopes.  The  outline  that  he 
presents  reminds  me  to  interject  a  question  that  is  aimed  not  merely  at 
the  work  of  the  State  of  Wyoming,  nor  is  it  intended  to  criticise  in  any 
way  the  plans  of  the  State  Mining  Bureau,  which  are  so  largely  repre- 
sented here:  I  get  the  idea,  which  accords  with  the  spirit  of  the  times, 
that  these  Geological  Surveys  and  Mining  Bureaus  of  States  west  of  the 
Mississippi — there  are  no  Eastern  men  here  I  believe — are  given  almost 
entirely  to  utilitarian  geology.  I  am  not  criticising  at  all.  It  is  a  condi- 
tion, not  a  theory  that  confronts  us,  but  I  would  like  to  enter  just  a 
Question  as  to  what  real  scientific  work  is  best,  and  what  has  been  con- 
templated by  Mr.  Morgan.  Has  any  work  been  planned  by  any  of  these 
powers  in  paleontology,  working  geology,  general  tectonics,  the  history  of 
the  earth's  movements,  the  question  of  faulting,  and  all  other  scientific 
studies  relating  to  geology?  I  want  to  know  if  we  have  to  carry  the  bag 
for  all  of  the  States  west  of  the  Mississippi,  or  whether  some  of  you  will 
give  us  help  on  it?  Some  of  you  have  some  money,  and  have  the  best 
chances  to  get  all  you  want.  Are  any  of  you  making  plans  for  a  historical 
geology?  I  may  say  that  paleontology  boys  or  graduates  are  very  scarce, 

Shortage  of  Paleontologists 

they  are  picked  up  by  the  oil  companies,  and  the  scarcity  of  workers  in 
paleontology  is  a  great  drawback.  We  are  having  our  difficulties,  we  can- 
not secure  money  for  all  the  scientific  work  that  we  would  like  to  do.  If 
we  have  to  do  it  all — and  it  is  all  left  for  us  to  do — it  is  going  to  make 
much  slower  progress  than  it  should.  You  will  confronted  after  a  time 
in  areal  work  and  paleontology.  We  are  glad  indeed  to  help  in  a  deter- 
mination of  fossils,  or  any  determination  of  minerals,  and  that  is  one  of 
our  reasons  for  being  here.  But,  we  have  a  situation  in  paleontology  that 
is  difficult,  and  the  young  men  who  are  in  training  are  hard  to  get.  If  in 
some  of  these  Western  surveys  where  money  is  relatively  easily  secured, 
geological  research  is  a  stock  in  trade,  and  if  capital  is  the  germ  on 
which  economic  geology  is  to  live,  if  you  do  not  get  busy  you  are 
going  to  run  out  and  have  to  depend  upon  the  services  of  others.  At 
some  future  meeting  I  should  like  to  have  the  matter  considered  of  the 
geological  research  is  a  stock  in  trade,  and  as  capital  is  the  germ  ou 
organization  of  a  board  on  paleontologic  work.  Paleontological  work 
must  be  done  under  State  organization.  University  men  cannot  give  us 
any  great  assistance  in  doing  this,  and  the  State  and  the  Federal  Surveys 
must  carry,  on  the  historical  work  in  geology,  so  I  commend  it  to  your 
consideration  and  should  like,  if  at  some  time  we  could  hold  a  conference 
of  all  State  Geologists  and  heads  of  the  different  Mining  Bureaus.  I 
think  that  geologic  history  can  be  better  done  than  we  can  do  it  alone. 
This  would  include  examination  of  fossils  from  oil-wells.  The  fossils 
sent  in  by  oil  companies  are  taking  up  a  large  part  of  the  time  of  the 
regular  systematic  work  of  the  Department.  We  are  trying  to  develop 


THE  AMERICAN  MIXING  CONGRESS  201 

specialists,  but  it  wil  take  a  large  number  of  men  to  cover  the  field  in 
paleontology. 

THE  CHAIRMAN:  Gentlemen,  are  there  any  representatives  of  the 
State  Geological  Surveys  who  will  respond  to  Dr.  White's  question? 

DR.  WHITE:  Mr.  Chairman,  that  was  merely  my  view  rather  than  to 
interject  a  new  thought  into  the  discussion. 

THE  CHAIRMAN:  Dr.  A.  F.  Fischer  of  the  Philippine  Islands  is  here, 
and  he  will  discuss  the  education  of  foreign  students  in  the  United  States. 

The  gist  of  Dr.  Fischer's  remarks  are  as  follows: 

Being  in  an  administrative  position  as  Director  of  the  Bureau  of 
Forestry,  also  Dean  of  the  School  of  Forestry  of  the  Philippines  at 
Manila,  I  receive  Filipino  students  returning  from  the  United  States  with 
many  degrees,  and  working  in  this  Bureau.  Naturally,  the  people  there 

Result  of  Orientals  Studying  in  America 

look  up  to  those  returning  Filipinos.  We  have  to  recognize  a  little 
political  pressure  and  give  them  responsible  positions.  In  a  way  these 
men  are  Orientals  with  a  European  viewpoint  and  think  that  a  diploma 
is  the  acme  of  education;  but  they  have  fallen  down  in  their  work. 
Government  officials  do  not  blame  the  Filipinos,  but  they  blame  the  insti- 
tution and  country  in  which  the  education  was  received.  It  would  appear 
that  the  Faculties  of  colleges  and  universities  have  sympathy  for  foreign 
students,  and  grant  them  diplomas,  although  the  required  study  has  not 
been  accomplished.  Such  students  never  attain  the  standard  of  the 
average  American  student.  When  they  return  to  the  Orient  they  fail. 
Chinese  students  from  Philippine  schools  have  proved  superior  to  those 
trained  in  America.  They  should  be  made  to  reach  the  proper  mark  as 
is  done  in  the  Philippines. 

A  discussion  followed  these  remarks,  but,  by  motion  made,  were  ordered 
left  out  of  the  record. 

THE  CHAIRMAN:  Gentlemen,  we  must  get  on  with  our  program  as 
we  are  short  on  time.  We  have  with  us  today  Mr.  D.  A.  Lyon  of  the 
U.  S.  Bureau  of  Mines,  who  will  read  us  a  paper  on  Federal  co-operation 
by  the  U.  S.  Bureau  of  Mines. 

MR.  LYON:  I  have  not  any  set  paper  at  all,  and  as  the  Director  is 
here  I  think  we  had  better  hear  from  him. 

DR.  F.  G.  COTTRELL,  Director  of  the  U.  S.  Bureau  of  Mines: 
I  have  seen  so  little  of  your  proceedings  that  I  think  there  are  other 
people  here  who  could  give  you  a  much  better  idea  than  mine,  but  I  want 
to  say  that  we  will  be  glad  to  be  of  any  service,  and  will  try  to  develop  a 
co-operation  of  work.     I  think  I  had  better  leave  the  details  of  the  subject 
to   Mr.   Lyon. 
The  gist  of  Mr.  Lyon's  remarks  is  as  follows: 


202  REPORT  OF  PROCEEDINGS 

Most  of  you  are  familiar  with  the  organization  of  the  Bureau's  Experi- 
mental Station  work.  The  Bureau  does  not  carry  on  much  research  work 
in  Washington;  in  fact,  it  has  practically  no  laboratory  there  at  all.  The 
first  station  was  established  at  Pittsburgh.  Most  of  its  work  is  devoted 
to  coal  mining.  Of  the  money  invested  in  the  mining  industry  the  greater 

The  Bureau  of  Hines  Stations 

proportion  has  been  put  into  coal  mining.  Pittsburgh  is  not  what  we 
call  a  co-operative  station.  The  first  work  along  that  line  was  with  the 
University  of  Illinois.  Denver  got  the  next  station.  It  is  called  'The 
Rare  Metals  Station,'  it  being  a  place  for  the  study  of  radium-bearing 
ores.  Then  followed  Dr.  Cottrell's  work  on  smelter  fume  in  San  Fran- 
cisco. The  first  co-operative  work  with  a  State  University  was  in  Utah 
in  1913.  This  was  largely  through  the  efforts  of  Dr.  Merrill.  I  was 
appointed  to  take  charge  and  remained  there  three  years.  Then  Congress 
passed  the  Foster  Bill,  creating  10  stations,  of  which  eight  are  now  es- 
tablished in  various  parts  of  the  country.  Each  has  its  particular  prob- 
lems, such  as  coal  at  Pittsburgh,  mine  fires  and  mine  subsidences  at 
Urbana,  ceramics  at  Columbus,  petroleum  at  Bartlesville,  low-grade  iron 
ores  at  Minneapolis,  low-grade  complex  lead  and  zinc  ores  at  Salt  Lake 
City,  low-grade  copper  ores  at  Tucson,  miscellaneous,  but  especially  non- 
ferrous  metallurgy  at  Berkeley,  coal,  ceramics,  and  electro-chemical  metal- 
lurgy for  the  Northwest  at  Seattle,  and  lead  and  zinc  ores  at  Mississippi 
Valley.  The  Birmingham  station  will  probably  deal  with  coke,  iron  ores 
and  ferro-alloys.  '"""fS^ 

The  Federal  Bureau  is  co-operating  with  the  State  Bureau  of  Mines 
and  Geology  of  Oregon,  also  similarly  in  Idaho.  Funds  for  the  10  stations 
were  only  $25,000  per  annum,  but  with  the  co-operative  funds  from  the 
States  we  are  able  to  manage.  At  present  there  are  in  all  10  main  sta- 
tions, twelve  at  educational  institutions  and  eighteen  with  industrial 
concerns,  a  total  of  forty.  The  amount  of  money  expended  in  this  co- 
operation, as  given  from  the  outside,  is  $512,800  per  year.  We  are  de- 
sirous of  joining  with  a  State  in  any  problem.  Perhaps  the  most  active 
work  is  that  being  done  at  Salt  Lake  City.  Generally,  we  aim  to  secure 
data  that  will  be  of  help  industrially  as  a  whole,  rather  than  endeavor  to 
work  too  precisely.  At  Bartlesville,  the  work  largely  concerns  waste  at 
oil-wells,  getting  the  water  out  of  them,  etc.  At  Boulder,  Colorado,  we 
are  studying  oil-shale,  also  at  Salt  Lake  City.  Colorado  voted  $10,000  for 
this  investigation,  and  Utah,  $12,500. 

THE  CHAIRMAN:  Gentlemen,  I  believe  we  all  would  be  interested  in 
hearing  a  few  remarks  from  Dr.  Merrill. 

DR.  MERRILL:  Through  a  special  bequest  we  have  now  a  laboratory 
fund  to  support  this  research  work.  We  conceived  the  idea  the  best 
way  to  get  State  funds  was  to  appoint  'Fellows'  to  go  into  the  metallur- 
gical and  research  department,  and  become  assistants  of  the  Director. 
We  did  not  have  laboratory  facilities  to  support  the  work;  but  fortunately 


THE  AMERICAN  DINING  CONGRESS  203 

a  bequest  of  $50,000  was  made  to  us  about  that  time,  and  we  use  the 
income  entirely  from  that  to  support  the  laboratory  work. 

MR.  LYON:  I  might  say  that  the  one  thing  we  have  been  up  against 
in  the  Western  schools  is  the  laboratory.  We  cannot  carry  on  research 
work  unless  we  have  a  good  laboratory,  and  I  have  an  idea  that  we  have 
been  very  fortunate  in  getting  one  that  meets  our  requirements.  I  must 
say  that  I  think  some  of  our  Eastern  schools  lack  laboratories. 

THE  CHAIRMAN:  Gentlemen,  if  there  are  no  more  questions  to  be 
asked  on  the  subject  we  will  hear  from  Mr.  A.  L.  Murray  of  the  U.  S. 
Bureau  of  Mines,  who  will  read  a  paper  that  has  been  prepared  by  Mr. 
C.  A.  Allen,  Mining  Engineer  of  the  Bureau  and  Chief  Mine  inspector 
for  the  Industrial  Commission  of  Utah,  on  'Mining  Welfare  Work  in  Utah.' 

[Mr.  Allen's  paper  will  be  found  on  page  477  of  the  Proceedings.] 

[The  papers  of  F.  W.  Huels  and  Joseph  Hyde  Pratt  will  be  found  on 
pages  481  and  488,  respectively.] 

THE  CHAIRMAN:  There  being  nothing  further  to  come  before  this 
meeting  we  will  now  adjourn.  Thereupon  the  meeting  adjourned. 


204  REPORT  OF  PROCEEDINGS 


JOINT  MEETING  OF  COAL  AND  METAL  SECTIONS  STAND- 
ARDIZATION  COMMITTEE 

The  American  Mining  Congress 
MONDAY,  NOVEMBER  15,  1920,  11  A.  M. 

Carl   Scholz,   Acting   Chairman   of  the   Coal   Section;    Chas.   A.    Mitke, 
Chairman  of  the  Metal  Section,  presided. 

The  following  were  in  attendance,  including  those  who  registered  after 
the  session  started: 

EARNHARDT,  G.  W.,  Marion  Steam  Shovel  Mfg.  Co.,  San  Francisco, 
California. 

BAYLES,   L.    C.,   Ingersoll-Rand  Co.,  Phillipsburg,    N.    J. 

BOOM,  B.  P.,  Westinghouse  Electric  Mfg.  Co. 

BREWSTER,  T.  T.,  vice-president  Mt.  Olive  &  Stanton  Coal  Company, 
St.  Louis,  Missouri. 

BRIGHT,  G.,  Westinghouse  Electric  Mfg.  Co.,  Denver,  Colorado. 

BRODEN,  CHARLES  E.,  Hazard  Mfg.  Co.,  Wilkes-Barre,  Pa. 

BURGESS,  GEORGE  K.,  with  U.  S.  Bureau  of  Standards  and  also  Ameri- 
can Engineering  Standardization  Committee. 

CARROLL,  FRANK,  Ingersoll-Rand  Co.,  Los  Angeles,  California. 

COTTRELL,  J.  G.,  Director  U.  S.  Bureau  of  Mines,  Washington,  D.  C. 

CURRY,  J.  E.,  Arizona  Chapter  of  American  Mining  Congress. 

DOUBLEDAY,  F.  E.,  Doubleday  Coal  Co.,  Fort  Scott,  Kansas. 

EBE,  J.  A.,  consulting  mining  engineer,  LaSalle,  111.;  and  manager  of 
Mining  Department  of  Illinois  Zinc  Co.,  Peru,  Illinois. 

GOLDEN,  JAMES,  Mining  Inspector,  Fourth  District,  W.  Va. 

GRENSFELDER,  N.  S.,  Hercules  Powder  Co.,  Wilmington,  Del. 

HALL,  R.  D.,  Coal  Age,  New  York  City. 

JOWETT,  J.  H.,  Ingersoll-Rand  Company,  New  York. 

KASEMEN,  G.  A.,  president  Albuquerque  &  Cerrillos  Coal  Co.,  Albu- 
querque, New  Mexico. 

KIDDIE,  JOHN,  superintendent  Mining  Department,  Arizona  Copper 
Co.,  Clifton,  Arizona. 

KIPP,  ERNEST  B.,  local  representative  Hazard  Mfg.  Co.,  Wilkes-Barre, 
Pennsylvania. 

KISER,  A.  V.,  superintendent  Electric  Equipment  Coal  Co.,  Pittsburgh, 
Pennsylvania. 

LAMPINEN,  E.  0.,  Kavehills  Coal  Co.,  South  Dakota. 


THE  AMERICAN  MIXING  CONGRESS  205 

LARSON,  C.  W.,  engineer  Mining  Dept.,  General  Electric  Co.,  Erie,  Pa. 

LONGYEAR,  ROBERT  D.,  E.  Y.  Longyear  Co.,  Minneapolis,  Minn. 

LUNT,  H.  F.,  State  Commissioner  of  Mines,  Denver,  Colo. 

MARKS,  J.  B.,  Colorado  Fuel  &  Iron  Co.,  Denver,  Colo. 

MILLIKEN,  JAMES,  president  Industrial  Car   Manufacturers  Institute, 

Pittsburgh,    Pa. 

MITKE,  CHARLES  M.,  consulting  engineer,  Bisbee,  Arizona. 
MORRISON,  A.  CRESSY,  National  Acetylene  Assn.,  New  York  City. 
MOTT,    CHESTER,    district   manager,    Sullivan    Machinery   Co.,    Denver, 

Colorado. 

MCKEEHAN,  D.  C.,  Union  Pacific  Coal  Co.,  Rock  Springs,  Wyo. 
MCKINLEY,  C.   S.,  Denver,   Colorado. 
NEEDHAM,  JOHN,  Mining  Department  of  the  Chicago,  Milwaukee  &  St. 

Paul  R.  R.,  63  E.  Adams  St.,  Chicago,  111. 

NORMAN,  FRED.,  The  Alleghany  River  Mining  Co.,  Kittanning,  Pa. 
NOTMAN,  ARTHUR,  superintendent,  Mining  Department,  Phelps  Dodge 

Corporation,  Bisbee,  Arizona. 

OFFICER,  C.  H.,  Sullivan  Machinery  Co.,  Chicago,  Illinois. 
PARKER,    RICHARD    A.,    representing    the    Mining    and    Metallurgical 

Society  of  America,   Denver,  Colorado. 
RAIT,  E.  M.,  Arizona  Mining  Co.,   Clifton,  Arizona. 
RICHARDS,  J.  W.,  assessor,  Denver,  Colorado. 
RICHARDS,  P.  J.,  coal  analyst,  Denver,  Colorado. 
RISDON,  W.  W.,  State  Mine  Inspector,  Gallup,  New  Mexico. 
ROBINSON,  HARRY  W.,  attorney-at-law,  Denver,  Colorado. 
ROBINSON,   — ,   General   Electric   Co.,    Denver,   Colorado. 
ROWE,  W.  A.,  American  Blower  Co.,  Detroit,  Michigan. 
SCHOLZ,  CARL,  JR.,  Raleigh-Wyoming  Coal  Company,  Charleston,  West 

Virginia. 

SCOTT,  R.  A.,  Denver  Rock  Drill  Mfg.  Co.,  Denver,  Colorado. 
SMITH,  C.  D.,  Goodman  Mfg.  Co.,  Chicago,  Illinois. 
SMITH,  ROY  F.,  Empire  Zinc  Co.,  Denver,  Colorado. 
THOMPSON,  G.  S.,  Fuel  Department,  Colorado  Fuel  &  Iron  Co.,  Pueblo, 

Colorado. 

UHLER,  A.  S.,  Ingersoll-Rand  Co.,  New  York. 
VICTOR,  A.  F.,  Lake  Superior  Motor  Co.,  Duluth,  Minnesota. 
WALSH,  H.  G.,  Sullivan  Machinery  Co.,  Chicago,  Illinois. 
WATTS,  C.  E.,  Berwind  Coal  Co.,  Windber,  Pennsylvania. 
WILSON,   H.   M.,    general   manager   The  Associated   Companies,   Hart- 
ford, Connecticut. 

CHAIRMAN  MITKE:     Mr.  Scholz  and  I  have  decided  that  instead  of 


203  REPORT  OF  PROCEEDINGS 

taking  up  technical  matters  this  morning,  we  will  confine  our  discussion 
to  subjects  of  general  interest  to  the  Coal  and  Metal  Sections. 

The  method  of  procedure  adopted  by  the  Metal  Section  of  the  Stand- 
ardization Committee,  is  as  follows: 

First,  a  general  committee,  consisting  of  a  chairman  and  six  members 
was  appointed,  each  of  the  seven  being  in  turn,  chairmen  of  the  Sub- 
Committees.  Seven  Sub-Committees,,  were  then  appointed,  the  personnel 
representing  practically  every  mining  State  in  the  Union. 

Meetings  not  Suitable;  Work  by  Correspondence 

Owing  to  the  fact  that  our  Committee  members  live  so  far  apart,  fre- 
quent meetings  were  out  of  the  question,  and  all  the  work  must  therefore 
be  carried  on  by  correspondence.  In  order  to  provide  a  working  base, 
questionnaires  have  been  prepared  by  the  various  chairmen  and  sent  not 
only  to  Committee  members,  but  to  operators  in  district  not  represented 
by  them.  Upon  receipt  of  these  questionnaires,  properly  filled  out,  the 
information  thus  obtained  is  tabulated  and  then  sent  out  to  the  Com- 
mittee members  for  their  study,  comments,  and  suggestions.  By  this 
means  it  is  hoped  that  valuable  deductions  may  finally  be  evolved,  which 
will  prove  of  material  benefit  to  the  mining  industry.  This  is  the  plan  of 
the  Metal  Section.  Mr.  Scholz,  who,  in  Colonel  Roberts'  absence  in 
Illinois,  is  acting  chairman  of  the  Coal  Section,  will  give  us  an  outline 
of  the  manner  in  which  that  Section  is  functioning. 

MR.  SCHOLZ:  Colonel  Roberts  has  been  in  charge  of  this  matter  and 
will  make  a  report  later  on,  showing  how  effective  his  work  has  been. 
Unfortunately,  I  have  not  had  time  to  give  the  subject  the  full  consider- 
ation it  deserves.  I  am  sure,  however,  that  the  Committee  is  going  to  do 
a  lot  of  good. 

The  Committee  of  which  I  am  chairman — on  Mining  and  Loading  Ma- 
chinery—  is  an  important  one.  We  feel  that  with  the  high  cost  of  labor, 
mechanical  mining  and  loading  is  more  in  demand  than  ever.  Our  idea 
has  been  to  standardize  certain  general  equipment  on  which  we  could 
agree.  We  found  that  there  were  more  differences  among  the  manufac- 
turers than  we  felt  should  exist.  Of  course,  we  realized  that  every  manu- 
facturer has  certain  professional  secrets  which  he  keeps  himself,  which 
we  should  approach  with  more  or  less  consideration  and  care;  but  I  do 
feel  that  we  ought  to  get  closer  together  than  we  have,  in  order  to  sim- 
plify the  question  of  repairs  and  maintenance  and  other  matters,  although 
equipment  matters  are  such  that  we  may  not  be  able  to  do  much  with 
them  at  this  time.  Of  course,  we  do  not  care  to  standardize  such  things 
as  miners'  houses,  because  it  requires  a  diversity;  but  as  far  as  equip- 
ment is  concerned,  when  we  sample  ihe  parts  in  the  interest  of  the 
manufacturers,  it  will  enable  us  to  test  vnachinery  that  otherwise  would 
be  barred,  because  every  company  operating  far  from  a  manufacturer 
knows  what  a  tremendous  amount  of  money  it  requires  to  secure  a  stock 
of  repair  parts.  The  detailed  reports  I  understand  will  be  read  at  some 
later  meeting.  The  present  object  is  to  get  acquainted  and  see  what  we 
could  agree  upon  as  to  a  plan  of  action. 


THE  AMERICAN  MINING  CONGRESS  207 

MR.  MITKE:  Has  anyone  any  suggestions  about  the  general  plan  of 
investigation  that  we  should  adopt,  or  anything  whatever  to  offer? 

MR.  G.  BRIGHT:  I  should  like  to  bring  up  something  in  connection 
with  the  Committees  on  Coal  Mining  and  Metal  Mining.  In  many  in- 
stances the  work  is  entirely  different.  Some  of  the  Committees  on  the 
latter  have  subjects  to  consider  which  do  not  concern  coal  at  all,  and  I 

Merging  of  Committees  on  Parallel  Subjects 

understand  there  are  other  Committees  that  are  almost  parallel.  I  think 
that  it  would  be  somewhat  advantageous  for  those  Committees — for  in- 
stance, Underground  Transportation — to  work  together;  otherwise,  if 
they  work  entirely  separate,  it  looks  as  if  they  may  come  in  with  recom- 
mendations that  are  rather  far  apart,  and  it  would  be  rather  difficult  for 
the  American  Mining  Congress  to  issue  these  recommendations  to  the 
public  when  they  do  not  agree  at  all;  while  if  these  Committees  worked 
together,  they  could  no  doubt  come  to  some  definite  agreement  on  which 
the  same  standards  could  be  reached.  Conditions  are  different  in  coal 
and  metal  mining;  on  the  other  hand,  there  are  some  conditions  on  which 
the  same  standards  could  be  reached. 

MR.  MITKE:  Your  idea  is  that  transportation  is  transportation  the 
world  over? 

MR.  SCHOLZ:     So  is   drainage. 

MR.  BRIGHT:  Of  course,  ventilation  and  some  problems  like  that  are 
similar. 

MR.  A.  V.  RISER:  Underground  equipment  and  underground  trans- 
mission are  parallel,  and  we  should  not  bring  in  a  recommendation  which 
we  think  is  not  concurred  in  by  the  Metal  Mining  Committee. 

MR.  MITKE:  The  Sub-Committee  on  Coal  Transportation  and  the 
Sub-Committee  on  Metal  Transportation  might  get  together,  and  compare 
and  correlate  their  reports. 

MR.  KISER:     Yes,  after  their  Committees  agree  on  the  reports. 

MR.  BRIGHT:  When  it  comes  to  the  final  meeting,  at  the  end  of  next 
year  [1921],  we  are  hoping  that  we  will  have  something  that  is  really 
worth-while,  but  in  the  meantime  they  can  exchange  their  reports,  long 
before  that,  and  have  them  pretty  well  discussed. 

MR.  MITKE:  That  is  a  good  suggestion.  In  fact,  I  understand  some 
of  the  reports  of  the  Committees  of  the  Coal  Mining  division  are  ready 
for  publication  and  distribution  now. 

MR.  SCHOLZ:  I  wish  to  hand  in  the  report  of  the  Coal  Mining  branch 
of  this  Committee  to  be  read,  if  the  time  affords. 

'  MR.  MITKE:     I  believe  it  wiuld  be  better  to  defer  that  until  the  meet- 
ing of  the  Coal  Section  tomorrow  morning. 


208  REPORT  OF  PROCEEDINGS 

Mr.  Notman  has  some  suggestions  about  the  progress  in  carrying  out 
the  investigation  which  might  be  helpful  in  facilitating  matters  more  or 
less,  especially  in  arranging  details. 

MR.  ARTHUR  NOTMAN:  I  have  given  the  matter  quite  a  little 
thought,  but  I  do  not  know  whether  my  ideas  will  agree  with  the  other 
members  of  our  Sub-Committee  or  not.  I  am  on  the  Sub-Committee  on 
drilling  machines  and  steel,  and  I  received  with  interest  the  question- 
naire from  our  chairman,  Mr.  Braly,  who,  unfortunately  is  not  here,  but 
I  was  unable  to  complete  it  before  leaving  Bisbee.  We  have  been  engaged 
in  an  investigation  on  the  subject  during  the  past  six  months,  and  I  have 
a  report  which  I  hope  to  be  able  to  present  to  Mr.  Braly  in  person,  but 
with  Mr.  Mitke's  permission  I  will  present  it  at  the  meeting  of  the  Metal 
Section  tomorrow  afternoon.  It  occurred  to  me,  that  in  order  to  expedite 
matters,  it  might  be  advisable  to  have  an  inner  circle,  covering  this  Sub- 
Committee — which  I  understand  has  a  membership  of  about  .forty — and 
discuss  the  question  in  detail,  and  have  them,  with  Mr.  Braly,  go  over 
the  questionnaires,  and  any  detailed  reports  that  may  be  presented  here, 
and  summarize — as  our  Chairman  has  suggested — all  that  information. 

Question  of  Procedure 

Then  there  could  be  at  least  one  meeting  of  that  smaller  group,  prior  to 
the  next  annual  convention  of  the  Mining  Congress,  early  enough  so  that 
their  resolution  or  report  to  their  chairman  could  be  referred  back  to  all 
the  members  of  the  Sub-Committee  on  drilling  machines  and  steel  for 
their  criticism  and  suggestions,  in  advance  of  the  Mining  Congress  meet- 
ing. As  Mr.  Mitke  has  pointed  out,  it  is  extremely  difficult  for  the  mining 
industry,  particularly  because  we  are  so  scattered,  to  get  any  representa- 
tive number  together  and  discuss  a  question  like  standardization,  which 
is  almost  entirely  a  matter  of  detail,  and  in  order  to  accomplish  some- 
thing, we  must  have  a  few  men  who  can  get  together. 

I  have  three  copies  of  my  report  which  I  would  like  to  give  to  repre- 
sentatives of  drill  manufacturers  in  advance  of  the  meeting  tomorrow, 
so  that  they  might  have  an  opportunity  to  digest  it  and  discuss  it  at  that 
time. 

MR.  MITKE:  I  shall  now  read  a  report  sent  by  Colonel  Roberts,  con- 
cerning the  meeting  of  the  General  Correlating  Committee  of  the  Ameri- 
can Engineering  Standards  Committee,  held  in  New  York  recently: 

The  report  states  that,  in  accordance  with  a  call  sent  out  by  Mr.  P.  G. 
Agnew,  secretary,  a  conference  was  held  in  New  York  on  November  11, 
1920,  with  representatives  present  from  each  of  the  five  national  organi- 
zations and  societies  to  whom  the  call  was  sent,  namely,  the  (1)  American 
Institute  of  Mining  and  Metallurgical  Engineers;  (2)  American  Mining 
Congress;  (3)  Mining  and  Metallurgical  Society  of  America;  (4)  National 
Safety  Council;  and  (5)  U.  S.  Bureau  of  Mines. 

These  had  previously  named  the  following  as  their  representatives  on 
this  general  correlating  committee: 


THE  AMERICAN  MINING  CONGRESS  209 

(1)  Howard  N.  Evanson  and  Graham  Bright;  (2)  Charles  A.  Mitke  and 
Col.  Warren  R.  Roberts;  (3)  B.  B.  Gottsberger  and  E.  S.  Berry;  (40  .T.  S. 
Williams  and  F.  P.  Sinn;  and  (5)  O.  P.  Hood.  The  following  were  present 
in  person  or  by  alternatives:  (1)  P.  E.  Barbour;  (2)  Colonel  Roberts; 
(3)  B.  B.  Gottsberger;  (4)  F.  B.  Sinn;  and  (5)  O.  P.  Hood. 

The  Minutes  of  the  first  conference  of  this  general  correlating  com- 
mittee, as  hurriedly  prepared  by  the  secretary  of  the  American  Engineer- 
jag  Standards  Committee,  are  hereto  attached.  These  minutes  represent 
»UDStantially  the  work  accomplished  and  the  agreements  reached  at  this 
first  conference.  They  are  signed  by  Colonel  Roberts. 
Report  of  Correlating  Committee 

"The  minutes  of  this  conference  should  state  that  Mr.  A.  A.  Stevenson, 
chairman  of  the  American  Engineering  Standards  Committee,  and  Mr. 
P.  G.  Agnew,  secretary  of  this  Committee,  were  unanimously  selected  as 
temporary  chairman  and  temporary  secretary  for  this  first  conference  of 
this  General  Correlating  Committee,  it  being  the  sense  of  the  representa- 
tives present  that  the  permanent  chairman  and  secretary  should  not  be 
selected  until  the  next  conference  of  the  committee,  when  it  was  hoped  a 
fuller  representation  of  the  societies  would  be  present. 

It  should  be  noted  that  the  representatives  present  for  some  of  the 
societies  did  not  feel  disposed  at  this  first  conference  to  bind  their  socie- 
ties to  any  definite  program,  and  wished  to  refer  the  matters  back  to 
their  society  for  formal  approval.  However,  it  was  their  personal  judg- 
ment that  their  program  of  correlation,  as  tentatively  agreed  upon  at  this 
conference,  would  be  approved  by  their  societies. 

Colonel  Roberts,  representing  the  American  Mining  Congress,  advised 
that  it  was  very  important  that  some  such  general  program  for  correlating 
the  standardization  work,  which  was  being  carried  on  by  the  various 
organizations  and  societies  named  above,  or  which  they  might  wish  to 
enter  upon,  should  be  agreed  to  at  this  conference,  for  the  reason  that 
the  American  Mining  Congress  would  expect  its  representative  at  this 
conference  to  report  at  the  first  National  Standardization  Conference,  to 
be  held  in  Denver,  November  15  to  19,  inclusive,  whether  any  such  pro- 
gram had  been  agreed  upon,  and  if  so,  the  substance  of  such  program.  It 
was  for  this  reason  that  the  temporary  chairman  of  the  meeting  urged 
upon  the  representatives  of  the  various  societies  that  they  reach,  at  least, 
some  tentative  agreement,  which  was  done  as  outlined  in  the  minutes  of 
the  meeting  above  referred  to. 

Your  representative  at  this  conference  advised  the  representatives  of 
th  other  societies  present,  that  the  general  correlating  program,  as  ten- 
tatively agreed  upon,  met  with  his  personal  approval,  and  that  he  would 
so  report  at  the  first  National  Standardization  Conference  of  the  American 
Mining  Congress  and  recommend  the  acceptance  of  such  program  by  our 
Congress. 

All  Organizations  to  Outline  Their  Activities 

As  indicated  in  the  first  paragraph  on  the  last  page  of  the  minutes  of 
this  conference,  the  representative  of  each  organization  present  agreed  to 
prepare  a  brief  outline  of  the  activities  of  this  organization  on  standard- 


210  REPORT  OF  PROCEEDINGS 

ization  work  as  applied  to  the  mining  industry.  Such  presentation  of  the 
work  ot  our  Mining  Congress  on  standardization  can  better  be  prepared 
at  a  date  after  our  National  Convention. 

The  conference  adjourned  subject  to  call  of  the  chairman  or  secretary 
of  the  American  Engineering  Standard  Committee.  It  was,  however,  ten- 
tatively agreed  to  by  the  representatives  present  that  the  next  conference 
should  be  held  in  New  York  City  about  the  middle  of  December  (1920), 
at  some  date  to  be  mutually  agreed  upon  by  the  representatives  of  the 
various  organizations.  At  this  next  conference  it  was  expected  to  com- 
plete the  organization  of  this  general  correlating  committee  by  selecting 
a  permanent  chairman  and  secretary;  and  it  is  also  hoped  that  at  this 
next  conference  the  representatives  of  the  various  organizations  will  havtf 
secured  the  approval  of  their  respective  societies  to  the  tentative  pro- 
gram as  outlined  above  in  this  report,  which  will  enable  this  committee 
then  to  prepare  a  definite  program  for  correlating  the  standardization 
work  of  all  these  organizations  and  societies." 

MR.  GEORGE  K.  BURGESS:  Speaking  as  a  member  of  the  American 
Engineering  Standards  Committee,  I  might  say  that  I  was  sorry  not  to 
be  able  to  be  at  that  meeting  of  November  11,  but  in  general  I  think 
that  the  long  view  ahead,  as  mentioned  in  Col.  Roberts'  report,  was  of  great 
importance.  The  program  as  outlined  by  your  chairman  earlier  in  the 
meeting  is  all  right — there  is  no  question  about  standardization  being 
good — but  the  function  of  the  American  Engineering  Standards  Committee 
is  not  to  make  standards;  the  function  of  that  committee  is  to  supervise 
the  methods,  the  fundamental  idea  being  that  all  interests  concerned  in 
any  given  standardization  project  or  industry,  will  be  representative. 

Interlocking  of  Organizations 

That,  however,  does  not  prevent — on  the  contrary  it  leads  to  the  encour- 
agement of  active  work  on  any  particular  unit  representing  either  a  large 
portion  or  any  portion  of  the  industry  in  question.  In  the  mining  industry 
there  are  several  bodies  interested  directly — some  of  them  indirectly, — 
in  standardization  methods.  Therefore,  before  a  standard  is  promulgated 
as  an  American  standard, — that  is,  representing  decisions  which  are  sub- 
scribed to  by  the  whole  country — some  process  as  indicated  in  Col. 
Roberts'  report  of  the  November  11  meeting,  is  inevitable,  namely,  that 
we  must  not  only  get  together  in  this  organization,  but  you  are  to  join 
with  other  similar  organizations  working  on  the  same  problem.  Therefore, 
the  proper  way  to  organize  this  standardization  work  is  to  go  ahead  with 
your  own  committees,  at  the  same  time  tying  up  with  other  organizations. 
I  think  if  that  policy  is  adopted,  it  will  lead  to  greater,  more  definite,  and 
efficient  progress  than  by  any  other  procedure. 

MR.  N.  S.  GRENSFELDER:  Has  ,it  been  decided  definitely  about  that 
meeting  in  New  York  mentioned  in  Col.  Roberts'  report? 

MR.  MITKE:     It  is  to  be  some  time  in  December,  1920. 


THE  AMERICAN  MINING  CONGRESS  211 

MR.  A.  C.  MORRISON:  Is  tkcre  any  objection  to  reading  the  tentative 
agreement,  or  is  that  to  be  postponed  until  some  other  meeting?  Mr. 
Roberts  refers  constantly  to  a  tentative  agreement  which  had  been 
reached,  and  he  recommends  its  adoption,  but  the  agreement  is  not  before 
the  meeting. 

MR.  MITKE:  I  have  not  read  it  yet  as  it  has  just  been  received,  but 
will  now  do  so.  It  is  signed  by  the  secretary,  P.  G.  Agnew. 

"The  meeting  was  called  to  order  by  Mr.  A.  A.  Stevenson,  Chairman  of 
the  American  Engineering  Standards  Committee,  at  2:30  p.  m. 

Those  present  were  Percy  E.  Barbour,  representing  the  American  Insti- 
tute of  Mining  and  Metallurgical  Engineers;  Warren  R.  Roberts,  the 
Mining  and  Metallurgical  Society  of  America;  F.  P.  Sinn,  the  National 
Safety  Council;  O.  P.  Hood,  the  U.  S.  Bureau  of  Mines;  A.  A.  Stevenson, 
chairman,  American  Engineering  Standards  Committee,  and  P.  G.  Agnew, 
secretary,  American  Engineering  Standards  Committee. 

It  was  announced  that  the  following  gentlemen  who  have  been  desig- 
nated as  members  of  the  Committee,  representing  their  respective  organ- 
izations, were  unable  to  meet  with  the  conference.  They  included  Messrs. 
Evanson,  Bright,  Mitke,  Berry,  and  Holbrook,  and  others. 

In  view  of  the  absence  of  several  members  of  the  Committee,  it  was 
decided  not  to  proceed  with  the  election  of  a  permanent  chairman,  and 
upon  motion  by  Col.  Roberts  it  was  voted  that  Mr.  Stevenson  be  requested 
to  act  as  temporary  chairman.  Mr.  Stevenson  consented  to  serve.  The 
Secretary  of  the  American  Engineering  Standards  Committee  was  re- 
quested to  serve  as  secretary  of  the  meeting. 

The  Mining  Congress  and  Standardization 

Methods  of  co-operation.  Col.  Roberts  briefly  outlined  the  work  of  the 
American  Mining  Congress.  The  Congress  was  to  hold  its  annual  Con- 
vention in  Denver  the  following  week,  and  one  of  the  principal  features 
of  the  Convention  would  be  a  general  conference  on  standardization  in 
the  mining  industry.  It  was  very  desirable  that  some  agreement  be 
reached  as  to  the  general  method  of  co-operation,  and  to  be  followed  in 
correlating  the  standardization  work  of  the  various  organizations,  in  order 
that  the  work  might  be  finally  approved  by  the  American  Engineering 
Standards  Committee.  The  Standardization  Conference  in  Denver  should 
be  apprised  of  the  methods  to  be  followed. 

Mr.  Hood  briefly  outlined  some  of  the  standardization  activities  of  the 
Bureau  of  Mines,  and  pointed  out,  by  use  of  illustrations,  the  importance 
of  clearly  defining  the  relation  of  each  of  the  co-operating  organizations 
to  the  American  Engineering  Standards  Committee. 

In  the  frank  and  rather  full  discussion  which  followed,  it  was  recognized 
that  the  main  function  of  the  present  Committee  would  be  to  work  out 
the  methods  of  correlating  the  standardization  activities  of  the  various 
organizations  concerned,  in  order  that  specific  parts  of  the  work  should 
receive  final  approval  of  the  American  Engineering  Standards  Committee 
after  clearing  through  the  mechanism  of  co-operation  to  be  agreed  upon. 


212  REPORT  OF  PROCEEDINGS 

It  would  be  first  of  all  necessary  to  work  out  a  general  policy  and  plan 
to  be  followed  in  the  work.  The  Committee  would  then  have  to  apply 
this  plan  to  specific  projects,  acting  as  technical  advisor  to  the  American 

General  Plan 

Engineering  Standards  Committee  in  the  mining  field.  It  was  recognized 
that  in  the  application  of  the  general  plan  there  would  be  involved  such 
work  as: 

(1)  Delimiting  specific  projects  which  might  be  most  advantageously 
handled  as  units. 

(2)  Recommending  the  order  in  which  the  various  projects  should  be 
taken  up  in  view  of  the  needs  of  the  industry. 

(3)  Make  recommendations  as  to  what  bodies  should  act  as  sponsors 
for  specific  projects,  and  as  to  what  bodies  should  be  represented  upon 
sectional  committees. 

It  was  agreed  that  the  members  should  recommend  to  their  respective 
organizations  the  following  as  a  general  plan  for  co-ordinating  the  present 
standardization  activities  of  the  different  bodies  and  placing  the  work 
under  the  rules  of  procedure  of  the  American  Engineering  Standards 
Committee. 

(a)  If  an  organization  has  a  standardization  project  practically  com- 
pleted or  well  under  way,  the  organization  should  be  recommended  as 
sponsor   (either  as  sole  sponsor  or  as  joint  sponsor,  with  another  organ- 
ization, according  to  circumstances). 

(b)  If  the  organization  has  a  committee  organized  and  working  on  the 
subject,  the  make-up  and  representative  character  of  the  committee  in 
sponsor  (either  as  sole  sponsor  or  as  joint  sponsor,  with  another  organ- 
adequately  representative,  it  could  become  the  sectional  committee. 

If  found  not  to  be  completely  representative,  the  committee  in  question, 
or  a  portion  of  it,  could  serve  as  the  nucleus  of  a  more  broadly  represen- 
tative sectional  committee. 

It  was  felt  that  this  sectional  plan  would  fit  in  with  the  procedure 
established  by  the  American  Engineering  Standards  Committee,  and  would 
not  interfere  with  the  progress  of  the  work  now  in  hand. 

Relation  to  Safety  Code  Program:  The  relation  of  the  work  to  that  of 
the  National  Safety  Code  Committee  was  briefly  discussed.  It  was  voted 
that  the  Secretary  be  instructed  to  write  to  the  National  Safety  Code 
Committee,  informing  them  of  the  organization  of  the  General  Correlating 
Committee,  and  apprising  them  of  the  desire  of  the  'General  Committee 
to  co-operate  with  the  National  Safety  Code  Committee. 

The  Safety  Code  Program 

It  was  further  voted  that  the  Secretary  be  instructed  to  prepare  a  brief 
outline  of  the  history  of  the  Safety  Code  Program,  and  of  the  work  of  the 
National  Safety  Code  Committee,  and  circulate  it  to  the  members  of  the 
General  Committee. 


THE  AMERICAN  MINING  CONGRESS  213 

information  on  standardization  activities  of  the  organizations.  It  was 
agreed  that  each  member  present  should  prepare  a  brief  outline  of  the 
activities  of  the  Organization  which  he  represents,  which  bears  on  mining 
standardization,  and  forward  it  to  the  Secretary  who  would  circulate  the 
information  to  the  members. 

Circulation  of  minutes.  It  was  voted  that  copies  of  the  minutes  should 
be  sent  to  the  Secretaries  of  the  five  organizations,  in  order  that  each 
organization  might  have  in  its  central  office  a  file  for  the  information  of 
its  members. 

The  meeting  adjourned  at  five  o'clock  p.  m.,  subject  to  the  call  of  the 
chair. 

Mr.  Mitke:  In  this  connection  I  would  like  to  say  that  in  arranging 
the  general  program  of  the  Metal  Section,  we  have  endeavored  to  make 
the  adoption  of  standards  just  as  difficult  as  possible,  in  order  to  prevent 
any  one  man's  ideas  being  forced  upon  the  mining  industry,  unless  it  has 
first  withstood  the  criticism  of  the  majority.  This  measure  has  been 
adopted  as  a  safeguard,  and  for  the  protection  of  both  the  manufacturers 
and  the  mining  industry  at  large. 

The  meeting  then  adjourned  until  the  following  day. 


214  REPORT  OF  PROCEEDINGS 

NATIONAL  STANDARDIZATION  CONFERENCE 

The  American  Mining  Congress 
WEDNESDAY  MORNING,  NOVEMBER  17,  1920 

Chas.  A.  Mitke,  chairman  of  the  Metal  Section  of  the  Standardization 
Committee,  presided. 

CHAIRMAN  MITKE:  The  First  National  Standardization  Conference 
will  please  come  to  order. 

In  the  absence  of  Mr.  Scholz,  who  is  unfortunately  unable  to  attend,  I 
will  open  the  meeting  by  reading  a  paper  -on  'The  Relation  of  Standard- 
ization to  Mine  Management.' 

[Mr.  Mitke's  paper  appears  on  page  772  of  the  Proceedings.] 

MR.  MITKE:  We  are  very  fortunate  in  having  with  us  Mr.  P.  G. 
Agnew,  a  man  who  is  interested  in  the  working  out  of  national  standards. 

[Mr.  Agnew's  paper  appears  on  page  211  of  the  Proceedings.] 
Address  by  Colonel  Roberts 

Next  follows  the  address  'Standardization  and  Efficiency'  prepared  by 
Col.  Warren  R.  Roberts: 

When  the  founders  of  the  American  Mining  Congress,  in  keeping  with 
custom,  selected  a  motto,  they  chose  one  that  would  indicate  to  the  public 
the  purpose  for  which  this  Congress  was  organized,  and  also  the  ideals 
toward  which  it  would  strive.  No  other  words  could  better  have  expressed 
these  objects  than  "Safety,  Efficiency,  and  Conservation." 

SAFETY  has  been  one  of  the  watchwords  of  our  Congress  from  the 
beginning.  Not  only  have  the  officials  of  our  Congress  improved  every 
opportunity  to  promote  safety  as  applied  to  the  mining  industry,  but  they 
have  been  among  the  first  to  conceive  ways  in  which  improved  and  safer 
methods  and  practices  could  be  brought  before  the  mining  industry. 

In  confirmation  of  the  above  statement,  we  remember  that  when  the 
U.  S.  Bureau  of  Mines  was  in  process  of  formation  by  its  Director,  he 
had  no  more  ardent  supporter  and  efficient  adviser  than  our  honored 
secretary,  Mr.  James  F.  Callbreath,  who  has  since,  together  with  his 
other  officials,  always  extended  a  helping  hand  to  the  Bureau.  Those  of 
us  who  are  familiar  with  the  work  of  this  Bureau,  know  that  it  has  been 
the  greatest  agency  in  the  land  for  the  promotion  of  safety  in  the  mining 
industry. 

Our  Congress  has  also  co-operated  at  all  times  with  all  other  agencies 
promoting  safety  as  applied  to  mining,  and  at  the  present  time  working 


THE  AMERICAN  MINING  CONGRESS  215 

together  with  the  National  Safety  Council  and  similar  organizations  so 
far  as  their  efforts  are  directed  toward  the  mining  industry. 

EFFICIENCY,  the  much  abused  and  often  misapplied  expression,  has 
never  been  misunderstood  by  the  officials  of  our  Congress.  If  we  would  • 
gain  the  confidence  of  others,  and  thereby  secure  influence  with  them, 
we  must  first  be  able  to  show  that  we  have  applied  intelligently  to  our 
own  affairs  the  advice  we  offer  them.  The  conduct  of  our  work  through 
our  own  efficient  organization  has  always  been  an  example  of  efficiency 
to  the  mining  industry.  In  the  years  that  I  have  been  connected  with  this 
organization,  many  times  I  have  heard  prominent  men  in  the  mining  indus- 
try make  the  above  statement.  Due  to  this  fact  our  Congress  has  had 
much  influence  with  the  mining  industry  in  promoting  efficiency  added 
to  safety. 

CONSERVATION  is  a  most  popular  expression  with  those  who  seek  to 
gain  public  influence.  We  talk  flippantly  of  the  conservation  of  our 
national  resources,  while  we  continue  to  waste  them.  It  is  an  acknowl- 
edged fact  that  the  American  people  is  the  most  extravagant  and  wasteful 
nation  on  earth.  Such  extravagance  is  not  applied  only  to  their  personal 
resources,  but  to  those  of  their  cities,  their  states,  and  their  nation.  We 
were  so  greatly  blessed  with  the  great  natural  resources  of  our  broad 
acres  of  fertile  land,  with  our  limitless  forests  and  our  unbounded  mineral 
possessions,  that  we  have  for  generations  gone  on  exploiting  these 
resources  in  the  way  that  were  bringing  us  the  most  immediate  results 
with  very  little  thought  of  conserving  those  wonderful  possessions. 

But  as  our  lands  were  gradually  occupied,  and  as  our  forests  dis- 
appeared, and  the  richer  of  our  mineral  resources  were  exhausted,  we 
began  to  take  account  of  our  wastefulness.  The  wiser  and  more  patriotic 
of  our  citizens  began  to  plead  for  conservation  of  these  great  resources 
and  then  I  say,  this  word  became  very  popular  with  many  persons  who 
are  always  ready  and  waiting  to  ride  into  public  favor  on  the  crest  of 
some  friendly  wave.  Such  use  of  any  national  movement  like  conserva- 
tion naturally  creates  much  prejudice  with  our  people,  and  this  must  be 
overcome  by  the  industrious  and  wise  efforts  of  those  who  are  seeking 
to  promote  real  conservation.  Our  Mining  Congress  has  been  diligent  in 
its  efforts  to  conserve  the  energies,  the  capital  and  the  resources  of 
the  mining  industry,  thereby  living  up  to  its  motto  of  "Safety,  Efliciency, 
and  Conservation." 

Standardization  an  Economy 

When  this  excellent  motto  was  adopted  by  the  founders  of  our  Con- 
gress, they  were  not  familiar  with  another  great  force  in  national  econ- 
omy. This  other  important  factor  was  not  then  generally  recognized, 
even  by  the  engineering  profession,  which  is  always  among  the  first  to 
point  the  way  in  all  matters  pertaining  to  safety,  efficiency,  and  conserva- 
tion. There  were  those,  however,  in  this  profession  who  did  have  the 
vision  to  recognize  that  standardization  of  methods  as  applied  to  produc- 
tion, whether  it  be  applied  to  mining,  manufacturing,  or  otherwise,  was 


21(?  REPORT  OF  PROCEEDINGS 

the  real  basis  upon  which  should  be  built  up  the  three  structures  of 
safety,  efficiency,  and  conservation.  Those  of  us  who  are  familiar  with 
this  movement,  which  has  now  reached  national  proportions,  even  inter- 
national scope,  can  verify  the  above  statements.  However,  while  the 
foundations  for  this  new  movement  have  been  intelligently  laid,  no  mate- 
rial progress  had  been  made  up  to  the  time  when  our  Nation  was  rudely 
awakened  from  the  complaisant  tenor  of  its  ways  of  peace,  and  found  it 
necessary  immediately  to  reorganize  our  entire  national  life  to  enable  us 
to  meet  this  great  crisis  which  was  endangering  our  very  existence.  It 
took  even  such  a  crisis  as  this  to  awaken  the  American  people  to  a 
realization  of  our  resources  and  of  our  capacity  as  a  Nation,  but  we  did 
find  ourselves,  so  to  speak,  and  we  were  a  surprise  to  all  the  nations  of 
the  earth  as  well  as  to  ourselves. 

We  were  proud  then,  and  we  are  now,  to  recount  the  inventions,  the 
creations,  and  the  accomplishments  of  our  people  when  as  a  united  force 
they  went  about  this  great  task. 

But  the  bulwark  of  our  strength  at  that  time  was  the  almost  unlimited 
capacity  of  our  engineers,  scientists,  and  professional  men  generally,  to 
meet  this  great  emergency  by  inventing  new  things  and  new  methods, 
and  applying  other  things  in  more  scientific  and  practical  ways  and  other- 
wise helping  them  to  organize  our  resources  on  the  most  productive  and 
economical  basis. 

Concentration  During  War  Years 

When  the  call  came  for  more  ships,  and  when  these  could  not  be  built 
fast  enough  to  meet  the  ever-increasing  demand  for  our  shipments  to 
Europe,  a  way  must  be  found  to  make  the  vessels  we  had  carry  greater 
cargoes.  Then  again,  our  scientists  and  engineers  were  called  upon  to 
meet  this  new  demand.  We  must  find  a  way  they  told  us,  to  concentrate 
and  condense  our  cargoes.  This  demand  was  met  by  putting  into  prac- 
tice the  theories  of  those  who  had  advocated  standardization  of  packing, 
boxing  and  baling  of  all  products  for  transportation,  either  by  land  or 
sea.  We  cannot  go  into  detail  at  this  time  as  to  how  this  was  accomp- 
lished, but  can  only  state  that  a  surprising  increase  in  shipments  was 
readily  made  by  applying  methods  of  standardization  as  above  outlined. 

Another  call  was  for  increased  production  from  our  factories  for  every 
article  needed  to  carry  on  the  war.  Again,  standardization  of  methods 
and  of  equipment  very  greatly  facilitated,  not  only  production  but  again 
transportation  of  the  articles  thus  produced.  We  could  go  on  multiplying 
examples  to  illustrate  how  standardization  made  for  efficiency  in  every 
department  of  production  and  transportation  during  the  period  of  the 
war,  but  this  brief  statement  will  suffice  to  indicate  to  you  that  any 
agency  which  was  the  basis  of  the  greatest  economics  that  we  wrought 
during  this  period,  must  have  value  which  should  be  applied  to  the  same 
industries  and  to  others  in  times  of  peace. 

We  have  not  forgotten  the  lessons  we  learned  during  the  strenuous 
time  of  the  war  when  necessity  drove  us  to  acomplishment.  We  have, 
therefore,  been  diligent  in  trying  to  apply  to  our  industries  as  now  re- 


THE  AMERICAN  MINING  CONGRESS  217 

inized,  the  benefits  to  be  derived  from  standardization  in  methods  of 
production  and  of  manufacture. 

The  American  Mining  Congress  immediately  after  the  war  undertook 
to  organize  a  division  to  promote  standardization  of  mining  methods,  min- 
ing equipment,  etc.,  for  this  industry. 

Result  of  Conferences  on  Standardization 

This  work  soon  gained  such  prominence  that  other  national  organiza- 
tions interested  in  the  mining  industry,  and  more  particularly  in  this 
movement  of  standardization,  suggested  that  a  conference  be  held  with 
the  object  of  co-ordinating  the  work  of  these  various  national  societies 
and  organizations.  These  conferences  have  all  borne  fruit,  and  this  work 
of  co-ordination  has  already  been  accomplished  through  an  organization 
set  up  especially  for  this  purpose,  namely,  the  American  Engineering 
Standards  Committee. 

The  way  has,  therefore,  been  opened,  the  trails  blazed  and  it  only  re- 
mains for  those  who  are  promoting  this  important  work  to  carry  it  for- 
ward to  consummation,  thereby  bringing  to  the  mining  industry  through 
standardization,  Safety,  Efficiency,  and  Conservation. 

May  we  not  hope  also,  that  progressive  men  in  other  industries,  seeing 
the  economies  we  shall  work  through  standardization,  for  the  mining 
industry,  will  be  encouraged  to  'Go  thou  and  do  likewise.'  " 

MR.  MITKE:  Mr.  T.  T.  Brewster  will  speak  to  us  on  'Standard  Mine 
Accounting.' 

[Mr.  Brewster's  paper  will  be  found  on  page  818  of  the  Proceedings.] 

MR.  MITKE:  Mr.  Brewster  has  given  us  an  interesting  talk,  ana 
those  of  you  who  are  interested  in  this  subject  can  obtain  copies  of  the 
report;  also  copies  of  the  paper  Mr.  Agnew  brought  for  distribution. 

We  have  with  us  Mr.  James  Milliken,  president  of  the  Industrial  Car 
Manufacturing  Institute  of  Pittsburgh. 

In  presenting  the  attached  report  Mr.  Milliken  made  the  following 
explanatory  remarks: 

Gentlemen,  this  report  is  not  nearly  as  formidable  as  it  looks.  The 
time  for  adjournment  is  about  here,  and  I  am  not  going  to  detain  you 
very  long.  I  did  write  a  short  address  and  I  will  turn  it  over  to  the 
Secretary  and  you  can  read  it  in  the  Proceedings. 

I  want  to  compliment  you  on  what  has  been  done  this  year  in  the 
matter  of  standards.  It  represents  a  good  piece  of  work,  and  I  would 
like  to  emphasize  first  a  few  remarks  that  I  made  yesterday  to  the  Coal 
Mining  Section,  because  I  think  it  applies  to  all  standardization  work. 

Standards  in  Railroads 

First  is  your  method  of  procedure — the  correlation  of  your  committees. 
It  is  one  thing  to  prepare  standards,  and  another  to  get  your  members  to 
adopt  them  entirely.  You  can  make  all  the  standards  you  want,  and 
unless  your  members  will  actually  agree  to  use  them,  you  might  as  well 


218  REPORT  OF  PROCEEDINGS     . 

not  have  any  standards.  My  experience  has  covered  a  good  many  years 
in  railroad  service,  and  you  probably  all  know  that  the  railroads,  in  their 
car  construction,  have  done  a  great  deal  in  the  way  of  making  standards. 
Although  they  started  in  1872,  the  full  standard  car  is  not  yet  being  built. 
However,  the  parts  of  cars  that  wear  out  are  standardized  and  are  inter- 
changeable, so  that  if  a  Pennsylvania  car  in  the  East  wears  out  a  wheel, 
or  something  of  that  kind,  either  here  or  in  San  Francisco,  the  repair 
man  there  puts  on  a  piece  from  his  own  stock.  In  that  way,  the  cost  of 
repairs  has  been  materially  reduced. 

I  would  like  to  suggest  that  instead  of  making  standards  as  you  start 
out,  you  make  recommended  practice.  I  think  you  will  find  it  will  be 
accepted  by  your  members  much  more  readily  than  if  you  tried  to  force 
a  standard  onto  them.  I  think  the  best  way  to  accomplish  that  is  to 
submit  all  suggestions  to  members  individually  in  the  way  of  a  recom- 
mendation; then  you  will  ascertain  completely  whether  your  recom- 
mended practices  will  be  suitable,  and  after  such  practices  have  been  in 
use  for  a  few  months,  or  a  year  or  two,  they  can  readily  be  advanced  to 
standards. 

The  Committee  that  I  am  connected  with,  known  as  the  Industrial 
Manufacturers  Institute,  is  trying  to  standardize  industrial  equipment. 
Outside  of  a  standard  coach  for  railroads,  there  are  really  no  standards. 
We  have  been  in  operation  about  1^  years,  and  have  adopted  a  large 
number  of  recommended-  practices,  the  items  that  you  are  particularly 
interested  in  being  mine-cars.  We  have  adopted  recommended  practices, 
covering  all  kinds  of  materials  used,  such  as  bolts  and  nuts,  castings  for 
malleable  iron,  gray  iron  and  steel,  general  pipe-unions,  welded  pipe, 
rivets,  screw-threads,  structural  steel,  and  so  forth. 

Variety  in  Mine- Cars 

It  is  really  remarkable  how  few  standards  there  are  in  the  building  of 
mine-cars.  This  Commission  that  I  am  connected  with  can  do  a  good 
many  things,  but  we  canont  do  it  all.  It  is  up  to  you  gentlemen  to  estab- 
lish standards,  and  then  the  car  manufacturers  will  be  only  too  glad  to 
build  what  you  want.  But  they  do  not  want  to  have  to  build  a  different 
type  of  car  for  every  mine,  and  there  certainly  is  not  any  occasion 
for  that. 

At  the  present  time  we  are  trying  to  standardize  treads  and  flanges  of 
wheels.  Your  present  flanges  and  treads  of  wheels  shows  a  wide  range, 
resulting  in  a  tremendous  amount  of  waste  material.  There  is  certainly 
one  correct  tread  and  flange  for  an  18-in.  wheel,  and  there  is  one  correct 
weight  for  your  different  capacity  cars.  If  you  adopt  one  standard  flange 
and  one  weight  for  capacity,  if  you  will  get  the  best  engineering  talent, 
if  you  will  get  the  best  designed  wheel,  you  will  not  be  carrying  around 
excess  weight,  neither  will  you  have  a  wheel  that  is  too  light  for  the 
service. 

The  same  thing  applies  to  practically  all  the  details  of  cars.  I  am  not 
going  to  mention  them  all,  but  I  would  like  to  mention  Turner  bearings. 
You  have  five  or  six  different  capacities,  from  one  to  five  tons — a  few  half 


THE  AMERICAN  MINING  CONGRESS  219 

tons.  The  majority  of  them  have  roller  bearings  that  are  rather  expen- 
sive to  make.  There  are  some  18  or  20  different  sized  Turners  for  those 
four  or  five  capacity  cars.  Some  of  them  are  l^e  in-»  and  another  is  2 
in.,  and  another  is  2^6  in. 

It  costs  money  to  have  three  size  of  roller  bearings  made,  where  one 
size  can  be  made  in  three  times  the  quantity,  and  for  that  reason  you  will 
get  them  for  considerably  less  price.  There  are  really  many  advantages 
in  standardization,  and  I  want  to  assure  you  that  the  Industrial  Car 
Manufacturers  Institute  is  only  too  willing  to  co-operate  with  you,  with 
your  operators,  mine  superintendents,  and  with  your  engineers,  and 
wherever  we  can  be  of  service,  we  will  only  be  too  glad  to  do  it. 

The  meeting  then  adjourned  until  the  following  morning. 


THURSDAY  MORNING,  NOVEMBER  18,  1920 

Carl  Scholz,  Acting-Chairman  of  the  Coal  Section,  and  Chas.  A.  Mitke, 
Chairman  of  the  Metal  Section,  presided. 

CHAIRMAN  MITKE:  This  is  a  continuation  of  yesterday's  meeting, 
and  is  the  final  meeting  of  the  Standardization  Conference.  The  first 
speaker  is  Mr.  G.  K.  Burgess,  a  representative  of  the  U.  S.  Bureau  of 
Standards,  a  man  whom  you  have  heard  before,  and  who  will  give  us  an 
intelligent  view  of  the  work  of  the  Bureau. 

[Mr.  Burgess'  paper  appears  on  page  794  of  the  Proceedings.] 

MR.  SCHOLZ:  I  have  been  requested  by  Mr.  Mitke'  to  read  the  follow- 
ing resolution,  which  will  be  passed  without  discussion  to  the  Resolu- 
tions Committee: 

"WHEREAS,  it  is  desirable  that  standardization  in  the  mining  in- 
dustry be  carried  out  on  a  national  scale,  in  so  far  as  it  is  possible 
to  do  so;  and 

"WHEREAS,  it  is  the  desire  of  the  American  Mining  Congress  to 
co-operate  in  the  fullest  measure  with  other  bodies  working  to  the 
same  end;  be  it 

"Resolved,  That  steps  be  taken,  under  such  arrangements  as  may 
be  mutually  agreed  upon  by  the  bodies  interested,  through  the  Gen- 
eral Correlating  Committee  for  Mining  Standardization,  upon  which 
the  Congress  is  represented,  to  assure  that  the  working  standardiza- 
tion committees  may  be  recognized  as  sectional  committees  of  the 
American  Engineering  Standards  Committee,  in  order  that  the  stand- 
ards prepared  may  receive  final  approval  as  American  Engineering 
Standards." 

Reports  of  All  Committees  to  be  Correlated 

I  might  add  that  arrangements  have  already  been  made  by  the  Ameri- 
can Mining  Congress  to  have  a  permanent  secretary  stationed  at  Wash- 


220  REPORT  OF  PROCEEDINGS 

ington,  who  will  correlate  the  reports  of  the  various  committees.  As  act- 
ing-chairman of  the  Coal  Section,  I  would  like  to  say,  for  the  benefit  of 
the  Metal  Section,  that  the  Coal  Section  meetings  created  a  great  deal  of 
outside  interest,  so  much  so  that  one  meeting  extended  over  3%  hours, 
and  it  was  hardly  completed  then.  A  number  of  the  Committees  that  had 
submitted  reports  were  so  impressed  with  the  work  which  had  been  done, 
and  with  the  work  to  be  done,  that  they  asked  that  their  reports  be  re- 
turned so  as  to  be  revised  and  put  into  new  form.  Perhaps  a  number  of 
our  Committees  were  not  quite  aware  of  the  final  matters  to  be  accom- 
plished and  we  discovered  that  in  many  cases  practices  were  referred  to 
rather  than  equipment;  and  it  may  be  necessary  to  augment  that  Com- 
mittee by  a  committee  on  practices,  rather  than  on  equipment  as  we  now 
have.  We  are  much  gratified  with  the  interest  that  has  been  developed, 
and  we  hope  that  we  will  be  able  to  do  a  great  deal  of  good  for  the  pro- 
fession as  well  as  for  the  manufacturers  interested. 

MR.  MITKE:  Right  in  line  with  what  Mr.  Scholz  has  said,  I  have  an 
announcement  to  make: 

As  you  are  aware,  the  standardization  of  mining  equipment  is  closely 
allied  with  the  standardization  of  operations,  and  it  is  most  difficult  to 
standardize  on  one  branch  without  standardizing  the  other.  It  has, 
therefore,  been  decided  by  the  American  Mining  Congress,  to  enlarge  the 
scope  of  all  the  working  committees  of  both  the  Coal  and  Metal  Sections 
to  cover  operations  as  well  as  equipment. 

Mr.  T.  O.  McGrath,  auditor  for  the  Shattuck-Arizona  Copper  Co.  of 
Bisbee,  will  now  address  us  on  the  subject  of  'Standardization  of  Metal 
Mining  Accounting.' 

MR.  McGRATH:  I  would  like  to  say  that  this  is  nothing  more  than  a 
preliminary  presentation;  it  is  not  a  detailed  application  to  any  one  par- 
ticular instance,  it  is  a  general  discussion  preparatory  to  taking  up  the 
matter  in  detail. 

A  Regulation  Favorable  to  Mines  Not  Taken  Advantage  of 

When  I  was  at  the  Tax  Conference  here  the  other  day,  I  talked  to  one 
of  the  men  connected  with  the  Tax  Department,  and  I  was  much  sur- 
prised to  learn  that  one  of  the  most  important  provisions  in  the  last  regu- 
lations had  not  been  complied  with  or  had  not  been  taken  advantage  of, 
except  by  only  one  or  two  mining  companies  in  the  United  States,  so  I 
thought  I  would  mention  this  to  you,  because  the  last  regulations  make 
provision  whereby  these  companies  which  had  a  large  value  as  of  March, 
1912,  saved  themselves  thousands  of  dollars,  and  in  the  case  of  larger 
companies,  hundreds  of  thousands  of  dollars.  The  article  is  844  of  the 
Internal  Revenue  Department.  I  was  told  that  there  were  only  two  or 
three  companies  that  had  taken  advantage  of  it.  That  is  not  only  inter- 
esting of  this  year,  but  it  is  particularly  so  in  the  fact  that  the  Depart- 
ment has  not  finally  settled  any  of  the  tax  returns  since  1917;  in  other 
words,  your  tax  reports  for  1917,  1918,  and  1919  are  still  in  abeyance. 
As  I  say,  for  some  of  the  larger  companies  it  amounts  to  hundreds  of 


TIIK  AMERICAN  MIXING  CONGRESS  221 

thousands  of  dollars.    If  you  wish  later  on  to  have  me  explain  this  article, 
I  will  be  glad  to  do  it. 

[Mr.  McGrath's  paper  will  be  found  on  page  806  of  the  Proceedings.] 
MR.  HANSON  SMITH:      In  relation  to  Article  844— 

MR.  McGRATH:  It  would  only  take  a  minute  to  explain  it:  Article 
844  allows  you  to  depreciate  and  deplete  the  amount  of  your  capital 
charges,  not  only  in  the  amount  of  your  investment  in  capital  assets, 
but  up  to  the  amount  of  your  value  as  of  March  1,  1913;  they  allow  your 
asset  charges  or  capital  charges,  right  up  to  the  value  of  that  date,  which 
is  appreciation.  You  take  that  up  on  your  records.  Then  when  you 
deplete  those  asset  charges,  you  not  only  deplete  the  investment  charge, 
but  you  deplete  the  appreciation  value  that  they  allowed  to  you,  and 
set  it  up  here  as  depreciation  and  depletion.  Now,  when  you  do  that, 
Article  844  tells  you  that  if  you  will  divide  your  depletion  charge — if 
your  value  was  greater  than  the  investment,  and  also  your  depreciation 
charge,  if  you  wrote  it  up — if  you  divide  it  into  depletion  of  investment 
and  depletion  of  appreciation,  you  can  use  the  amount  of  realized  appre- 
ciation, for  invested  capital  in  making  your  return.  And  you  can  do 
that  since  March  1,  1913,  or  practically  seven  years.  And  in  the  case  of 
some  mines  where  they  had  a  very  large  appreciation  as  of  that  date, 
that  additional  invested  capital  will  amount  to  millions  of  dollars,  which 
you  will  be  allowed  to  use  in  figuring  up  your  excess  profits  tax,  and  in 
some  cases  that  will  amount  to  hundreds  of  thousands  of  dollars. 

MR.  MITKE:  Mr.  Lawrence  K.  Diffenderfer,  treasurer  of  the  Vanadium 
Corporation  of  America,  has  sent  an  interesting  paper  on  general  methods 
of  mine  accounting,  which  I  will  ask  Mr.  McGrath  to  present  in  Mr. 
Diffenderfer's  absence. 

MR.  McGRATH:  This  is  an  individual  presentation  o*f  the  applica- 
tion of  mining  principles  to  a  mine,  and  probably  will  be  very  interesting 
to  anyone  who  would  like  to  see  the  system  applied  in  an  individual 
case.  It  brings  up  two  good  points:  one  is  being  very  well  versed  in 
the  operations;  another,  equipment  records. 

Two  Papers  Presented 

[An  abstract  of  Mr.  Diffenderfer's  paper  appears  on  page  803  of  the 
Proceedings.  There  were  13  typical  forms  of  reports  (including  cash, 
timekeeper,  payroll,  storekeeper,  supplies,  purchasing,  depreciation,  and 
costs),  but  it  was  found  impracticable  to  reproduce  them.l 

[Mr.  Joseph  F.  Merrill,  Director  of  the  School  of  Mines  and  Engineer- 
ing, University  of  Utah,  representing  the  World  Metric  Standardization 
Council,  presented  a  paper  on  the  use  of  the  metric  system  in  place  of 
the  present  method  of  weights  and  measures.  The  organizing  members 
of  this  Council  are  the  Foreign  Trade  Club  of  San  Francisco,  American 
Metric  Association,  London  and  Manchester  Decimal  Association,  Ameri- 
can Chemical  Society,  and  American  Wholesale  Grocers'  Association. 


222  REPORT  OF  PROCEEDINGS 

There  are  on  file  in  Washington  100,000  petitions,  urging  gradual  adop- 
tion of  the  metric  system  in  America.  Of  58,226  petitions  received  under 
one  questionnaire,  there  were  only  426  opponents  to  the  suggestion.  The 
advocates  included  many  prominent  men,  in  science,  education,  and  com- 
merce. Mr.  Merrill  stated  that  its  advantages  were  simplicity,  economy, 
and  universality.  The  remainder  of  the  paper  consisted  of  quotations 
from  public  men  who  were  in  sympathy  with  the  movement.] 


THE  AMERICAN  MINING  CONGRESS  223 

COAL  MINING  SECTION,  STANDARDIZATION  COMMITTEE 

American  Mining  Congress 
NOVEMBER  16,  1920 

Mr.  Carl  Scholz,  Jr.,  presided. 

CHAIRMAN  SCHOLZ:  Gentlemen:  According  to  the  program, 
Colonel  Warren  R.  Roberts,  who  is  chairman  of  the  Coal  Section,  was  to 
preside  and  present  his  report,  but  unfortunately  he  could  not  attend,  so 
has  asked  me  to  present  his  report  and  act  in  his  stead.  The  report  is 
as  follows: 

Report  of  Colonel  Roberts 

The  Coal  Mining  Branch  of  your  Standardization  Division  of  the 
American  Mining  Congress  presents  the  following  report  as  representing 
the  progress  made  during  the  year  since  our  last  annual  Convention. 

This  report  is  rendered  by  the  General  Committee  directing  Standard- 
ization for  the  Coal  Mining  Branch,  and  on  behalf  of  the  seven  Sub-Com- 
mittees having  in  hand  the  work  of  improving  the  practice  and  standard- 
izing the  methods  and  equipment  for  the  coal-mining  industry. 

The  first  report  of  this  General  Committee  presented  at  our  last  annual 
Convention  indicates  that  this  work  was,  at  that  time,  only  fairly 
begun;  that  is  to  say,  the  General  Committee  and  the  various  Sub-Com- 
mittees had  been  organized  and  had  held  a  series  of  conferences  just 
prior  to  the  annual  Convention,  at  which  time  they  had  developed  and 
agreed  upon  a  general  program  of  standardization  to  be  applied  to  coal- 
mining practice,  equipment,  etc.  The  Conference  also  developed  ar- 
rangements whereby  the  work  to  be  performed  by  the  several  Sub- 
Committees  would  be  co-ordinated  through  the  General  Committee. 

A  comparison  of  the  report  rendered  by  your  General  Committee  a 
year  ago,  and  one  herewith  presented,  suggests  to  your  Chairman  im- 
pressive facts,  which  he  should  call  to  your  attention  before  entering 
into  the  more  detailed  subjects  contained  in  our  report. 

We  are  impressed  first,  with  the  wisdom  shown  by  your  Committee 
in  those  first  conferences,  when  the  whole  broad  subject  of  standardiza- 
tion was  discussed  and  conclusions  reached  covering  the  general  scope 
which  this  work  should  assume,  as  well  as  the  limitations  that  should 
best  be  applied  to  give  the  final  results  which  would  commend  them  to 
the  industry,  and  thereby  secure  their  adoption  in  general  practice. 

Good   Work   Accomplished 

The  several  reports  presented  by  the  Sub-Committees  which  are 
attached  to  and  form  a  part  of  this  brief  report  of  your  General  Commit- 
tee, deserve  special  mention.  Even  a  careful  study  of  the  reports  of 


224  REPORT  OF  PROCEEDINGS 

these  Sub-Committees  would  not  indicate  to  you  the  vast  amount  of 
earnest  discussion  and  careful  consideration  which  has  been  required  of 
the  members  of  the  Sub-Committees  to  reach  the  conclusions  contained  in 
their  condensed  reports.  Your  General  Committee,  therefore,  wishes 
to  commend  to  you  the  excellent  work  that  has  been  done  by  all  of  these 
Committees  with  the  exception  of  two,  and  for  whom  extenuating  cir- 
cumstances seem  to  offer  ample  excuse. 

Our  members  generally,  not  being  familiar  with  the  work  of  our 
Standardization  Division,  it  may  be  well  to  outline  briefly  the  organiza- 
tion which  is  carrying  on  this  important  work  on  behalf  of  the  mining 
industry.  This  Division  is  composed  of  two  branches  representing  Metal 
Mining,  and  Coal  Mining.  The  work  of  each  of  these  branches  is  directed 
by  a  General  Committee,  composed  of  the  Chairman  of  each  of  the  Sub- 
Committees  having  direct  charge  of  the  Standardization  of  practice  and 
equipment  in  their  respective  classifications  of  the  work.  The  purpose 
of  the  General  Committees  is  to  review  and  co-ordinate  the  work  of  the 
several  sub-committees. 

The  Chairmen  of  the  two  General  Committees  assist  in  organizing  and 
directing  the  work  for  their  respective  branches  and  finally  co-ordinate 
the  work  of  the  two  Branches. 

Standardization  Attracts  Attention 

This  work  of  Standardization,  as  carried  on  by  the  Mining  Congress 
during  the  past  two  years,  has  attracted  much  attention  from  other 
national  organizations  and  societies  interested  in  the  mining  industry. 
Certain  of  these  national  organizations  are  interested  in  this  work  of 
Standardization,  and  in  the  campaign  of  safety  as  applied  to  the  indus- 
try. This  community  of  interest  resulted  in  the  calling  of  a  conference 
of  representatives  of  these  various  national  organizations  and  societies, 
which  formulated  a  program  for  co-ordinating  the  work  in  which  they 
were  mutually  interested.  After  a  thorough  discussion  of  the  subject 
by  representatives  .in  conference  from  all  of  these  organizations,  it  was 
decided  that  the  co-ordination  of  this  work  of  Standardization  could  best 
be  carried  on  through  another  national  organization  set  up  especially  for 
this  purpose,  namely,  the  American  Engineering  Standards  Committee. 

A  separate  report  will  be  presented  to  the  Standardization  Confer- 
ence on  this  subject,  and  we  will  therefore  only  state  that  your  Stand- 
ardization Division  is  in  hearty  sympathy  with  this  movement  for  co- 
ordinating and  giving  a  national  character  to  this  work  of  Standardiza- 
tion for  the  mining  industry. 

Invitation  has  been  extended  by  the  Chairmen  of  your  two  General 
Committees  to  all  the  national  organizations  and  societies  interested  in 
Standardization  of  mining  methods  and  equipment,  to  attend  the  first 
National  Standardization  Conference,  and  to  participate  in  the  discussion 
and  work  generally  of  the  conference.  We  are  pleased  to  advise  that 
representatives  have  been  sent  to  our  conference  by  all  of  these  organiza- 
tions and  societies. 

This  work  of  Standardization  has  now  been  put  on  a  truly  national 


THE  AMERICAN  MINING  CONGRESS  225 

basis,  and  the  American  Mining  Congress  may  have  a  just  pride  in  the 
part  it  has  had  in  helping  accomplish  these  results,  which  indicate  a 
final  consummation  of  this  important  constructive  work  for  the  mining 
industry. 

A  Comprehensive  Program 

We  must  bear  in  mind  that  while  a  great  deal  has  been  accomplished 
as  set  forth  above,  that  we  must  not  slacken  our  efforts,  in  fact  our 
energies  must  be  multiplied  to  meet  the  growing  requirements  of  the 
comprehensive  program  we  have  undertaken.  We  believe  that  the  final 
benefits  will  fully  justify  all  the  labor  and  patience  required  by  those 
having  the  vision  to  see  the  final  results  to  be  accomplished.  In  pre- 
senting the  reports  of  our  Sub-Committees — all  of  which  are  attached 
hereto — we  recommend  a  careful  review  of  these  reports  by  our  General 
Committee  at  its  first  session  of  the  Standardization  Conference.  Such 
review  of  these  reports  will  indicate  the  necessity  for  the  co-ordination 
of  their  recommendations.  To  illustrate:  referring  to  the  reports  of  the 
Sub-Committees  on  Mining  and  Loading  Equipment,  and  the  Committee 
on  Underground  Transportation,  we  note  that  the  track  gages  adopted 
by  these  two  Sub-Committees  do  not  agree.  The  General  Committee, 
therefore,  in  conference  with  the  representatives  of  the  Sub-Committees 
should  harmonize  such  features  of  their  reports.  This  is  only  one  illus- 
tration of  several  that  could  be  mentioned  indicating  the  necessity  for 
the  very  careful  review  of  these  reports  by  the  General  Committee. 

The  General  Committee  should  also,  in  reviewing  these  reports,  con- 
sider carefully  each  and  every  one  of  their  recommendations  to  the 
end,  that  we  should  not  suggest  standards  for  adoption  by  the  industry 
which  shall  meet  with  general  opposition.  We  must  always  bear  in  mind 
that  standards  require  general  adoption  by  the  industry  to  make  them  of 
value. 

We  recommend  further  that  the  General  Committee  refer  to  the  Gen- 
eral Conference  on  Standardization  all  subjects  on  which  they  believe 
that  a  general  discussion  by  the  conference  would  be  beneficial. 

It  will  be  found  on  reviewing  these  reports,  that  many  important  ques- 
tions justify  a  very  broad  and  full  discussion  before  final  recommenda- 
tions should  be  made  by  our  General  Committee  to  the  Conference  for 
adoption. 

Procedure 

After  the  adoption  of  these  reports  as  revised  by  the  General  Com-, 
mittee,  or  by  the  General  Committee  in  conjunction  with  the  Standardiza- 
tion Conference  as  suggested  just  above,  we  then  recommend  that  these 
final,  approved  reports  be  submitted  to  the  Standardization  Conference 
for  approval  and  adoption. 

MR.  SCHOLZ:  I  will  call  on  Mr.  Thomas  T.  Brewster,  chairman  of 
the  Committee  on  Cost  Accounting,  National  Coal  Association. 

MR.  BREWSTER:      I  have  not  prepared  a  set  address,  but  have  brought 


226  REPORT  OF  PROCEEDINGS 

with  me  150  copies  of  the  report  of  the  National  Coal  Association,  which 
was  presented  to  that  body  at  its  annual  meeting  a  year  ago.  That 
report  has  found  favor  with  the  Treasury  Department,  also  with  public 
accountants;  and  a  number  of  the  coal  operators  throughout  the  country 
have  adopted  this  form  of  accounting.  What  I  propose  doing  later  is  to 
make  some  remarks  introducing  that  report,  referring  to  its  salient 
features,  and  then  distribute  the  copies  mentioned. 

[An  abstract  of  Mr.  Brewster's  paper  appears  on  page  818  of  the  Pro- 
ceedings.] 

MR.  SCHOLZ:  The  Committee  would  like  to  have  a  written  report 
from  all  the  Chairmen.  It  need  not  necessarily  be  long,  but  they  should 
give  some  of  their  thoughts  for  discussion.  Standardization  work  is  not 
simple;  in  fact,  it  is  a  difficult  problem,  because  we  meet  opposition  from 
Committees  Include  all  Technical  Men 

the  most  unexpected  quarters.  In  selecting  my  committee  I  included 
three  coal  operators,  three  mining  engineers,  and  the  remainder  is  made 
up  of  representatives  of  the  manufacturers.  For  instance:  Mr.  A.  V. 
Riser  is  chairman  of  the  Committee  of  Underground  Power  and  Trans- 
mission, and  that  Committee  has  made  a  voluminous  report,  perhaps  the 
best  report  of  any  of  them.  They  are  evidently  composed  of  workers 
and  men  who  know  things,  because  they  have  surprised  me  with  a  num- 
ber of  facts  which  I  did  not  know  existed.  I  will  be  glad  to  have  Mr. 
Riser  give  us  a  resume  of  the  salient  points  of  his  report. 

MR.  RISER:  I  might  say  that  we  experienced  serious  difficulty  in 
getting  men  to  work  on  these  Committees.  We  found  that  many  of 
them  whom  we  wanted  gave  as  an  excuse  that  they  were  too  busy,  and 
we  concluded  in  the  event  that  we  required  assistance  in  the  future, 
that  we  would  get  someone  who  was  in  an  official  position  with  the 
American  Mining  Congress,  to .  write  the  president  or  vice-president  of 
these  companies,  and  put  the  case  before  them,  and  tell  how  urgent  it 
was  that  their  engineers  get  in  on  this  work. 

[The  joint  report  of  the  Sub-Committees  on  Standardization  of  Under- 
ground Power  Transmission  and  of  Power  Equipment  appears  en  page 
688  of  the  Proceedings.] 

MR.  SCHOLZ:  Are  there  any  other  remarks  in  connection  with  the 
report  of  the  Committee  on  Underground  Power  and  Transmission?  If 
so,  now  is  the  time  to  present  them. 

Report  By  Mr.  Scholz 

The  report  of  the  Committee  on  Mining  and  Loading  is  short,  and  was 
written  by  myself.  It  is  as  follows: 

The  Sub-Committee  on  Mining  and  Loading  Equipment  submits  the  fol- 
lowing report  on  its  activity  during  the  past  year: 

1.  The  increasing  cost  of  coal  production,  coupled  with  the  difficulties 
in  obtaining  efficient  and  sufficient  labor  for  hand  mining,  makes  the 


THE  AMERICAN  ^MINING  CONGRESS  2'J7 

adoption  of  mechanical  means  for  mining  and  loading  coal  more  im- 
portant than  heretofore,  and  it  is  recommended  that  manufacturers  and 
mine  operators,  with  their  engineers,  co-operate  more  freely  in  the  use 
of  equipment  now  available,  with  the  view  of  developing  methods  by  the 
use  of  which  better  returns  be  obtained  from  such  machinery  as  it  now 
on  the  market. 

2.  We  recommend  that  in  the  construction  of  machines,  the  size  and 
speed  of  motors,  gears,  drive-chains,  and  other  parts  be  standardized  as 
far  as  possible,  so  as  to  simplify  the  repairs  and  renewals  of  machines. 

3.  We  recommend  that  the  award  of  the  Bituminous  Coal  Commission, 
with   reference  to  the  use  of  labor-saving  devices,  be  given   the  widest 
possible  publicity,  thereby  encouraging  the  installation  and  use  of  labor- 
saving    devices,    particularly    in    those    districts   where   such    machinery 
has   heretofore  been  opposed  by  the  United  Mine  Workers  organization. 

4.  We  recommend  that  the  Standardization  Committee  of  the  Ameri- 
can Mining  Congress  request  mining  schools  and  similar  institutions  to 
co-operate  with  this   Committee,  and  through  them,  with  the  manufac- 
turers  of  mining  equipment,  and  coal  operators  in   the   development  of 
mining  methods  to  enable  the  greatest  possible  extraction  of  coal. 


Following  is  a  brief  of  the  discussion  on  the  Report  of  the  Sub- 
committee on  Standardization  of  Mining  and  Loading  Equipment 
by  the  Chairman  of  the  General  Committee: 

Machines  for  Rapid  Development 

Mr.  James  Needham,  general  superintendent  for  the  St.  Paul  Coal  Co. 
and  Republic  Coal  Co.,  said  that  the  entry  driving  and  loading  machine  is 
perhaps  the  only  solution  for  the  rapid  development  of  a  coal  mine,  but  he 
believes  that  these  machines  require  perfecting  before  they  can  be  con- 
ered  entirely  satisfactory.  He  stated  that  the  long-wall  mines  in  northern 
Illinois  are  perhaps  in  as  great  need  of  mechanical  loading  appliances  as 
any  other  mining  field,  but  it  has  been  found  difficult  to  develop  a  satis- 
factory machine  for  long-wall  mining,  especially  with  the  present  exces- 
sive cost  of  operation.  He  hopes  that  a  satisfactory  machine  for  these 
mines  may  be  developed,  as  present  conditions  are  very  discouraging. 

Mr.  W.  D.  Brennan,  who  was  connected  with  the  Hannah  property  of 
the  Union  Pacific  Railway,  explained  to  the  Conference  how  loading 
machines  were  used  in  a  coal  seam  35  ft.  in  thickness  and  on  a  17°  pitch, 
where  the  rooms  were  driven  along  the  strike.  He  stated  that  they  had 
many  difficulties  in  adopting  these  machines  to  this  service,  but  stated 
that  after  a  number  of  years  of  experimenting  they  now  had  machines  in 
continuous  operation  which  were  giving  them  a  production  of  from  800 
to  1000  tons  a  day,  with  only  12  men  actually  used  in  the  operation  of 
these  shovels.  Additional  men,  of  course,  were  required  for  handling 
of  cars  to  and  from  the  shovel,  etc. 


228  REPORT  OF  PROCEEDINGS 

Mr.  Scholz  urged  that  for  loading  machines  we  should  adhere  to  220 
volts  for  alternating  and  250  volts  for  direct  current.  Experience  had 
taught  him  that  these  voltages  were  preferable  and  most  economical. 

Mr.  Kiser  stated  that  the  large  operators  of  western  Pennsylvania 
took  exception  to  this  recommendation  by  Mr.  Scholz  and  considerable 
discussion  on  the  matter  followed.  One  of  the  recommendations  of  this 
Committee  being  that  the  size  of  motors,  gears,  drive-chains,  and  other 
parts  be  standardized  so  as  to  simplify  the  repairs  and  renewals  of  dif- 
ferent makes  of  machines,  a  considerable  discussion  followed  as  to  the 
possibility  or  desirability  of  carrying  out  this  recommendation. 

Mr.  Ebe  added  that  if  it  had  not  been  for  mechanical  appliances  it 
would  have  been  impossible  for  his  company  to  mine  400  or  500  tons  of 
coal  daily. 

In  reply  to  a  query  by  Mr.  Kaseman  of  New  Mexico,  whether  it  was  the 
tendency  of  inventors  to  devote  their  attention  to  such  devices  as  the 
steam-shovel  for  large  veins,  or  for  low  veins,  Mr.  Scholz  said  that  he 
believed  most  of  the  machines  were  for  relatively  thick  seams — from  4  to 
8  ft.  Some  shoveling  or  conveying  machines  will  operate  in  coal  as  low 
as  5%  ft. 

It  seemed  to  be  the  consensus  of  opinion,  however,  that  progress  could 
be  made  along  these  lines  and  that  small  differences  between  the  manu- 
facturers on  certain  details  could  be  avoided  and  in  time  that  with  the 
co-operation  of  the  manufacturers  very  considerable  improvement  would 
be  made  which  would  work  for  economy  in  the  maintenance  of  such 
machines. 

With  intelligent  and  conservative  requests  by  the  operators  through 
their  Standardization  Committees,  it  is  fully  believed  that  the  manufac- 
turers will  end  such  co-operation  and  that  we  shall  finally  progress  much 
further  along  these  lines  than  at  present  would  seem  possible,  espe- 
cially to  those  who  have  not  given  a  great  deal  of  thought  to  the  matter. 

CHAIRMAN  SCHOLZ:  The  next  matter  on  the  program  is  the  report 
of  the  Commitee  on  Standardization  of  Outside  Coal-Handling  Equip- 
ment, of  which  Col.  Roberts  is  chairman,  and  will  be  presented  by  Mr. 
Needham : 

Report  on  Outside  Coal-Handling  Equipment 

The  Chairman  of  this  Sub-Committee  has  had  such  time  as  he  could 
spare  from  his  regular  duties  almost  entirely  occupied  with  the  work 
required  as  Chairman  of  the  General  Committee  of  the  Coal  Mining 
Branch,  consequently  the  work  of  this  Sub-Committee  has  not  received 
proper  attention.  We  therefore  suggest  that  the  General  Committee 
select  a  new  Chairman  for  this  Sub-Committee.  The  present  Chairman 
will  very  gladly  serve  as  a  member  of  this  Sub-Committee,  but  hopes 
that  the  General  Committee  will  select  from  this  Sub-Committee,  as  at 
present  constituted,  someone  else  to  act  as  Chairman, 


THE  AMERICAN  MINING  CONGRESS  229 

It  was  the  sense  of  this  Sub-Committee,  as  indicated  in  its  report 
to  the  General  Committee  at  our  last  annual  Convention,  that  each  Sub- 
Committee  should  first  concern  itself  with  the  more  general  and  im- 
portant matters  relating  to  the  designing  and  installation  of  equipment 
included  under  their  sub-division  of  Standardization  and  Mining  Equip- 
ment. To  this  end  it  was  recommended  that  each  Sub-Committee  should 
make  a  careful  study  of  present  practice,  as  related  to  the  work  of  their 
Sub-Committee,  and  include  in  their  first  work  the  improvement  and 
standardization  of  the  general  practice  and  methods  relating  to  their 
sub-division  work,  and  that  this  work  should  then  be  followed  by  a 
study  of  equipment  included  in  their  sub  division  of  work,  and  endeavor 
to  improve  and  standardize  such  equipment. 

Following  this  general  and  comprehensive  program,  this  Sub-Com- 
mittee has  taken  under  consideration,  and  begs  to  report  suggestions 
and  recommendations  for  the  consideration  of  the  General  Committee 
as  follows: 

The  study  of  present  practice  as  related  to  the  designing  and  building 
of  coal  tipples,  head-frames,  etc.,  indicates  that  one  of  the  first  and  most 
important  duties  of  this  Sub-Committee  is  to  try  and  improve  and 
standardize  the  present  practice  which  relates  to  the  safety  and  economy 
in  the  operation  of  this  unit  of  a  mining  plant. 

Railroad  Clearances 

A  study  of  present  practice  indicates  that  there  is  no  uniformity  in 
the  clearance  either  horizontally  or  vertically  for  railroad  tracks  passing 
beneath  tipples.  This  lack  of  uniformity  and  good  practice  in  the  various 
coalfields,  has  compelled  certain  railroads  to  promulgate  regulations 
governing  such  clearances.  In  some  instances,  these  regulations  seem  to 
be  adequate  and  reasonable,  and  in  other  instances,  they  seem  to  be  un- 
duly conservative  and  impose  on  coal  companies  providing  new  facilities, 
expense  that  even  good  practice  and  safety  would  not  require.  Your 
Committee,  therefore,  after  careful  consideration  of  this  matter  makes 
the  following  recommendations  regarding  clearances  for  railroad  cars: 

A  standard  practice  should  be  adopted,  which  would  provide  for  a 
lateral  clearance  between  the  widest  cars  passing  under  such  tipple,  and 
the  nearest  tipple  support,  or  any  support  built  in  connection  with  the 
tipple  structure,  of  at  least  18  inches. 

That   no   support   should   be   placed   between    railroad    tracks    passing 
under  a  tipple  structure  except  between  the  two  outside  tracks,  namely, 
.  the  usual  dump  track  and  the  one  adjacent,  except  where  the  requirements 
make  it  absolutely  necessary  to  insert  supports  between  other  tracks. 

That  the  clearance  between  cars  on  tracks  where  no  supports  are 
inserted  should  not  be  less  than  2  ft. 

Referring  to  the  vertical  clearance  above  railroad  cars  passing  under 
tipple  structure,  it  has  been  difficult  for  your  Committee  to  reach  a  satis- 
factory conclusion  on  account  of  the  varying  heights  of  railroad  equip- 


230  REPORT  OF  PROCEEDINGS 

ment,  and  especially  due  to  the  fact  that  certain  railroads  have  regula- 
tions regarding  the  passing  of  engines  under  tipple  structures.  How- 
ever, your  Committee  recommends  that  this  matter  be  taken  up  for  dis- 
cussion at  our  coming  Standardization  Conference,  with  the  object  of 
trying  to  secure  suggestions  from  our  members  which  your  Committee 
will  then  take  under  further  consideration. 

We  believe  that  this  question  of  railroad  clearances  under  tipple  struc- 
tures is  of  sufficient  importance  to  warrant  its  most  careful  considera- 
tion with  the  ultimate  object  of  trying  to  secure  more  uniform  and  safer 
practice. 

To  secure  these  results  it  may  be  necessary,  after  definite  conclusions 
have  been  reached — which  are  satisfactory  to  the  more  progressive  ele- 
ment in  the  industry — to  enforce  safe  requirements  regarding  clearances 
by  State  legislation  in  respective  districts  where  this  may  be  required. 

Clearances  for  Over-Wind 

A  study  of  present  practice  indicates  that  there  is  not  sufficient  im- 
portance given  to  providing  adequate  distance  between  the  point  of 
dump  in  tipples,  and  the  first  obstruction  in  the  tipple  above  the  point 
of  dump. 

When  slow-speed  hoists  were  in  general  use,  so  much  importance  did 
not  attach  to  the  question  of  proper  clearance  for  over-wind.  However, 
even  in  the  past,  properly  designed  tipples  always  provided  a  few  feet  of 
clearance  above  the  highest  point  reached  by  the  cage  when  dumping, 
and  the  nearest  obstruction  in  the  tipple  or  head-frame  above. 

With  the  present  extensive  use  of  high-speed  electric  hoists,  this  mat- 
ter of  clearance  for  over-wind  becomes  an  important  one,  and  a  safe 
clearance  should  always  be  provided,  taking  into  account  the  speed  of 
the  cage  when  entering  the  dumping  horns,  and  also  considering  all 
devices  to  be  installed  both  in  the  tipple  or  on  the  hoist  to  prevent  over- 
winding. 

Your  Committee  has  not  reached  definite  conclusions  in  this  matter, 
and  therefore  wishes  to  refer  it  to  the  Conference  for  further  discussion 
and  suggestions. 

It  also  seems  reasonable  that  automatic  stops  should  be  provided  to 
prevent  or  control  over-wind  in  high-speed  electric  hoists. 

Your  Committee  would  be  pleased  to  have  this  question  discussed  and 
to  receive  your  suggestions. 

Fire  Protection 

There  is  a  great  lack  of  uniformity  and  safe  practice  as  regards  the 
building  of  structures  over  or  near  mine  openings.  Certain  States  have 
laws  requiring  that  only  fireproof  structures  may  be  built  over  or  within 
a  certain  specified  distance  of  any  mine  opening.  In  other  States,  where 
such  legal  requirements  do  not  make  it  necessary,  unsafe  practice  largely 
prevails. 


THE  AMERICAN  MINING  CONGRESS  231 

Your  Committee  therefore  recommends  that  good  and  safe  practice,  as 
provided  for  by  the  mining  laws  of  certain  States,  regarding  fireproof 
structures  over  or  near  mine  openings,  should  be  adopted,  and  an  effort 
made  to  have  such  practice  adopted  in  other  Stales. 

Even  in  the  States  where  laws  have  been  passed  for  such  protection, 
the  laws  are  not  always  sufficiently  definite  and  controversy  arises  be- 
tween the  State  Mining  Board  and  operators  who  wish  to  economize. 

We  believe  that  a  careful  study  should  be  made  of  the  requirements  in 
States  having  such  protective  laws,  with  the  object  of  recommending  to 
the  State  Mining  Boards  what  we  would  consider  good  and  safe  practice. 
We  fully  believe  that  these  Boards  would  welcome  such  suggestions  and 
recommendations  from  our  Congress. 

We  further  believe  that  a  careful  study  of  the  ultimate  economy  secured 
by  providing  fireproof  structures  over  and  adjacent  to  mine  openings 
would  fully  warrant  the  expenditure  necessary  to  secure  such  protection. 
Frequent  fires  at  coal  mines,  at  the  most  inopportune  time,  when  produc- 
tion is  required,  indicate  that  a  reasonable  expenditure  to  prevent  such 
fires,  is  an  evident  economy  in  the  life  and  operation  of  a  mine. 

It  would  seem  that  only  persistent  education  carried  on  through  such 
agencies  as  our  Congress,  and  other  organizations  of  like  purpose,  is 
necessary  to  secure  these  beneficial  results. 

Standardization  of  Merchandizing  Machinery 

It  would  seem  to  your  Committee,  after  careful  consideration  of  the 
matter,  that  considerable  standardization  could  be  accomplished  in  cer- 
tain standard  equipment  and  machinery  as  now  provided  by  manufac- 
turers of  such  machinery. 

In  making  this  suggestion  it  is  not  contemplated  that  requests  should 
be  made  on  manufacturers  to  produce  uniform  machinery  for  certain 
purposes,  but  only  to  provide  such  machinery  with  as  nearly  as  possible 
standard  and  uniform  connecting  parts. 

We  believe  that  the  manufacturers  will  co-operate  with  us  in  our 
endeavor  to  standardize  such  parts,  and  thereby  obviate  the  great  diver- 
sity of  such  connections  as  now  appear  on  machinery  made  for  the  same 
purpose. 

Your  Committee  therefore  recommends  that  this  matter  be  fully  dis- 
cussed, and  that  special  inquiries  should  be  made  from  the  manufac- 
turers' representatives  present  at  our  Standardization  Conference,  to 
obtain  their  views,  and  if  possible,  their  co-operation  in  securing  the 
beneficial  results  from  the  operators'  viewpoint  from  such  standardiza- 
tion. 

Cages,  Skips,  and  Dumps 

We  believe  that  a  careful  study  of  the  cages  and  skips  used  for  hoist- 
ing men,  coal,  and  materials,  will  indicate  that  there  is  opportunity  for 
a  vast  improvement  in  the  safety  devices  applied  to  such  equipment. 


232  REPORT  OF  PROCEEDINGS 

It  would  not  seem  feasible  to  endeavor  to  secure  the  adoption  of  any 
standards  for  such  devices,  so  far  as  their  uniformity  is  concerned,  but 
it  would  appear  practical  and  highly  beneficial  to  make  a  study  of  all 
such  devices  with  the  object  of  adopting  and  recommending  those  which 
would  comply  with  good,  safe  practice  for  the  various  equipment  to  which 
they  would  apply,  and  to  endeavor  to  secure  the  adoption  of  better  and 
safer  devices  on  such  equipment  as  now  marketed  and  which  is  not 
provided  with  safe  appliances.  Your  Committee  therefore  recommends 
a  more  careful  and  extended  study  of  this  subject. 

We  believe  that  there  is  so  much  room  for  general  improvement  in 
present  day  practice,  especially  among  the  lines  that  we  have  mentioned 
above,  that  little  opposition  would  be  encountered  from  the  industry  in 
securing  the  adoption  of  our  recommendations  if  we  will  keep  them 
within  conservative  lines. 

We  also  believe  that  having  secured  the  adoption  of  certain  improved 
practices  and  standards  by  the  industry,  that  it  will  naturally  follow 
that  further  improvement  and  standardization  can  be  recommended,  and 
will  also  be  adopted.  This  process  of  education  and  improvement  go  hand 
in  hand,  and  is  a  line  along  which  all  progress  is  made  in  any  industry. 


Following  is  a  brief  of  the  discussion  of  the  Report  of  the  Sub- 
Committee  on  Outside  Coal-Handling  Equipment  by  the  Chairman 
of  the  General  Committee: 

Discussion  of  Sub-Committee's  Report 

Mr.  Wilson  stated  that  he  was  greatly  impressed  with  the  valuable 
contributions  in  this  report,  especially  those  relating  to  safety,  and  sug- 
gested that  the  discusion  be  taken  up  in  the  order  of  the  recommenda- 
tions made  by  the  Sub-Committee. 

Mr.  Scholz,  acting-chairman  of  the  Conference,  stated  that  the  first 
recommendation  of  the  Sub-Committee  referred  to  clearances  for  railroad 
cars  under  tipple  structures,  and  that  the  Committee  made  definite  recom- 
mendations regarding  horizontal  clearances,  but  had  found  it  difficult  to 
decide  on  the  vertical  clearance  due  to  the  varying  height  of  railroad  cars. 

In  this  connection  Mr.  Scholz  stated  that  the  Virginian  Railway  was 
using  120-ton  coal  cars,  which  he  believed  were  10  ft.  6  in.  high,  while  the 
Western  roads  used  not  only  smaller  cars,  but  cars  of  much  less  height 
for  the  reason  that  they  were  of  the  gondola  type. 

Mr.  Needham  did  not  believe  it  practical  to  recommend  a  standard  ver- 
tical clearance,  on  account  of  the  great  diversity  in  the  height  of  railroad 
cars. 

Mr.  Wilson  spoke  at  considerable  length  regarding  the  necessity  for 
providing  proper  vertical  clearance  above  loading  platforms,  and  advised 
*hat  certain  Workmen's  Compensation  Acts  require  insurance  men  to  de- 


THE  AMERICAN  MINING  CONGRESS  233 

termine  certain  standards  of  safety  in  this  connection,  and  he  asked 
the  co-operation  of  the  American  Mining  Congress  and  others  in  this 
direction. 

Highest  Railroad  Cars  Determine  Clearance  of  Tipples 

Mr.  Riser  suggested  that  his  understanding  of  vertical  clearance  would 
be  the  difference  between  the  fixed  tipple  structure  and  the  highest  rail- 
road cars  that  would  visit  a  particular  mine. 

The  Chairman  of  your  Committee,  in  reviewing  this  discussion,  agrees 
with  the  latter  conclusion,  and  believes  it  possible  to  recommend  and 
adopt  a  minimum  vertical  clearance  which  it  would  be  assumed  should  be 
the  clearance,  as  Mr.  Kiser  suggests,  above  the  highest  railroad  cars  de- 
livered to  any  particular  mine. 

Regarding  the  horizontal  clearance,  Mr.  Wilson  stated  that  he  thought 
the  recommendations  of  the  Committee,  namely,  a  minimum  of  18  in. 
between  any  support  under  the  tipple  structure,  and  the  widest  railroad 
cars  passing  under  such  structure  was  insufficient,  and  it  should  be  at 
least  20  inches.  There  seemed  to  be  no  adverse  opinion  to  this  suggestion 
and  the  Sub-Committee  will  therefore  accept  this  recommendation. 

Mr.  Scholz  stated  that  the  next  question  for  discussion  in  this  Sub- 
Committee's  report  was  'clearance  for  over-wind.'  He  stated  that  this 
was  an  important  matter,  due  to  the  adoption  of  high-speed  hoists,  es- 
pecially at  large  mines,  where  the  cages  or  skips  were  likewise  of  a  heavy 
type,  and  for  this  reason  a  much  larger  clearance  was  required  for  safety 
than  at  mines  where  slow-speed  hoists  and  lighter  equipment  were  used. 

Mr.  Bright  advised  that  he  had  visited  mines  where  there  was  practi- 
cally no  clearance  for  over-wind  allowed,  or  at  best  only  a  foot  or  two, 
which  he  considered  a  dangerous  condition.  He  therefore  considered  it 
important  that  some  reasonable  safe  clearance  for  over-wind  should  be 
agreed  upon. 

Mr.  Larson  was  of  the  opinion  that  even  with  adequate  clearance  for 
over-wind  safety  would  not  be  attained  without  the  use  of  proper  safety 
devices  for  slowing  down,  and  for  preventing  over-wind. 

Mr.  Kiser  suggested  that  such  devices  for  slowing  down  and  preventing 
over-wind  were  difficult  to  apply  where  the  tonnage  required  at  a  mine 
was  greatly  taxing  the  hoisting  equipment. 

Summing  up  this  discussion,  your  Committee  believes  that  a  reasonable 
minimum  clearance  for  over-wind  of  at  least  10  or  12  ft.  is  advisable,  and 
will  be  an  additional  feature  of  safety  notwithstanding  any  other  safety 
devices  that  may  be  applied. 

Mr.  Scholz  stated  that  the  next  subject  recommended  by  the  Committee 
for  consideration  was  fire  protection: 

Fire-Resistant  a  Better  Term  Than  Fireproof 

Mr.  Wilson  believed  that  real  fireproofing  is  a  very  much  over-worked 
phrase,  and  is  very  badly  applied  in  general.  He  had  a  great  deal  of 


234  REPORT  OF  PROCEEDINGS 

experience  in  this  connection  while  in  conferences  with  the  National  Fire 
Protection  Association,  and  he  advised  that  practically  nothing  in  the  way 
of  building  construction  is  fireproof,  and  therefore  suggests  that  we  would 
better  use  the  term  'fire-resistant'  and  'slow-burning'  for  another  grade 
of  construction.  He  believed  that  this  important  subject  needed  furthe  • 
consideration,  and  that  it  would  be  well  to  appoint  a  Sub-Committee  from 
this  Committee  to  make  a  careful  study  of  this  whole  subject  of  fire 
protection  for  mine  shafts,  slopes,  and  mine  bottoms. 

There  was  considerable  discussion  of  this  subject,  and  it  seemed  to  be 
the  consensus  of  opinion  that  several  types  of  construction  being  used  to 
fulfill  the  requirements  of  mine  laws  for  fireproof  construction  did  not 
always  answer  this  requirement,  especially  after  such  construction  had 
been  installed  for  some  time,  and  might  be  damaged  by  accident  or 
otherwise. 

Your  Committee  therefore  would  sum  up  this  discussion  with  the  con- 
clusion that  no  construction  is  fireproof  if  it  is  made  up  of  combustible 
material,  even  though  such  material  may  be  covered  with  a  layer  of  fire- 
proofing,  or  fire-resisting  material. 

Your  Committee  also  agrees  with  the  suggestion  that  this  is  a  subject 
of  sufficient  importance  to  deserve  the  further  consideration  of  a  special 
committee,  which  would  make  a  thorough  study  of  the  subject  and  report 
back  to  this  Committee. 

Mr.  Scholz  stated  that  the  next  subject  presented  by  the  Committee  for 
consideration  was  standardizing  machinery. 

The  discussion  of  this  topic  seemed  to  be  wide  of  the  mark,  and  your 
Committee  can  only  hope  that  on  publication  of  the  work,  more  careful 
consideration  will  be  given  to  the  recommendation  by  the  Committee  re- 
garding standardization  of  certain  parts  of  more  or  less  standardized 
equipment  and  machinery. 

Mr.  Scholz  stated  that  the  last  subject  submitted  by  the  Committee  for 
consideration  was  cages,  skips  and  dumps,  a  subject  on  which  he  could 
spend  a  whole  day  and  then  have  much  left  to  say.  No  further  discussion 
was  offered  on  the  recommendations  of  the  Committee  that  certain  mini- 
mum requirements  for  safety  should  be  recommended  and  adopted  for 
cages,  skips,  and  dumps. 

MR.  SCHOLZ:  If  there  is  no  further  discussion,  we  will  pass  to  the 
next  paper,  which  is  the  report  of  the  Sub-Committee  on  Underground 
Transportation,  of  which  Mr.  Watts  is  chairman. 


THE  AMERICAN  MINING  CONGRESS  235 

Following  is  the  Report  of  the  Sub-Committee  on  Standardiza- 
tion of  Underground  Transportation: 

The  adoption  of  standards  is  a  matter  of  education  and  leads  to  safe 
and  economical  production  and  operation  for  both  manufacturer  and  con- 
sumer of  such  apparatus  and  equipment  as  falls  within  the  influence  of 
its  prescribed  subjects.  While  we  understand  that  this  Committee  was 
authorized  to  recommend  standards  covering  transportation  problems  of 
underground  mine  operation,  yet  we  believe  in  view  of  the  experience  of 
other  organizations  and  associations  similarly  engaged  in  attempts  to 
standardize  certain  matters  in  connection  with  their  work,  that  better 
results  will  be  obtained  if  at  present  we  were  to  suggest  a  number  of 
practices  that  would  be  known  as  'Recommended  Practices'  rather  than 
iron  bound  or  fixed  standards.  We  feel  that  when  a  standard  of  anything 
is  adopted,  it  should  be  one  that  all  of  the  members  of  any  association 
could  and  would  subscribe  to. 

The  Sub-Committee  undertakes  to  submit  for  the  General  Committee's 
consideration  Recommended  Practices  on  the  following:  (1)  track  gage; 
(2)  minimum  track  curvature;  (3)  wheel-base — coal  mine-cars;  and  (4) 
maximum  outside  length  of  car-body;  and,  in  addition  to  these,  to  outline 
the  work  in  connection  with  details  of  car  construction,  which  it  has  in 
view  for  early  attention. 

Track  Gage  (Recommended  practice,  42  inches) 

It  is  well  recognized  by  the  Committee  that  at  the  present  time  track 
gages  vary  by  almost  inches  from  24  to  48  in.  with  standard-gage  track 
occasionally  in  use.  They  recognize  also  that  36,  42,  44,  and  48-in.  gage 
tracks  predominate,  and  we  have  ascertained  that  in  installations  re- 
cently made  and  contemplated,  about  80%  of  the  track  to  be  installed  is 
of  42-in.  gage.  The  Committee  realizes  the  actual  necessity  of  making  one 
gage  of  track  as  a  Recommended  Practice  if  we  are  ever  to  accomplish 
anything  in  the  way  of  standards.  We  realize  that  mine  developments 
are  becoming  larger,  heavier  cars  are  being  used,  larger  locomotives  are 
required,  higher  speeds  are  necessary,  all  of  which  tends  to  economy,  and 
after  material  deliberation  we  have  decided  to  make  the  definite  recom- 
mendation for  a  42-in.  gage  track,  because  on  this  gage  can  be  con- 
structed a  standard  car  which  is  capable  of  containing  any  tonnage  from 
1  to  5  tons  of  coal. 

Minimum  Track  Curvature 

Recommended  Practice — for  rooms,  not  main  haulage,  28  ft.  radius 
based  on  No.  2  track-frog,  having  an  angle  of  28°  04'.  Having  recom- 
mended a  definite  track  gage  the  Committee  feels  the  necessity  of  recom- 
mending a  minimum  curvature  of  track.  After  giving  this  subject  much 
consideration,  and  consulting  with  the  manufacturers  of  track,  we  find 
that  most  consistent  minimum  curvature  that  could  be  established  would 
be  that  of  a  28-ft.  radius,  which  is  based  on  the  use  of  a  No.  2  track-frog 
having  an  angle  of  28°  04'.  The  Committee  realizes  that  this  is  se«m- 


236  REPORT  OF  PROCEEDINGS 

ingly  a  large  step  in  track  construction.  It  has  considered  that  there 
will  probably  be  a  little  increase  in  cost  in  the  initial  laying  of  track' 
with  this  curvature.  We  have,  however,  considered  its  relation  to  the 
4'2-in.  gage  of  track,  and  to  the  capacity  of  cars  that  must  be  hauled 
around  the  curves.  There  is,  as  all  engineers  realize,  a  direct  relation 
between  track-gage  curvature  and  wheel-base  of  cars  which  will  permit 
economy  in  operation  of  equipment,  economy  in  track  repairs,  and  a 
distinct  lessening  in  car  derailments,  which  are  in  themselves  economies. 

Wheel-Base    of    Coal    Mine-Cars    (Recommended    Practice,    Minimum    42 
inches) 

The  Committee  makes  this  direct  recommendation,  because  there  is  a 
distinct  relation,  that  must  be  adhered  to,  between  track  gage,  curvature, 
and  wheel-base.  A  wheel-base  equal  to  track  gage  is  (1)  theoretically 
correct  and  practically  permissible;  (2)  it  eliminates  derailment;  (3) 
increases  speed;  (4)  lengthens  the  life  of  cars  in  service;  (5)  future 
operations  tends  to  higher  speed  and  larger  capacity  cars;  and  (6)  while 
this  is  a  radical  departure  from  present  practice  since  the  early  establish- 
ment of  26-in.  wheel-base,  it  is  realized  that  these  short  wheel-bases  are 
fast  passing  from  mines.  New  features,  such  as  mechanically-handled 
cars  at  the  face  of  rooms,  the  necessity  of  reducing  the  cost  of  operation, 
all  tending  towards  the  use  of  the  larger  car,  which  in  turn  necessitates 
the  longer  wheel-base. 

Overall  Length  of  Car-Body   (Recommended  Practice) 

The  maximum  outside  length  of  coal  mine-car  body  measured  over 
sills — not  bumpers — shall  be  126  in.  In  an  endeavor  to  establish  a  fixed 
relation  between  the  wheel-base  and  the  length  of  the  car-body,  due  con- 
sideration has  been  given  to  the  results  observed  in  deteriorating  effects 
of  mine-cars  in  service.  It  is  generally  considered  that  one  of  the  prin- 
cipal channels  of  deterioration  of  coal  mine-cars  comes  through  the  bend- 
ing of  the  car-body  bottom  over  the  axles  when  the  centers  of  axles  are 
too  close  together.  This  results  in  the  early  destruction  of  the  car,  and 
therefore  means  a  heavy  repair  expense  because  of  this  short  wheel-base. 
Therefore  it  was  unanimously  agreed  that  the  over-hang  of  a  car-body 
should  not  exceed  one-third  of  its  total  length.  This  in  turn  means  that 
the  maximum  car-body  length  will  be  three  times  the  wheel-base,  and 
since  the  wheel-base  has  been  fixed  at  42  in.,  it  is  better  to  state  this 
length  of  car-body  in  fixed  terms  of  inches  rather  than  relating  it  in  any 
way  to  the  wheel-base. 

Couplers  and  Height  of  Coupler  Center 

The  Committee  discussed  the  advisability  of  recommending  practices 
for  couplers  and  the  height  of  coupler  centers.  The  discussion  developed 
that  the  Federal  Government  had  already  thoroughly  cared  for  the  subject 
of  safety  appliances  for  railways  through  the  Interstate  Commerce  Com- 
mission, and  that  it  was  possible  in  the  future  that  the  Government  might 
establish  more  or  less  safety  appliance  standards  for  mine  equipment,  so 
it  might  be  well  if  the  American  Mining  Congress  could  anticipate  any 


THE  AMERICAN  MINING  CONGRESS  237 

action  that  the  Government  might  take  regarding  safety  rules  in  mine-car 
equipment.  It  was  therefore  recommended  by  this  Sub-Committee  that 
an  automatic  coupler  should  be  considered,  also  that  the  height  of  center 
of  couplers,  based  on  16-in.  wheels,  shall  be  10  in.  above  rails.  A  varia- 
tion 1  in.  above  and  1  in.  below  will  be  allowed  to  accommodate  18  and 
14  in.  wheels,  respectively.  This  provides  for  placing  the  drawbar  under 
the  car-floor  instead  of  above,  as  is  the  present  general  practice. 

These  subjects  will  be  considered,  and  final  recommendations  made  by 
this  Sub-Committee  at  an  early  date;  There  are  many  items  involved 
when  considering  the  height  of  coupler  center  before  a  standard  truck 
can  be  decided  upon,  such  as  wheel  diameters,  thickness  and  height  of 
flanges,  size  of  axles,  size  of  boxes,  etc.  These  points  should  be  considered 
and  established  in  conjunction  with  the  question  of  type  of  coupler  and 
height  of  coupler  center. 

Industrial  Car  Manufacturers'  Institute  (Recommended  Practice) 

This  organization,  which  is  an  association  of  industrial  car  builders, 
having  already  established  certain  Recommended  Practices  bearing  on 
the  practical  as  well  as  theoretical  construction  of  coal  mine-cars,  has 
given  our  Sub-Committee  a  memorandum  of  its  Recommended  Practices 
that  have  so  far  been  adopted.  It  is  our  understanding  that  these  prac- 
tices will  be  enlarged  upon  from  time  to  time,  and  will  include  recom- 
mendations covering  practices  for  treads  and  flanges  of  wheels,  weights 
of  wheels  for  carrying  capacity  of  cars,  diameter  for  axles,  and  journal 
bearings,  types  of  couplers,  and  so  forth. 

As  the  time  of  this  Sub-Committee  has  been  occupied  by  the  disposal  of 
the  above  definite  recommendations,  the  practices  of  the  Industrial  Car 
Manufacturers'  Institute1  have  not  been  discussed  in  detail  at  any  of  our 
meetings,  but  they  will  be  carefully  considered  by  the  Members  of  the 
Sub-Committee,  with  the  idea  of  discussing  them  at  the  next  meeting. 
For  the  information  of  members  of  the  American  Mining  Congress,  a  copy 
of  the  Industrial  Car  Manufacturers'  Institute's  'Recommended  Practices' 
for  mine-car  construction  is  attached  to  this  report. 

DATA  ON  COAL-MINE  CARS 
Bolts 

In  construction,  bolts  of  %  and  %-in.  diameter  only  are  to  be  used,  and 
lengths  shall  not  vary  in  multiples  of  less  than  %  inch. 

Capacity 

Weights  of  coal  to  be  used  in  computing  size  of  car-bodies: ' 

Cubic  Feet  per  Pounds  per 

Coals.  ton  of  2,000  Ib.  cubic  foot. 

Gas    42  47.6 

Low   volatile 35  57.1 

Anthracite 35  57.1 

Car-Bodies  (Widths) 

The  outside  width  of  car-body  bottoms  (measured  inside  of  belt  shall 
be  6  in.  less  than  track  gage. 


238  REPORT  OF  PROCEEDINGS 

Factor  of  Safety 

For  running  gear  and  under-frame  a  factor  of  safety  of  not  less  than 
four  to  be  used. 

Irons  (Square  and  Round) 

Square  and  round  iron  will  be  limited  to  sizes  varying  not  less  than 
%  in.  thickness  or  diameter. 

Irons   (Car-Body) 

All  kinds  of  flat  irons,  including  binders,  belt  braces,  and  braces,  ver- 
tical braces,  box  braces,  drawbars,  etc.,  shall  be  made  in  sizes  varying  not 
less  than  %  in.  width,  nor  %  in.  thickness. 

Lumber  Sizes 

Where  specifications  and  prints  do  not  definitely  state  the  requirement, 
it  should  be  considered  that  sizes  given  are  for  sawed  material. 

If  finished  material  is  called  for,  it  is  recommended  that  material  fur- 
nished shall  be  of  the  nearest  standard  finished  size  to  that  called  for. 

Rating 

To  determine  size  of  bodies,  to  be  'water-level  full  with  top  of  sides.' 

Questionnaire  for  Coal  Mine-Cars 

(This  form  approved  by  the  Industrial  Car  Manufacturers'  Institute.) 

Questionnaire  No 

Date 

Capacity 

Bushels Cubic  feet 

Gage  of  Track Wheel-Base Size  of  Axles 

Wheels 

Diameter Style Size  of  journal 

Length 

Inside  of  car 

Center  line  coupling  link 

Over  bumpers 

Height 

Car  side  above  rail 

Rear  end  above  bottom 

Brake 

Is  brake  wanted? Style 

Single  or  double 

Brake  Lever 

Handle 

On  which  side  standing  at  rear  of  car? 

Does  it  pull  to  right  or  left? 

Show  rough  outline  on  sketch  on  back  of  sheet. 
Bumpers 

Style 

Diameter  of  holes — Top Bottom 

Door-Latch 

Style On  which  side  standing  at  rear? 


THE  AMERICAN  MINING  CONGRESS  239 

Drawbar 

Type 

Size  of  coupling  holes Make  sketch 

End  Gate,  If  Required 

Lift  or  swing  type 

Hitching,  if  required: 

(Describe)    

Track  Curvature 

In  order  that  cars  will  operate  most  satisfactory  in  ore  and  coal  mines, 
the  following  information  for  elevating  the  outside  rail  of  track  on  curve, 
which  is  considered  general  good  practice,  is  given  to  members  to  be  used 
when  they  are  called  upon  to  suggest  types  of  track  construction.  This 
information  is  taken  from  the  'Coal  Miners'  Pocket  Book.' 

Degree  of  Radius  of  Elevation  of  outer 

curve.  curve,  feet.  rail,  inches. 

1  5,729.6  U 

2  2,864.9  U 

3  1,910.1  %6 

4  1,432.7  7/16 

5  1,146.3  %6 

6  955.4  i^8 

7  819.0  i%6 

8  716.8  % 

9  637.3  1 
10.0  573.7  H/6 
12.0  478.3  1%6 
15.0  383.1  1% 
18.0  3t9.6  li|{6 
20.0  287.9  25/16 
60.0  100.0  414 

112.9  60.0  4U 

180.0  50.0  4% 

It  is  not  generally  advisable  to  elevate  the  rail  more  than  4^  in.,  as  it 
is  not  good  practice  to  attempt  to  run  trips  around  sharp  curves  at  a  high 
speed.  The  rule  for  standard-gage  roads  (4  ft.  Sy2  in.)  on  surface  and  for 
speeds  of  25  to  35  miles  per  hour,  is  to  elevate  the  outer  rail  %  in.  for 
each  degree  of  curvature.  An  approximate  rule  often  given  for  narrower 
gages  is  to  make  the  elevation  proportional  to  the  gage  based  on  the 
amount  given  for  standard  gage.  Thus,  for  a  36-in.  gage,  the  elevation 
would  be  about  two-thirds  of  the  elevation  for  a  56 ^-in.  gage  for  the  same 
speed  and  curve. 

The  elevations  of  the  outer  rail  given  in  the  table  correspond  to  the 
middle  ordinates  of  the  respective  curves  for  a  chord  of  20  ft.  Hence,  a 
common  rule  to  determine  the  amount  of  the  elevation  of  the  outer  rail, 
for  a  speed  of  15  miles  per  hour  for  a  3-ft.  gage,  is  to  measure  the  middle 
ordinate  of  a  string  20  ft.  long,  stretched  as  a  chord  on  the  gage-line  of  the 
outer  rail.  For  higher  or  lower  speeds,  make  the  length  of  the  string 
proportional  to  the  speed;  thus,  for  a  speed  of  12  miles  per  hour  use  a 
16-ft.  string;  for  9  miles  per  hour  a  12-ft.  string,  etc.  Also  the  elevation 
should  be  proportional  to  the  gage;  thus,  for  a  30-in.  gage,  use  five-sixths 
of  the  above  elevation,  etc. 


240  REPORT  OF  PROCEEDINGS 

The  general  rule  is  to  begin  to  elevate  the  rail  a  short  distance  before 
the  curve  begins,  this  distance  depending  on  the  amount  required.  It  is, 
however,  not  always  practicable  to  do  this  in  mine  work. 

Track  Gage 

For  new  track  construction  and  for  use  of  equipment  wherever  possible, 
the  36,  42,  48  and  56% in.  (4  ft.  8%  in.  railroad  standard). 

Wheel-Base  (Length  of) 

Wheel-base  variations  to  be  between  24  in.  minimum  and  40  in.  maxi- 
mum, and  the  variations  be  not  less  than  2  in.  or  multiples  of  2  inches. 

The  following  wheel-base  computation  should  be  followed:  The  radius 
of  curves  over  which  cars  must  travel,  given  in  feet,  when  multiplied  by 
two,  gives  most  desirable  wheel-base  in  inches. 

Wheel  Diameters 

Wheels  of  the  following  diameters  only  to  be  used:  14,  16  and  18 
inches. 

Wheel  Mounting 

In  mounting  wheels  on  axles,  the  wheel  gage,  which  should  be  measured 
from  throat  of  flange  to  throat  of  flange  on  opposite  wheel,  should  be 
y2  in.  less  than  track  gage. 


Following  is  the  address  delivered  to  Joint  Sections  of  Metal  and 
Coal  Mining  Standardization  Sections  of  the  American  Mining 
Congress,  by  James  Milliken  president  of  the  Industrial  Car  Manu- 
facturers' Institute. 

At  the  request  of  Colonel  Warren  R.  Roberts,  chairman  of  the  Standard- 
ization Committee,  Coal  Mining  Section,  of  the  American  Mining  Con- 
gress, I  prepared  a  paper  to  be  read  before  this  Congress.  Since  attending 
several  of  the  Standardization  Committees'  conferences  I  have  been  im- 
pressed with  the  necessity  of  our  doing  a  number  of  things  in  a  consecu- 
tive order,  so  that  the  standardization  of  mining  equipment  may  become 
an  established  fact.  If  you  will  bear  with  me  for  a  few  moments  I  want 
to  emphasize  a  number  of  necessities  of  the  case. 

Standardization  Means  Economies  and  Efficiency 

You  appreciate  the  real  value  of  standardization,  it  means  economies 
and  efficiency.  In  order  that  standards  may  be  actually  realized,  it  is 
first  necessary  that  we  convince  the  mine  operators  that  the  proposed 
standards  are  correct,  and  that  real  economies  will  result.  In  order  to  do 
that,  in  the  first  place  your  several  Committees  must  make  the  same 
recommendations.  Unless  this  is  done,  no  real  standards  can  be  set.  This 
is,  I  believe,  the  first  real  Standardization  Congress  that  has  been  held, 


THE  AMERICAN  MINING  CONGRESS  241 

or  in  which  real  reports  have  been  presented,  and  it  will  be  noted  that 
some  of  the  Sub-Committees'  reports  are  not  in  line  with  each  other.  I 
want,  therefore,  to  suggest  the  necessity  of  having  all  individual  Com- 
mittee's or  Sub-Committees'  reports  considered  by  a  General  Committee 
before  being  presented  to  the  Congress,  in  order  that  single  definite 
recommendations  can  be  made. 

It  is  not  difficult  to  make  recommendations  for  standard  practices,  but 
it  is  going  to  be  hard  to  convince  all  of  the  members  of  this  organization 
that  the  standards  recommended  are  correct,  and  will  result  in  economies. 
It  is  one  thing  to  make  standard  practices,  and  another  to' get  members 
to  agree  to  follow  them,  and  unless  this  is  done  there  is  no  value  in  estab- 
lishing standard  practices.  It  has  been  the  experience  of  a  large  number 
of  associations  that  the  best  way  to  educate  men  to  the  use  of  standards  is 
to  introduce  theme  as  recommended  practices.  This  has  two  advantages: 
The  practice  is  not  compulsory  until  it  is  proved  correct.  When  once  the 
correctness  of  a  principal  is  established  and  understood,  there  will  be  no 
difficulty  in  getting  members  to  subscribe  to  it.  It  is,  therefore,  earnestly 
recommended  that  all  of  the  suggested  standards  be  adopted  first  as  Rec- 
ommended Practices,  and  in  order  that  you  may  know  that  members  are 
willing  to  agree  to  follow  them,  it  is  further  recommended  that  each 
Practice  be  submitted  to  each  member  in  the  form  of  a  letter  ballot.  If 
your  Recommended  Practices  are  correct,  your  ballots  will  all  be  voted  for, 
and  when  your  members  vote  for  them  then  will  they  be  willing  to  agree 
to  them. 

Mine-Cars  Easily  Standardized 

I  am  pleased  to  talk  about  the  practicability  of  standardizing  mine-car 
equipment  for  two  reasons:  (1)  because  of  my  association  with  the 
Industrial  Car  Manufacturers'  Institute;  and  (2)  because  I  personally 
believe  thoroughly  in  the  economies  of  standardization. 

The  Industrial  Car  Manufacturers'  Institute  is  really  a  get-together  as- 
sociation of  a  number  of  the  manufacturers  of  industrial  cars;  to  procure 
economical  results;  promote  a  spirit  of  co-operation  among  its  members; 
provide  means  for  interchange  of  views  effecting  industrial  car  building 
interests;  to  provide  means  for  discussion  of  live  topics;  to  preserve 
equitable  conditions  not  only  in  the  workshop,  but  in  selling  practices; 
and  to  standardize  designs  and  specifications  and  bring  about  a  uni- 
formity in  method  of  inspection,  purchase,  etc. 

Much  of  the  work  that  has  been  accomplished  by  this  Institute  is  the 
adoption  of  Recommended  Practices  in  industrial  car  construction,  which 
will  eventually  lead  to  real  standardization  in  construction.  About  the 
details  of  that  I  will  tell  you  more  a  little  later.  Whenever  large  work 
is  undertaken,  or  a  multiplicity  of  interests  are  combined,  standardization 
follows,  which  inevitably  results  in  many  economies.  The  Master  Car 
Builders'  Association  was  formed  about  1872,  and  a  great  amount  of  work 
has  been  accomplished  by  it  in  the  way  of  standardizing  freight-car  equip- 
ment for  interchange  throughout  the  United  States.  At  the  present  time, 
practically  all  of  the  parts  of  freight-cars  requiring  extensive  renewal  or 


242  REPORT  OF  PROCEEDINGS 

repairs  are  standard  throughout  the  country  for  the  several  types  and 
capacities  of  cars.  The  result  of  this  is  that  if  a  Pennsylvania  Railroad 
car  needs  a  new  pair  of  wheels,  or  a  new  coupler,  or  a  new  journal  bear- 
ing, when  the  car  is  in  Denver  or  San  Francisco,  the  repair-men  at  that 
point  make  the  necessary  renewal  of  the  same  sizes  and  kinds  of  mate- 
rials that  are  being  used  by  the  owning  road.  It  can  be  readily  realized 
what  it  would  mean  to  keep  freight-cars  running  over  all  this  country  if 
every  railroad  had  to  keep  repair  parts  for  every  other  company's  cars 
which  come  into  that  particular  territory.  I  talk  particularly  of  cars,  be- 
cause they  seem  to  be  more  apropos  of  the  coal  mine-car  problem. 

Standard  Sizes  of  Steel  Products 

The  question  of  standardization,  however,  applies  to  practically  all 
modern  business  methods.  It  applies  to  steel  production,  and  to  the 
manufacture  of  almost  any  article  that  is  generally  used  throughout  the 
country.  Where  would  we  be  if  pipe  sizes,  fittings,  and  treads,  were  not 
standardized?  We  must  all  acknowledge  it  would  be  very  inconvenient 
if  electric-light  bulbs  were  not  standardized  throughout  the  country. 
Large  department  stores  have  their  standards;  many  order-houses  have 
theirs;  and  in  fact  in  almost  any  walk  of  life  standards  of  one  kind  or 
another  have  been  adopted  and  are  in  daily  use. 

While  the  question  of  details  for  freight-cars  has  been  generally  stand- 
ardized, for  the  construction  of  industrial  car  equipment,  particularly 
when  gages  other  than  that  of  the  standard-gage  railroads  are  considered, 
there  are  really  no  standards  at  the  present  time. 

The  Industrial  Car  Manufacturers'  Institute '  is  composed  of  members 
who  build  industrial  cars.  This  membership  is  sub-divided  into  groups 
and  one  of  these  groups  represents  the  builders  of  coal  mine-cars.  One  of 
their  particular  desires  is  to  standardize,  just  as  far  as  possible,  mine-car 
construction,  for  their  own  economies  and  in  order  to  produce  coal  mine- 
cars  that  will  give  the  best  of  service.  At  the  present  time  there  are  many 
hundreds  of  coal  mines  in  operation  which  could  use  cars  of  exactly 
similar  design,  where  the  operating  conditions  are  practically  the  same. 
If  a  standard  car  can  be  adopted  to  give  a  maximum  service,  it  will  cer- 
tainly of  great  advantage  to  the  mine-car  operator,  because  he  gets  the 
best  car  that  can  be  designed,  and  because  these  cars  and  their  parts  can 
be  made  in  larger  quantities  the  cost  is  going  to  be  materially  reduced. 
At  the  present  time  there  are  scarcely  any  two  car-builders  or  any  two 
engineers  who  manufacture  or  design  the  same  type  of  a  mine-car  wheel. 
There  is  certainly  one  tread,  one  flange,  and  one-weight  wheel  for  a  given 
capacity  car  that  will  give  the  maximum  service.  At  the  present  time 
there  are  hardly  any  two  alike.  Some  designs  are  good;  some  designs 
are  bad;  some  wheels  are  too  light  for  the  service,  and  others  are  so 
heavy  that  unnecessary  weight  is  being  dragged  around.  This  same 
feature  applies  to  sizes  of  axles  and  journals,  sizes  and  shapes  of  belts  or 
binders,  sizes  and  heights  of  couplers,  etc.,  the  manufacturer  has  to  make 
innumerable  patterns  for  castings,  innumerable  forms  for  making  car 
irons  of  many  shapes  and  sizes.  In  order  to  supplv  demands  they  have  to 


THE  AMERICAN  MINING  CONGRESS  243 

carry  in  stock  quantities  of  these  many  different  types  and  sizes.  When 
these  parts  are  all  standardized,  and  by  that  I  do  not  necessarily  mean 
simply  one  standard  for  all  kinds  of  service  and  for  all  operating  condi- 
tions, but  I  do  mean  that  there  are  standards  that  can  be  produced  that 
will  meet  your  operating  conditions  and  that  will  give  you  many  and 
lasting  economies. 

Recommended  Practices  Adopted 

Up  to  the  present  time  the  Industrial  Car  Manufacturers'  Institute  has 
adopted  Recommended  Practices  covering  specifications  for  materials  that 
will  be  used  in  mine-car  construction;  a  factor  of  safety  for  these  mate- 
rials;  they  all  compute  the  capacity  of  cars  in  the  way;  they  all  use 
the  same  weights  for  gas  coals,  low  volatile  coals,  and  anthracite  coals, 
in  computing  the  capacity  of  their  cars;  they  have  decided  upon  the 
proper  size  bolts  and  rivets,  car  irons,  etc.,  which  should  be  used  in  cars 
of  varying  capacities;  they  now  use  a  standard  specification  or,  called  by 
a  better  term,  a  questionnaire  for  the  purchaser  of  mine-car  equipment; 
they  are  prepared  to  make  recommendations  covering  the  best  practice 
for  gage  or  track,  curvature  of  track,  wheel-base  of  cars,  wheel  diameters, 
and  so  forth. 

You  have  a  Committee  on  the  Standardization  of  Underground  Trans- 
portation which  has  made  a  report  to  this  Convention.  The  members  of 
the  Committee  had  a  number  of  meetings,  and  have  devoted  much  time 
and  thought  to  the  question  of  standardization.  They  have  made  a  few 
definite  recommendations  covering  new  installations.  Some  of  you  may 
have  been  startled  by  these  recommendations,  which  are  far-reaching. 
When,  however,  you  consider  the  real  inwardness  of  the  report  and  the 
step  that  it  is  going  to  be,  I  trust  that  you  will  all  give  the  several  ques- 
tions your  mature  consideration.  When  you  do  this  I  feel  sure  that  the 
recommendations  of  this  Committee  will  be  unanimously  adopted. 

For  the  Industrial  Car  Manufacturers'  Institute  I  can  say  that  we  will 
be  glad  to  work  along  with  your  Committees,  your  operators,  your  mine 
superintendents,  and  your  engineers,  in  the  endeavor  to  establish  stand- 
ards in  mine-car  construction,  which  will  give  to  the  operators  the  most 
efficient  and  the  most  economical  coal  mine-cars  that  can  be  produced. 


244  REPORT  OF  PROCEEDINGS 

Following  is  the  brief  of  discussion  on  the  Report  of  the  Sub- 
Committee  on  Underground  Transportation  by  the  Chairman  of 
the  General  Committee: 

This  Sub-Committee  was  fortunate  in  having  its  Chairman  present, 
who  read  the  report  and  offered  the  following  brief  explanation  regarding 
the  work  of  the  Committee: 

Composition  of  Committees 

Mr.  Watts  explained  that  his  Committee  was  composed  of  men  repre- 
senting the  operating  branch  of  the  industry,  consulting  mining  engineers, 
and  manufacturers,  and  that  therefore  his  Committee  was  quite  repre- 
sentative of  the  industry.  He  further  advised  that  the  Committee  had 
many  interesting  meetings,  and  he  had  discussed  at  great  length  all  the 
subjects  covered  in  the  report,  and  therefore  the  recommendations  rep- 
resented a  great  deal  of  earnest  thought  on  this  subject. 

Mr.  Ebe  inquired  whether  the  Committee  in  making  the  recommenda- 
tions on  track  gages  had  taken  into  consideration  the  methods  of  mining 
by  long-wall  system  in  the  northern  fields,  and  Mr.  Watts  replied  that 
their  recommendations  were  applicable  for  that  system  of  mining. 

Mr.  Milliken  first  called  attention  to  the  fact  that  different  track  gages 
were  recommended  in  another  Sub-Committee's  report  than  those  in  the 
report  under  discussion,  and  in  this  connection  pointed  out  the  necessity 
for  co-ordinating  these  reports.  He  made  the  additional  suggestion  that 
instead  of  at  first  adopting  standards,  it  might  be  well  to  submit  to  the 
industry  'Recommended  Practices,'  and  in  this  manner  lead  up  later  to 
standards.  He  also  stated  that  he  did  not  agree  with  some  criticism  that 
had  been  offered  by  others  regarding  the  lack  of  co-operation  on  the  part 
of  manufacturers  to  improving  and  standardizing  mining  equipment,  and 
he  stated  that  the  car  manufacturers,  and  particularly  those  of  coal  mine- 
cars,  are  looking  forward  earnestly  to  an  adoption  of  recommended  prac- 
tices which  will  eventually  become  standards.  He  stated  further  that  the 
Industrial  Car  Manufacturers'  Institute  is  divided  into  groups  and  one  of 
these  groups  is  devoted  to  the  construction  of  mine-cars.  This  group  has 
done  a  great  deal  of  good  work  in  the  way  of  adopting  recommended 
practices  for  a  good  many  details.  Mr.  Milliken  advised  that  if  this 
Standardization  Conference  would  adopt  standards,  or  recommend  good 
practices,  the  car  manufacturers  would  be  glad  to  follow  them. 

Work  of  National  Safety  Council 

Mr.  Hall,  representing  the  National  Safety  Council,  advised  that  the 
Council  was  interested  in  the  safety  of  machinery  as  well  as  practices 
around  mines,  and  that  the  Council  had  done  a  great  deal  of  good  work 
in  trying  to  promote  improved  and  safe  practice.  He  stated  that  the 
Council  felt  it  had  not  had  proper  recognition  by  not  being  given  appoint- 
ments on  the  Standardization  Committees.  He  thought  this  was  doubtless 
an  oversight,  or  based  on  the  presumption  that  the  men  in  the  National 
Safety  Council  were  too  busy  to  attend  committee  meetings. 


THE  AMERICAN  MINING  CONGRESS  245 

He  also  advised  that  the  Council  had  arranged  with  the  U.  S.  Bureau  of 
Mines  to  secure  the  services  of  Mr.  C.  E.  Juraden,  who  would  be  detailed 
to  the  Mining  Division  of  the  Council's  work,  and  are  ready  to  co-operate 
with  our  Standardization  Committees. 

Mr.  Riser  closed  the  discussion  by  calling  Mr.  Hall's  attention  to  the 
fact  that  the  American  Mining  Congress  has  a  special  committee  on 
Safety  Codes,  which  Committee  is  composed  of  one  member  from  each 
of  the  Sub-Committes  on  Standardization,  and  that  this  Committee  was 
appointed  with  the  intention  that  it  should  act  in  a  joint  capacity  be- 
tween the  various  Sub-Committees  on  Standardization  and  the  National 
Safety  Council,  or  any  other  organization  interested  in  this  work  of 
Standardization. 

Replying  further  to  Mr.  Hall's  suggestion  that  the  National  Safety 
Council  was  anxious  to  co-operate  in  this  work,  and  to  have  representa- 
tives on  our  Standardization  Committees,  we  have  to  advise  that  the 
Chairman  of  your  General  Committee  has  had  conferences  with  Mr.  Wil- 
liams, chief  engineer  of  the  National  Safety  Council,  on  this  subpect,  and 
advised  him  that  we  were  anxious  to  have  its  co-operation.  However,  it 
seems  that  the  pressure  of  other  matters  has  prevented  them  from  giving 
us  much  assistance  so  far.  It  is  our  earnest  desire,  however,  to  have  such 
co-operation,  and  another  effort  will  be  made  to  secure  it. 

Recommendations  Require  Consideration 

We  wish  particularly  to  call  attention  to  the  fact  that  this  Sub-Com- 
mittee gave  first  attention  to  improved  and  standard  practices,  and  that 
many  of  their  meetings  were  devoted  to  these  broader  subjects  and  that  in 
their  report  they  make  a  few  recommendations  which  should  have  the 
earnest  consideration  of  the  industry. 

The  adoption  of  the  practices  recommended  by  this  Committee  in  open- 
ing up  of  new  mines,  or  the  resuscitation  of  old  mines  would  be  of  very 
great  benefit  not  only  to  the  industry  but  to  manufacturers  also. 

MR.  SCHOLZ:  We  will  now  have  the  paper  on  Ventilation  by  Mr.  W. 
J.  Montgomery.  [He  was  not  present,  but  Mr.  Rowe  of  the  American 
Blower  Co,  who  disagreed  with  most  of  it,  gave  a  resume.  The  report 
has  since  been  revised  somewhat.] 


24G  REPORT  OF  PROCEEDINGS 

Following  is  the  Report  of  the  Sub-Committee  on  Standardiza- 
tion of  Mine  Ventilation,  signed  by  Mr.  Montgomery: 

As  Chairman  of  the  Sub-Committee  on  Standardization  of  Mine  Ven- 
tilation equipment,  I  am  pleased  to  submit  the  following  recommenda- 
tions, with  a  view  of  establishing  this  important  factor  of  the  great 
mining  industry  on  a  higher  plane  where  it  rightly  belongs. 

The  suggestions  as  set  forth  in  this  report  have  not  been  approved  by 
the  various  members  of  the  Sub-Committee,  but  they  were  taken  from 
letters  reecived  from  the  members  and  other  data  compiled  by  your  chair- 
man. The  general  opinion  was  expressed  that  there  is  not  much  room  to 
standardize  fans  when  they  must  be  built  to  meet  every  condition  found 
in  the  mining  field.  However,  we  believe  there  is  a  large  field  before  us 
in  the  way  of  presenting  mine  ventilation  data  with  a  view  of  impressing 
those  in  charge  of  this  important  work  with  the  great  necessity  of  pro- 
viding large  air-ways  and  keeping  them  free  from  obstructions  throughout 
the  life  of  the  mine.  This  report  will  deal  with  recommendations  as  to 
fan  installation,  boosters,  air-ways,  and  velocities. 

The  following  is  recommended  for  fan  installations: 

1.  That  for  all  gaseous  mines  there  should  be  an  auxiliary  fan  installed 
with  drive  complete. 

2.  That  for  all  non-gaseous  mines  at  least  an  auxiliary  drive  should  be 
provided. 

3.  That  the  driving  'power  for  the  auxiliary  equipment  should  be  from 
a  different  source  than  that  for  the  main  drive,  especially  so  if  electric 
drives  are  employed. 

4.  That  all  fans  be  made  fireproof.    No  combustible  material  should  be 
used  for  the  installation. 

5.  That  there  be  a  maximum  outlet  velocity  into  the  open  atmosphere, 
varying  with  the  water-gauge  against  which  the  fan  is  operating. 

6.  That  there  be  a  maximum  inlet  velocity  to  the  fan  varying  with  the 
water-gauge  against  which  the  fan  is  working. 

7.  That  all  fans  for  gaseous,  and  large  non-gaseous  mines  be  so  con- 
structed that  they  can  be  readily  reversed. 

8.  That  fans  should  hot  be  reversed  under  any  circumstances,  unless 
conditions  inside  the  mine  are  thoroughly  known. 

10.  That  in  case  of  moderate  to  large  capacity  mines  it  is  advantageous 
to  the  operator  to  install  a  permanent  fan  at  the  beginning  of  operation, 
and  that  where  the  fan  is  not  too  far  placed  from  the  boiler-house,  a 
steam-engine  drive  is  better  adapted;  this  because  it  is  more  economical 
than  an  electric  drive,  and  because  the  speed  of  the  fan  is  more  easily 
regulated.  Where  electricity  is  the  power  employed  at  a  mine  with  a 
large  fan,  we  recommend  a  slip-ring  motor  in  preference  to  a  squirrel- 
cage  type. 


THE  AMERICAN  MINING  CONGRESS  247 

11.  That  if  a  temporary  fan  is  installed,  it  should  be  so  placed  that 
|  the  installation  of  the  permanent  fan  will  not  interfere  with  the  opera- 
jtion  of  the  temporary  one. 

12.  That  all  fan  installations  be  equipped  with  a  regular  U-tube  water- 
gauge. 

Booster-Fans 

1.  That  they  are  recommended  for  use  in  mines  where  a  section  is  so 
remote  as  to  become  insufficiently  ventilated  and  where  a  permanent  fan 

ion  the  outside  is  in  use,  but  we  do  not  approve  of  the  use  of  a  booster 
•  fan  as  the  only  source  of  ventilation,  that  is  a  permanent  fan  should  be 
ion  the  outside. 

2.  That  the  brattice  and  booster  fan  installation  be  made  absolutely 
fireproof. 

3.  That  a  by-pass  door  be  made  in  the  brattice  of  ample  size  to  permit 
sufficient  volume  to  pass  without  going  through  the  booster. 

4.  That  the  by-pass  door  should  always  swing  in  the  direction  of  the 
air  current. 

5.  That  the  moter  driving  the  booster-fan  be  provided  with  an  auto- 
matic  starter. 

Air- Ways 

With  respect  to  the  air-ways,  we  believe  that  no  mine  should  be  per- 
jmitted  to  get  into  such  a  condition  as  to  require  a  water-gage  of  over  3 
'inches  to  ventilate  it  properly,  and  as  a  means  to  this  end  we  recommend 
the  following: 

1.  That  all  air-ways  be  driven  straight,  and  where  changes  in  direc- 
tion are  necessary,  they  be  made  by  long  radius  curves. 

2.  That  an  easement  be  provided  at  the  bottom  of  the  fan  air-shaft  to 
1  enable  a  change  of  direction  with  a  minimum  of  shock. 

3.  That  all  air-ways  be   kept   clean   and   free  from  accumulations   of 
falls,  mine-cars,  old  timbers,  etc. 

4.  That  where  overcasts  are  used,  the  air-ways  over  the  bridge  be  of 
•the  same  cross-section  as  found  in  the  entries  and  that  an  easement  be 
i provided  on  each  side  of  the  bridge. 

5.  That  in  the  interest  of  both  safety  and  economy  the  air  be  divided 
.into  several  splits  rather  than  forced  to  travel  in  one  continuous  current. 

6.  That  all  brattices  and  stoppings  be  made  air-tight. 

7.  That  the  air  shall  not  pass  through  old  workings  to  new  workings. 

8.  That  wherever  possible  in  a  mine,  air  be  brought  in  or  discharged 
from  openings  at  points  remote  from  the  fan. 

9.  That  where   labor  and   roof  conditions  permit,   the   multiple-entry 
system  be  used. 


248  REPORT  OF  PROCEEDINGS 

10.  That  a  change   in  the  laws   governing  crosscuts   be   enacted  per- 
mitting parallel  entries  to  be  driven  200  ft.  or  more  before  a  crosscut  is 
made;  the  ventilation  of  these  entries  to  be  accomplished  by  means  of 
small   auxiliary   fans   and   the   air   current   carried,  to  the   face   through 
tubing. 

This  method  will  ensure  a  copious  supply  at  the  face  at  all  times, 
reduce  the  cost  of  miking  numerous  cuts  and  building  stoppings,  prevent 
a  vast  amount  of  air  leakage  and  short  circuiting,  and  in  turn  greatly 
reduce  the  volume  of  air  the  permanent  fan  must  handle  with  a  corre- 
sponding decrease  in  power  consumption. 

11.  That  where   stoppings   are   built,   they   should  be   constructed   of 
masonry.     Piling  of   gob  material  against   masonry  stoppings  should  be 
avoided.     Stoppings  should  be  inspected  frequently. 

12.  That  the  splits  should  be  made  close  to  the  intake,  and  the  several 
branches  united  again  close  as  possible  to  the  outlet. 

13.  That  there  should  be  a  free  and  unobstructed  inlet  and  outlet  for 
the  air.     Haulways  and  hoisting  shafts  offer  too  much  obstruction. 

Air  Velocities 

In  respect  to  the  velocity  of  air  currents,  the  following  is  recommended: 

1.  That  the  velocity  in  the  main  entries  shall  not  exceed  1000  ft.  per 
minute. 

2.  That  the  velocity  at  face  of  workings  shall  not  exceed  300  ft.  per 
minute. 

3.  That  the  velocity  in  the  air-shaft  or  drift  shall  not  exceed  2000  ft. 
per  minte. 

General   Conclusions 

It  is  the  opinion  of  your  Chairman  that  a  system  of  educational  work 
should  be  started  relative  to  the  operation  and  duties  performed  by  mine- 
fans.  There  appears  to  be  a  woeful  lack  of  data  and  knowledge  of  the 
subject.  Hundreds  of  mine-fans  are  condemned  by  their  users  as  well  as 
by  many  mine  inspectors  simply  because  the  mine  will  not  pass  the  air 
at  a  reasonable  pressure.  The  fan  may  have  a  normal  capacity  of  200,000 
cu.  ft.  at  3-in.  gage,  but  the  mine  capacity  is  only  100,000  cu.  ft.  at  3-in. 
gage,  hence  only  100,000  cu.  ft.  is  obtained  at  this  pressure.  The  mine 
acts  as  a  regulator  on  the  fan,  therefore,  no  matter  how  large  a  duty  is 
specified  for  the  fan,  only  100,000  cu.  ft.  is  obtained  at  3-in.  gage. 

It  is  a  fact  that  you  find  many  large  mines  with  not  over  3  or  4  years' 
development  offering  2-in.  pressure  for  100,000  cu.  ft.  The  main  object  of 
the  operator  is  to  get  out  a  big  tonnage  and  the  air-ways  are  often  neg- 
lected. He  will  pay  a  high  penalty  in  the  future  in  the  way  of  power 
bills  and  trouble  to  get  sufficient  air  to  the  face  of  the  workings.  It  is  the 
duty  of  the  mine  inspector,  and  those  in  charge  of  this  important  work, 
to  keep  a  watchful  eye  on  the  mine  resistance,  and  demand  that  large 
air-ways  be  provided  and  maintained  at  all  times.  The  whole  trouble  is 


THE  AMERICAN  MINING  CONGRESS  240 

due  to  the  fact  that  many  operators  think  it  is  cheaper  to  purchase  a  new 
fan  than  maintain  good  air-ways.  They  do  not  realize  that  the  new  fan, 
which  they  contemplate  purchasing,  cannot  produce  any  more  air  at  the 
given  pressure  than  the  old  one.  The  mine  resistance  is  a  charactertistic 
of  the  mine  and  has  absolutely  nothing  to  do  with  the  fan.  The  table 
below  emphasizes  clearly  the  importance  of  maintaining  large  air-ways 
at  all  times: 

Perimeter 
Power  varies  as  - 

Cube  of  area 

Relative  Powers  Making 
Size  of  air-ways.          Perimeter.  Area.    Air-way  10  by  10  =  10  h.  p. 

10  by  10  40  100  10.0 

8  by     8  32  64                      30.5 

7  by     7  28  49  59.5  ' 

6  by     6  24  36  128.5 

5  by     5  20  25  320.0 

It  will  be  noted  from  the  table  that  if  it  requires  10  h.  p.  for  an  air- 
way of  100  sq.  ft.,  it  will  require  about  6  times  this  amount  for  an  air-way 
one-half  this  size. 


Following  is  a  Brief  of  the  Discussion  of  the  Report  of  Sub- 
Committee  on  Standardization  of  Mine  Ventilation  by  the  Chair- 
man of  the  General  Committee: 

The  Chairman  of  this  Sub-Committee  not  being  present,  the  report 
of  the  Committee  was  presented  by  Mr.  Rowe,  one  of  the  members  of  the 
Committee. 

From  a  reading  of  the  transcript  of  the  proceedings  of  this  session  of 
the  Standardization  Conference,  it  would  appear  that  Mr.  Rowe  did  not 
read  the  report  and  then  discuss  it,  but  proceeded  to  take  exceptions  to 
the  conclusions  and  recommendations  contained  in  the  report.  We  think 
that  was  an  unfortunate  way  to  present  the  paper,  as  it  did  not  give  the 
members  of  the  Conference  an  opportunity  to  obtain  a  correct  under- 
standing of  the  report  of  the  Committee,  or  even  to  understand  properly 
the  criticisms  of  the  report  made  by  Mr.  Rowe. 

Mr.  Rowe  states  that  he  understood  this  Committee  was  to  deal  with 
ventilating  apparatus,  rather  than  the  question  of  mine  ventilation, 
whereas  most  of  this  report  dealt  with  mine  ventilation,  air-ways,  etc. 
It  is  only  proper  to  state  in  this  connection  that  the  report  of  this  Com- 
mittee is  in  accordance  with  the  general  instructions  issued  to  the  Com- 
mittee, and  is  also  in  accordance  with  the  policy  adopted  by  the  General 
Committee  on  Standardization  of  mining  practice  and  equipment  at  its 
first  conference  in  St.  Louis.  While  all  Sub-Committees  have  not  always 
adhered  faithfully  to  this  recommendation  of  the  General  Committee,  it 


250  REPORT  OF  PROCEEDINGS 

has  been  the  general  policy,  and  still  is  the  policy,  to  try  to  improve  min- 
ing practice  in  the  larger  and  broader  sense  of  the  term.  When  this 
practice  is  improved  and  made  more  uniform,  that  is  Standardization  in 
its  best  sense;  then  will  follow  standardization  of  equipment  and  machin- 
ery as  far  as  it  is  practical  to  standardize  such  equipment.  The  report 
of  this  Sub-Committee  is  not  only  "in  accordance  with  the  policy  of  the 
General  Committee,  but  contains  valuable  and  constructive  suggestions, 
and  deserved  better  attention  than  it  happened  to  receive  on  account  of 
the  way  in  which  it  was  presented.  This  misfortune  seems  to  have 
prevented  any  discussion  following  by  members  of  the  conference. 

We  will  close  the  review  of  this  report  by  suggesting  that  the  Com- 
mittee should  be  organized,  as  the  Chairman  admits  that  he  has  never 
been  able  to  secure  a  meeting  of  his  Committee,  and  has  had  to  prepare 
his  report  .from  information  he  gained  by  correspondence  with  the 
members. 


Report  of  Sub-Committee  on  the  Standardization  of  Mine  Drain- 
age, signed  by  George  R.  Wood: 

In  regard  to  Standardization  of  Drainage  Apparatus  for  coal  mining, 
I  have  written  my  Committee  members  as  to  their  views,  and  regret  to 
report  an  almost  total  lack  of  constructive  suggestions  as  to  possibility 
of  any  appreciable  measure  of  uniformity  in  design,  construction  or 
aplication  of  such  apparatus.  This  appears  to  follow  from  a  belief  that 
requirements  are  specialized  to  a  degree,  similar  to  ventilating  appaartus. 
I  have  been  able  to  talk  personally  only  with  Mr.  Knight,  of  Kayford, 
W.  Va.,  and  the  recommendations  following  may  be  taken  therefore  as 
our  joint  position  in  the  premises: 

Safety 

All  gears  to  be  enclosed  or  completely  guarded. 

No  projecting  keys  or  set-screws  to  be  used  on  revolving  parts.  Self- 
oiling  bearings  recommended  wherever  possible. 

Enclosed  motors  preferred. 

Motors  up  to  iy<2  h.  p.,  a.  c.  or  d.  c.,  should  be  self-starting,  with  en- 
closed switch. 

For  larger  motors,  enclosed  rheostats  or  compensators  are  preferred. 

Voltage  not  exceeding  250  d.  c.,  or  220  a.  c.,  recommended  for  under- 
ground work,  except  for  large  motors  (over  150  h.  p.)  where  440  a.  c.  is 
recommended,  in  which  case,  as  with  500-volt  d.  c.  system  conduit  wiring 
is  urged. 

All  gears  to  be  enclosed  or  completely  guarded. 


THE  AMERICAN  MINING  CONGRESS  251 

Design 

In  plunger  or  piston  pumps,  the  only  stock  pumps  manufactured  ap- 
pear to  be  small  gathering  pumps,  usually  30  to  60  g.  p.  m.  capacity, 
against  varying  heads  not  exceeding  100  ft.  Each  manufacturer,  not 
unreasonably,  objects  to  any  modification  of  his  design.  We  believe, 
however,  that  we  should  recommend  that  these  pumps  should  be  built  as 
standard  for  100  ft.  head  instead  of  30,  60,  etc.  Motor  horsepower  should 
be  double  the  theoretical  horsepower  of  pump  capacity.  Pinions  should 
be  of  fiber,  leather,  or  paper  to  reduce  vibration  injurious  to  motor  wind- 
ings. We  do  not  favor  present  tendency  to  large  valve  areas  in  these 
pumps  to  reduce  friction,  since  the  power  consumption  is  usually  negli- 
gible, and  would  prefer  less  area  with  higher  velocity  and  higher  valve- 
lift  to  ensure  passage  of  solid  particles  through  the  pumps  instead  of 
stopping  under  the  valves.  This  idea,  however,  is  at  variance  with  that 
of  most  designers,  and  needs  discussion  by  those  interested. 

Construction 

This  detail  does  not  seem  to  require  our  consideration,  for  the  reason 
that  there  are  numerous  builders  of  satisfactory,  efficient,  and  rugged 
pumping  machinery  of  all  required  types,  and  we  believe  the  (tempo- 
rarily) obsolete  law  of  supply  and  demand  will  again  function  to  elim- 
inate the  unfit. 

We  would  recommend  merging  this  Committee  with  that  on  Ventila- 
tion, as  a  simplification  of  the  General  Committee  work,  and  because  of 
the  limited  field,  as  we  view  it,  for  standardization  in  pumping  or 
drainage. 


Review  of  Report  by  Sub-Committee  on  Standardization  of  Mine 
Drainage  by  the  Chairman  of  the  General  Committee 

I  am  constrained  to  make  the  following  comments  on  the  Report  of 
our  Sub-Committee  on  Mine  Drainage  for  the  reason  that  I  disagree 
with  the  introductory  paragraph  in  the  report  of  this  Sub-Committee. 
The  members  of  this  Committee  seem  to  have  an  entirely  wrong  concep- 
tion as  to  their  duties.  I  draw  this  conclusion  from  their  statement: 

"And  regret  to  report  an  almost  total  lack  of  constructive  sugges- 
tions as  to  possibility  of  any  appreciable  measure  of  uniformity  in 
design,  construction,  or  application  of  such  apparatus." 

This  statement  indicates  that  this  Committee  was  endeavoring  to 
simply  standardize  mine  pumps  instead  of  trying  to  improve  the  practice 
regarding  mine  drainage.  Anyone  who  is  familiar  with  the  drainage  of 
the  great  majority  of  coal  mines  in  this  country  will  appreciate  that  there 
is  ample  opportunity  for  such  improvement.  It  seems  to  us  that  this 
Committee  could  find  a  large  field  of  usefulness  by  preparing  a  construc- 
tive program  for  the  drainage  of  coal  mines.  This  program  should 
include  instructions  for  the  drainage  of  the  mine  along  modern  and 


252  REPORT  OF  PROCEEDINGS 

economical  lines,  and  should  include  all  the  general  specifications  required 
for  the  proper  carrying  out  of  such  instructions.  These  specifications 
should  cover  in  general  the  drainage  equipment  required,  together  with 
the  proper  method  of  installation,  operation,  etc. 

The  efforts  which  were  already  put  forth  by  this  Committee,  as  indi- 
cated by  their  report  should  follow  such  a  program  as  suggested  above, 
and  not  precede  it,  as  the  suggestions  contained  in  their  report  relate 
only  to  details  and  not  to  the  large  constructive  features  of  the  improve- 
ment in  standardization  of  mining  methods  and  equipment.  It  would 
therefore  seem  to  the  Chairman  of  your  General  Committee  that  if  this 
Sub-Committee  does  not  approve  of  the  method  of  approaching  this  work, 
as  outlined  above,  that  in  order  to  harmonize  the  work  of  this  Sub- 
Committee  with  that  of  the  other  sub-committees  in  the  Coal  Mining 
Branch,  thai  this  Sub-Committee  should  be  reorganized  with  this  object 
in  view. 

Adjournment. 


THE  AMERICAN  MINING  CONGRESS  253 

METAL  MINING  SECTION,  STANDARDIZATION  COMMITTEE 

American  Mining  Congress 
PRELIMINARY  COMMITTEE  MEETINGS,  NOVEMBER  14,  1920 

Mr.  Chas.  A.  Mitke  presided. 

The  meeting  was  opened  by  the  Chairman  presenting  a  brief  outline  of 
the  possibilities  of  standardization  in  metal  mining. 

Inasmuch  as  the  majority  of  those  present  were  interested  chiefly  in 
the  work  of  the  Sub-Committee  on  the  standardization  of  drilling  ma- 
chines and  drill-steel,  the  discussion  that  followed  was  confined  prin- 
cipally to  this  subject. 

The  question  was  raised  by  the  Chairman  as  to  whether,  if  the  work 
of  the  Committee  was  directed  towards  investigating  the  limits  of  weights 
of  the  various  types  of  machines  that  have  proved  most  satisfactory 
to  the  majority  of  users,  the  results  would  prove  of  material  benefit  both 
to  the  manufacturers  and  operators.  It  was  pointed  out  that  at  the 
present  time  there  are  a  great  many  machines  of  each  type  on  the 
market — such  as  Leyners,  stopers,  and  jackhamers — with  but  slight  varia- 
tions in  weights,  the  difference  in  some  cases  not  being  more  than  a  few 
pounds,  or  in  special  cases  not  more  than  a  few  ounces. 

In  this  connection  some  interesting  statements  were  made.  Mr. 
Leonard,  president  of  the  Denver  Rock  Drill  Mfg.  Co.,  mentioned  that 
members  of  the  mining  profession  probably  do  not  realize  the  enormous 
amount  of  money  a  company  must  spend  to  perfect  a  new  machine. 

Cost  of  Placing  New  Drill  on  Market 

Mr.  Bayles,  chief  designer  of  the  Ingersoll-Rand  Co.,  remarked  that 
it  cost  the  manufacturers  $100,000  to  perfect  a  new  drill  and  place  is  on 
the  market. 

From  the  discussion  which  followed,  it  appeared  that  if  the  number 
of  different  types  of  machines  could  be  reduced  to  a  minimum,  it  would 
be  of  material  benefit  to  the  manufacturers  as  well  as  to  operators. 

One  of  the  difficulties  mentioned  was  the  great  variety  of  air  pressures 
available  in  the  different  mines;  also  that  certain  companies  demand  that 
machines  be  built  to  conform  to  their  own  particular  specifications.  This 
procedure  naturally  results  in  a  great  variety  of  machines. 

A  discussion  then  fololwed  on  the  possibilities  of  the  operators  getting 
together  and  standardizing  their  conditions;  that  is,  classifying  the 
various  kinds  of  ground  met  with  in  metal  mines,  agreeing  on  uniform 
air  pressure,  systematic  lubrication  of  machines,  etc. 


254  REPORT  OF  PROCEEDINGS 


It  was  repeatedly  pointed  out  that  if  hose  connections,  various  minor 
parts,  such  as  bolts,  threads,  etc.,  and  possibly,  chucks,  were  standard- 
ized, this  would  be  of  great  convenience  to  the  operator,  Not  only  could 
these  minor  parts  be  interchanged  on  the  various  makes  of  machines,  but 
if  the  chuck  of  the  jackhamer  were  made  to  correspond  with  that  of  the 
stoper,  steel  would  then  become  interchangeable. 


Meeting  of  Sub-Committee  on  Drilling  Machines  and  Drill-Steel 
NOVEMBER  16,  1920 

The  general  chairman,  Chas.  A.  Mitke,  presided. 

MR.  MITKE:  We  are  fortunate  in  having  with  us  Mr.  Norman  Braly, 
manager  for  the  North  Butte  Mining  Co.,  who  has  done  a  great  deal  of 
work  in  standardization,  and  as  the  Committee  on  Drilling  Machines  and 
Drill-Steel,  of  which  he  is  chairman,  is  just  getting  under  way,  we  would 
like  to  have  him  tell  us  something  about  the  work  that  has  been  sug- 
gested and  what  the  Committee  proposes  to  do. 

Mr.  BRALY:  I  suppose  few  of  us  realize  that  there  is  no  machinery 
manufactured  in  this  country  which  penetrates  foreign  markets  as  far  as 
rock-drills.  I  say  this  because  the  work  of  standardization  in  rock- 
drills  will  necessarily  be  slow,  and  it  would  be  a  mistake  to  rush  into  this 
matter.  That  is  the  danger  of  standardizing  this  type  of  machinery. 

Three  Well-Known  Types  of  Drills 

During  the  last  20  years  there  have  been  three  large  drill-manufac- 
turing companies  in  this  country.  Each  one  has  carried  its  own  standard 
weight;  each  one  has  a  record  of  which  it  is  proud;  and  I  understand 
that  it  will  be  hard  to  get  them  to  adopt  all  the  standards.  However, 
there  are  a  few  things  that  it  would  seem  to  me  they  could  do  to  benefit 
the  mine  operator  here  in  this  country.  It  is  understood  that  when  a 
mine  operator  purchases  a  machine,  he  generally  strips  it  of  all  trim- 
mings, after  which  he  puts  on  standards  of  his  own,  and  send  it  under- 
ground, otherwise,  if  he  gets  it  underground  it  will  not  fit.  We  have 
asked  the  Sullivan  Machinery,  Ingersoll-Rand,  and  Denver  Rock  Drill 
companies  if  it  would  not  be  possible  for  them  to  get  together  and  create 
standard  hose  couplings  and  standard  nuts  on  the  machines,  so  that  when 
they  are  sent  underground  they  will  go  into  place.  As  it  is  now,  there 
is  a  great  deal  of  lost  time  from  men  going  underground  and  having  no 
standard  wrench  to  fit  the  machines,  and  they  have  to  hunt  all  over  the 
mine  for  a  new  part  or  something  of  that  kind;  and  we  believe  that  there 
are  a  few  simple  things  that  can  be  taken  up  at  first  and  standardized, 
which  will  help  us  greatly. 

Each  of  these  drill  manufacturers  have  consented  to  appoint  a  man  to 
a  committee  upon  which  there  will  be  three  or  four  members  of  the  Sub- 


THE  AMERICAN  MINING  CONGRESS  255 

Committee  of  the  American  Mining  Congress  on  drilling  machines  and 
drill-steel.  This  inner  committee,  consisting  of  probably  eight  members, 
will  see  if  some  standards  cannot  be  worked  out;  also  the  other  members 
of  the  drilling  Committee — of  which  there  are  a  large  number — will  also 
give  us  their  co-operation.  I  believe  this  is  the  simplest  way  to  go 
about  it. 

Mine  Operators  Can  Not  Design  Drills 

I  do  not  believe  that  the  mine  operators  themselves  are  capable  of 
designing  these  machines,  or  even  specifying  exactly  what  can  be  done 
with  them.  I  think  we  will  have  to  leave  that  to  the  manufacturer.  I 
really  believe  that  if  we  leave  this  matter  to  the  manufacturers  they  will 
work  out  this  standardization,  and  in  that  way  help  the  operators. 

MR.  MITKE:  Mr.  Arthur  Notman,  who  is  one  of  the  members  of  the 
Drilling  Committee,  has  prepared  a  paper  which  he  will  now  read  to  us, 
after  which  a  general  discussion  will  follow. 

MR.  NOTMAN:  Perhaps  a  word  of  explanation  as  to  how  we  made  this 
investigation  might  not  be  out  of  order:  Just  prior  to  the  outbreak  of  the 
war,  we  had  been  engaged  in  an  attempt  to  standardize  on  one  size  of 
steel— of  one  section — for  use  in  drifting  machines,  plungers,  and  stopers; 
but  during  the  war  we  had  to  abandon  our  experiments.  As  soon  as 
conditions  allowed,  we  started  again.  In  the  meantime  we  had  made  a 
great  deal  of  progress,  as  we  feel,  in  the  matter  of  standardizing  on 
methods  of  driving  headings.  In  the  matter  of  standard  rounds,  timber- 
ing, and  so  on,  most  of  you  who  have  seen  Mr.  Mitke's  papers  on  those 
subjects  have  some  idea  of  what  was  done  in  that  respect  at  Bisbee. 

Having  partly  decided  upon  methods,  we  felt  the  next  step  was  to  take 
up  the  matter  of  equipment,  and  for  the  past  year  we  have  had  our  engi- 
neering office  engaged  in  this  work,  and  this  paper  has  been  prepared 
under  my  direction  by  Mr.  L.  M.  Cummings,  one  of  the  engineers  in  our 
office,  who  has  actually  been  operating  machines  himself  and  has  first- 
hand knowledge  of  the  information  included  in  the  paper. 

We  have  compiled  a  good  many  tables  concerning  sizes  of  bolts,  nuts, 
pipe-threads,  and  so  forth,  which  it  would  be  hardly  worth-while  attempt- 
ing to  read,  but  I  believe  arrangements  can  be  made  whereby  the  mem- 
bers of  the  Committee  and  others  who  are  interested,  may  read  the  paper 
in  printed  form  later  on. 

[Mr.  Notman's  paper  will  be  found  on  page  729  of  the  Proceedings.] 

MR.  MITKE:  We  are  certainly  indebted  to  Mr.  Notman  for  working 
out  such  a  complete  paper,  and  it  has  opened  a  real  field  of  discussion  and 
thought.  I  feel  quite  sure  that  all  of  you  who  are  interested  in  drill- 
ing will  learn  of  a  number  of  interesting  things  which  will  be  worked 
out  under  Mr.  Notman's  direction  within  the  next  year  or  two. 


256  REPORT  OF  PROCEEDINGS 

Limits  In  Steel  and  Drill-Bit 

There  is  something  that  I  would  like  to  ask,  and  that  is  just  when 
may  we  expect  to  reach  the  limit  in  decreasing  the  size  of  the  steel  and 
the  size  of  the  drill-bit — that  is,  the  limit  at  which  speed  will  stop  in- 
creasing, as  it  should,  theoretically?  I  should  like  to  call  on  Mr.  Not- 
man;  I  have  heard  so  many  different  opinions,  claiming  that  so  far  we 
have  not  as  yet  reached  the  limit,  but  as  a  matter  of  fact  are  a  long  way 
from  it.  I  think  that  Mr.  Notman's  figures  and  his  opinion  will  throw 
a  lot  of  light  on  the  subject. 

MR.  NOTMAN:  The  opinion  that  I  started  off  with  was  that  while 
reducing  the  size  of  the  steel  we  should  hope  to  obtain  something  like 
a  theoretical  increase  in  drilling  speed,  due  to  the  smaller  area  of  the 
round  cut;  but  we  discovered  that  the  relative  power  of  the  machine  and 
the  size  of  the  steel  interlocked  so  that  we  did  not  get  a  theoretical 
increase  in  drilling  speed,  when  you  reduced  the  size  of  the  steel  for 
which  the  machine  was  probably  designed,  and  I  am  not  prepared  to 
offer  any  information  on  that  subject.  The  limiting  factor,  if  any,  so 
far  as  the  operator  is  concerned,  is  the  question  of  minimum  size  hole 
in  which  you  can  get  sufficient  powder  to  do  the  work.  Of  course,  it  is 
desirable  to  concentrate  the  powder  at  the  bottom  of  the  bore-hole  as  far 
as  you  can,  and  the  inherent  desire  in  the  miner  for  a  big  hole,  in  order 
to  get  further  down  there,  is  pretty  hard  to  overcome.  They  offer  that 
as  an  objection  to  the  use  of  1-in.  steel  in  drifting;  but,  on  the  other  hand, 
they  have  never  complained  at  all  to  the  use  of  %-in.  steel  in  raising  or 
stoping  conditions,  where  the  importance  is  not  as  great  as  it  is  in  drift- 
ing. I  think  perhaps  some  of  the  drill-men  could  tell  us  about  the  pro- 
portionate condition  of  the  drill  and  the  size  of  steel.  I  would  like  to 
add  that  as  a  matter  of  fact,  we  have  been  using  %-m-  hexagon  steel  with 
a  small  bit,  for  the  stopers,  and  the  work  done  by  one  of  these  modern 
high-speed  stopers  is  just  exactly  as  severe  as  it  is  in  the  case  of  a 
drifting  machine.  The  foot-pound  pressure  is  less,  but  the  actual  work 
done  on  the  steel  is  a  little  more,  I  think,  in  the  case  of  the  newer  stop- 
ers than  drifting  machines.  They  have  been  making  exhaustive  experi- 
ments on  this  point. 

MR.  BAYLES:  We  have  found  that  it  depends  largely  on  the  air 
pressure  and  hardness  of  rock  with  some  of  the  present  day  drills.  Steel 
becomes  bent,  and  you  cannot  afford  to  have  bent  steel;  drilling  falls  off 
often  30%  by  a  slight  bending  of  the  steel.  In  fact,  if  some  of  the  bent 
steel  is  examined  you  would  not  notice  that  it  is  bent;  but  if  you  tested 
it,  it  will  fall  short  20%.  Line  it  up,  and  you  find  that  it  is  bent.  Take 
the  same  steel  and  straighten  it  out  an  the  anvil  and  sharpen  it,  and 
you  get  20%  more  drilling.  I  have  never  been  able  to  understand  why 
that  should  make  steel  drilling  fall  off  so  much;  but  it  does,  invariably. 

MR.  MITKE:  Mr.  Walsh,  is  it  possible  for  you  to  give  us  just  a  brief 
summary  of  some  of  Mr.  G.  H.  Oilman's  ideas,  or  would  you  have  to 
give  practically  the  whole  paper? 


THE  AMERICAN  MINING  CONGRESS  257 

[Mr.  Walsh  then  read  Mr.  Gilman's  paper,  which  views  the  question 
from  the  standpoint  of  a  manufacturer,  appears  on  page  721  of  the 
Proceedings.] 

MR.  JOHN  KIDDIE:  I  might  state  that  we  made  some  tentative  ex- 
periments in  which  we  found  that  the  amount  of  power  necessary  to  drill 
the  holes  depended  on  the  area  of  the  hole,  that  is  to  say,  the  area  of  the 
bit.  Mt.  Notman  seems  to  be  of  the  opinion  that  you  could  reduce  the 
size  of  the  hole  so  as  to  get  powder  enough  in  there  (perhaps,  if  necessary, 
using  stronger  powder),  that  is  to  say,  you  could  get  powder  into  a 
smaller  hole  to  break  the  ground,  provided  you  can  drill  it  with  the  size 
steel,  that  is,  by  hand  bit.  It  is  not  possible  to  improve  the  grade  of  the 
steel  so  that  you  could  use  a  smaller  steel  and  not  have  the  successive 
break. 

MR.  WALSH:  The  point  that  Mr.  Notman  made  was  that  they  get 
better  results  in  some  cases  with  the  bigger  steel  and  bigger  hole. 

MR.  KIDDIE:  Yes,  my  notion  was  that  perhaps  the  big  drifting  ma- 
chines were  too  powerful  for  the  size  of  the  hole. 

MR.  WALSH:  I  would  imagine  with  the  bigger  machine  and  the 
smaller  gage  and  the  smaller  steel  you  could  get  more  penetration,  and 
it  would  affect  your  rotation  so  that  you  could  cut  down  your  drilling 
speed.  Where  you  use  the  larger  steel  it  would  fit  in  to  better  advantage. 
Putting  same  energy  into  the  same  machine  and  using  a  lighter  blow, 
with  not  so  much  penetration  but  a  faster  rotation,  and  you  might  get 
different  results.  As  you  said,  you  might  use  the  wider  machine  with  the 
smaller  steel  and  get  the  same  results. 

MR.  NOTMAN:  We  found  that  with  the  18  Leyner,  cutting  down  from 
the  1*4  in.  to  the  1  in.,  we  got  practically  the  theoretical  increase  in  drill- 
ing speeds,  but  when  we  went  to  the  heavier;  machines — the  248  Leyner, 
or  the  D.  X.  61 — you  do  not  get  that  increase. 

MR.  BAYLES :  There  are  two  things  that  occurred  to  me  which  I  wished 
to  ask  Mr.  Notman:  He  speaks  of  including  in  the  supplies  a  box-wrench 
to  pull  out  the  steel:  Did  he  mean  by  that  that  the  maker  should  carry 
8  or  10  different  types  of  chuck-wrenches,  each  with  a  different  size  box- 
wrench  in  it? 

MR.  NOTMAN:  That  is  exactly  what  I  meant.  I  did  not  intend  to 
put  the  burden  of  the  supplying  of  those  wrenches  upon  the  manufac- 
turers. We  make  our  own  wrenches,  and  probably  will  continue  to  do  so. 

Use  of  the  Box-Wrench 

In  saying  that  we  wanted  to  use  this  box-wrench  for  pulling  out  steel,  it 
often  happens  that  a  drill  cannot  be  withdrawn  readily  when  run  down, 
and  if  a  man  had  a  box-wrench  which  would  fit  behind  the  steel,  a  slight 
turn  of  it  would  free  that  steel  and  he  could  withdraw  it.  The  practice  is 
to  take  a  monkey-wrench  and  stick  that  behind  it,  and  twist  and  pull  at 


258  REPORT  OF  PROCEEDINGS 

the  same  time.  It  is  not  for  extracting  steel  that  is  stuck  in  the  ground, 
but  simply  steel  that  cannot  be  slipped  out  of  the  machine  readily  to 
withdraw  it.  I  think  such  a  wrench  could  be  made  to  fit  any  one  of  these 
sections,  either  a  big  chuck-wrench  or  a  smaller  one.  What  we  want  Is 
two  double-ended  wrenches  to  fit  all  the  parts  which  are  ordinarily  used. 

MR.  WALSH:  Mr.  Notman's  paper  represents  a  lot  of  work,  but  there 
seem  to  be  several  things  that  perhaps  do  not  agree.  You  talk  about 
making  side-rods  and  standardizing  them  at  %  in.  That  may  mean 
changing  all  drop  forgings,  and  a  changing  of  dies,  which  are  extremely 
expensive;  perhaps  it  means  changing  the  G-bolts.  While  I  am  not 
attempting  to  throw  cold  water  on  the  idea,  these  things  are  to  be  con- 
sidered from  the  manufacturers'  standpoint,  on  machines  already  in  the 
field.  It  might  throw  a  big  burden  on  the  manufacturer. 

MR.  NOTMAN:  I  think  that  is  an  important  point.  It  would  not 
throw  the  burden  on  the  manufacturer  alone,  from  the  fact  that  all  the 
users  are  equipped  with  drills  which  have  been  turned  out,  and  not  one 
of  us  can  afford  to  scrap  anything  useful.  It  is  something  that  we  cannot 
hope  to  effect  over  night,  but  if  it  were  a  basis  for  future  designing,  I 
think  we  have  accomplished  a  great  deal. 

MR.  BAYLES:  Mr.  Notman  suggests  in  one  part  of  his  paper  that  the 
nuts  on  the  standard  rods  should  be  square,  while  in  another  he  recom- 
mends a  %-in.  bolt  with  a  standard  rod  and  hexagon  nut.  Is  that  correct? 

MR.  NOTMAN:  I  do  not  know  that  there  is  any  particular  choice  in 
the  matter;  I  believe  that  either  one  would  be  satisfactory. 

MR.  BAYLES:  Being  one  so  easy  to  get  at,  I  think  that  a  hexagon  nut 
would  be  better  on  account  of  not  having  the  sharp  corners  of  the  square 
nut.  I  think  the  hexagon  nut  is  used  today. 

In  Mr.  Oilman's  paper  it  is  said  that  the  minimum  weight  of  a  jack- 
hamer  is  25  to  30  Ib.  on  the  ground.  I  do  not  think  it  is  practical  to 
manufacture  a  serviceable  jackhamer  much  under  30  Ib.  There  have  been 
jackhamers  on  the  market  around  20  Ib.  for  many  years,  but  they  do  not 
appear  to  be  successful,  even  if  one  foreign  jackhamer  that  I  have  seen 
only  weighs  10%  Ib.  That,  I  think  is  rather  light. 


MR.  MITKE:     Yes. 

MR.  BAYLES:  There  was  one  of  19  Ib.  on  the  market  for  a  while 
before  the  war  —  I  do  not  know  how  it  is  since  —  and  it  was  very  good,  but 
of  course  it  would  not  compete  with  the  bigger  tools;  but  for  its  purpose 
it  is  very  satisfactory.  We  have  one  of  20  Ib.  which  has  a  big  demand. 

MR.  NOTMAN:  I  think  it  is  important  not  to  lean  backwards  in 
attempts  to  standardize  on  designs.  I  think  that  is  absolutely  agreed. 
Any  question  of  standardization  that  does  involve  details  of  design  should 
be  given  careful  consideration.  I  think  that  also  applies  to  the  question 
of  weight  of  the  machine.  You  can  never  tell  until  you  have  tried  it 


THE  AMERICAN  MINING  CONGRESS  259 

whether  you  can  get  by  with  a  machine  weighing  a  third  less  than  the 
machine  you  are  using. 

MR.  BAYLES:  No;  the  natural  law  of  supply  and  demand  governs 
weight  of  machines,  without  our  doing  it  here. 

MR.  MITKE:     What  weights  of  small  machines  are  in 'greatest  demand? 

A  MEMBER:  There  are  more  40  or  45-lb.  tools  sold,  though  a  50  or  60- 
Ib.  tool  will  do  more  work. 

A  MEMBER:  I  think  Mr.  Notman's  conclusions  regarding  the  weight 
of  the  drill  and  stand-up  answer  that  question  very  well. 

MR.  BAYLES:  It  would  be  foolish  for  us  to  determine  the  weight  of 
the  tools  for  certain  work  now,  because  we  know  that  five  years  ago  we 
had  an .  idea  that  certain  work  required  a  200-lb.  tool,  which  today  is 
performed  by  a  50  or  40-lb.  tool,  and  two  years  from  now  somebody  may 
be  doing  it  with  one  of  10  pounds. 

MR.  MITKE:  The  changes  are  certainly  remarkable.  Take  one  mine 
where  they  considered  that  the  18  Leyner  was  the  only  machine  to  drill 
the  ground,  and  today  they  just  use  the  jackhamer  and  drill  it  the  same 
as  they  did  then.  That  change  was  made  in  an  entire  mine  within  a  year 
or  a  year  and  a  quarter,  so  we  cannot  help  being  conservative  when  we 
consider  the  future.  Nevertheless,  it  is  interesting  to  forecast  as  near  as 
possible  what  might  be  the  demand,  and  what  the  general  trend  will  be. 

A  MEMBER:  I  think  that  the  trend  is  more  for  light  machines.  The 
very  fact  that  they  are  reverting  to  lighter  steel  means  that  they  must 
place  their  holes  in  the  proper  position  and  get  the  powder  distributed 
properly;  rather  than  drill  a  few  large  holes,  they  should  drill  more  small 
ones  and  get  them  properly  placed.  Such  is  the  secret  of  the  light  drill, 
and  that  is  why  it  is  becoming  more  popular.  I  think  it  will  be  carried 
even  further;  the  tendency  is  for  a  lighter  machine. 

A  MEMBER:  Though  for  shaft  sinking,  for  instance,  we  will  have  to 
use  a  heavier  machine. 

MR.  BAYLES:     But  still  much  lighter. 

A  MEMBER:  I  am  wondering  if  the  mining  companies,  in  trying  to 
get  the  results  we  aim  at,  and  in  placing  so  much  burden  upon  the  rock- 
drill  itself,  whether  they  are  looking  into  the  drilled  steel  and  also  their 
explosives.  I  think  both  should  be  studied.  We  can  get  more  powerful 
explosives,  and  we  can  drill  smaller  holes — that  will  be  increased  efficiency 
all  around — and  also  get  a  bit  that  will  last  longer. 

MR.  MITKE:     I  think  that  it  is  only  a  question  of  time  now. 

A  MEMBER:  Many  times  they  make  a  comparison  in  different  mines, 
but  in  some  they  do  not  take  into  account  the  condition  of  the  drilling 
bits.  .  They  report  so  many  feet  drilled  in  a  given  time.  Possibly  the 
difference  is  entirely  due  to  other  than  the  machine  itself.  The  Copper 


260  REPORT  OF  PROCEEDINGS 

Queen  is  the  only  mine  that  looks  at  a  drilling  bit  to  determine  how  dull 
it  is. 

MR.  NOTMAN:  In  justice  to  the  drill  manufacturers,!  would  like  to 
go  on  record  as  being  of  the  opinion  that  the  design  of  the  machine,  and 
the  work  that  the.  machines  are  doing,  have  improved  much  more  than 
the  steel  that  is  used  in  the  machine,  and  the  general  routine  of  opera- 
tions through  which  the  machine  is  put.  There  is  no  doubt  about  that. 
Our  activities  should  be  directed  not  towards  changing  the  designs  of  the 
machines,  or  attempting  to  dictate  what  the  designs  of  the  machines 
should  be,  but  to  see  that  the  fittings  which  are  used  in  the  routine 
operation  of  drilling  are  so  designed  that  the  manipulator  can  use  them 
to  the  best  advantage. 


Sub-Committee  on  Standardization  of  Mine  Timbers 

Mr.  Chas.  A.  Mitke  presided. 

CHAIRMAN  MITKE:  Mr.  Norman  Carmichael,  general  manager  for 
the  Arizona  Copper  Co.,  and  chairman  of  this  Committee,  has  found  it 
impossible  to  attend,  but  has  sent  his  deputy,  Mr.  John  Kiddie,  superin- 
tendent of  mines  for  that  company  in  his  stead. 

[Mr.  Kiddie  explained  that  while  considerable  work  had  already  been 
accomplished,  such  as  the  compiling  of  data  from  17  large  companies,  the 
Committee  did  not  feel  that  it  was  yet  in  a  position  to  make  a  complete 
report;  and  it  was  the  desire  of  Mr.  Carmichael  that  more  time  should  be 
allowed  the  Committee  in  order  to  investigate  the  subject  more  thoroughly 
and  be  in  a  position  to  submit  a  report  at  the  end  of  the  coming  year 
(1921).] 


Sub-Committee  on  Metal  Mine  Ventilation 

Mr.    Chas.   A.    Mitke   presided. 

The  following  members  were  present:  A  Stoddard,  D,  Rait,  Robert 
Bell,  and  W.  A.  Rowe. 

A  preliminary  questionnaire,  to  be  sent  to  operators  in  order  to  obtain 
sufficient  information  to  constitute  a  working  basis,  was  presented  to 
members  by  the  Chairman,  and  the  various  points  embodied  in  this  ques- 
tionnaire taken  up  and  discussed. 

It  was  agreed  that  the  principal  avenues  to  be  followed  by  this  Com- 
mittee would  be  the  investigating  of  conditions  in  underground  working 
places,  with  the  idea  of  establishing  a  standard  mine  atmosphere.  It  was 
also  hoped  that  the  Committee — which  is  composed  of  both  operators  and 
manufacturers — might  work  out  a  set  of  recommendations  for  different 
kinds  of  standard  ventilating  equipment,  which  would  thoroughly  ven- 
tilate the  so-called  dead-ends  in  drifts,  raises,  and  stopes. 


THE  AMERICAN  MINING  CONGRESS  261 

Sub-Committee  on  Mechanical  Loading  Underground 

Mr.  Lucien  Eaton  is  chairman. 

In  the  absence  of  Mr.  Eaton  no  meetings  were  held,  but  the  Chairman 
reported  that  a  questionnaire  is  being  prepared  which  will  be  sent  to  all 
Committee  members,  operators,  and  manufacturers  of  underground  power 
shovels,  in  order  to  compile  sufficient  information  to  constitute  a  working 
basis. 


Sub-Committee  on  Steam-Shovel  Equipment  and  Operations 

Mr.  H.  C.  Goodrich  is  chairman. 

In  the  absence  of  Mr.  Goodrich,  no  meetings  were  held,  but  the  Chair- 
man reports  that  a  questionnaire  is  being  prepared,  which  will  be  sent  to 
all  operators  and  manufacturers  of  steam-shovel  equipment. 


J 

Sub-Committee  on  Underground  Transportation 

Mr.  Wm.  B.  Daly  is  chairman. 

In  the  absence  of  Mr.  Daly,  no  meetings  were  held,  but  it  is  understood 
that  a  questionnaire  has  been  prepared  which  will  be  sent  to  all  Com- 
mittee members  and  operators  in  districts  not  represented  by  Committee 
members.  r 


Sub-Committee  on  Fire-Fighting  Equipment 

The  General  Chairman,  Mr.  Chas.  A.  Mitke,  presided. 

CHAIRMAN  MITKE:  Mr.  Connibear,  chairman  of  this  Committee,  has 
found  it  impossible  to  attend  the  meeting,  but  on  behalf  of  his  Committee, 
has  forwarded  a  preliminary  report,  which  I  will  ask  Mr.  Guy  Johnson,  a 
member  of  this  Committee,  to  read  for  our  benefit. 

MR.  JOHNSON:      (Reading  the  report): 

A  canvas  is  being  made  to  ascertain  the  amount  and  variety  of  fire-  fight- 
ing equipment  that  metal-mine  operators  are  using.  To  obtain  this  infor- 
mation, copies  of  a  questionnaire  on  Fire-Fighting  Equipment  were  distri- 
buted'. The  length  of  time  since  the  organization  of  this  Committee  was 
perfected  has  not  been  sufficient  to  reach  operators  in  remote  parts  of  the 
country. 

The  number  of  questionnaires  that  have  been  received  by  the  Committee 
from  the  operators  of  copper  and  iron  mines  in  the  Lake  Superior  district 
is  sufficient  to  present  an  adequate  report  of  this  district;  but  with  this 
exception,  but  few  reports  have  been  received.  Data  is  not  available  at 
present  from  the  other  important  districts,  due  to  the  delay  in  transmission 
of  the  same. 


202  REPORT  OF  PROCEEDINGS 

Mine  Rescue  Apparatus 

The  value  of  rescue  apparatus  in  fighting  mine  fires,  and  especially  when 
lives  are  in  danger,  is  universally  acknowledged.  The  activities  of  the  U.  S. 
Bereau  of  Mines  have  extended  into  all  mining  districts,  and  have  demons- 
trated that  oxygen  rescue  apparatus  must  be  accepted  as  an  essential  part 
of  a  mine  fire  equipment. 

At  the  present  time,  apparatus  used  in  this  country  consists  of  four 
types;  the  Fluess,  the  Gibbs,  the  Paul,  and  the  Draeger.  The  Draeger, 
however,  is  slowly  but  surely  being  replaced  by  the  other  types. 

An  attempt  to  standardize  on  a  particular  apparatus  will  not  meet  with 
the  approbation  of  mine  operators.  Attention  should  be  directed  to  the 
advisability  of  using  an  apparatus  that  meets  with  the  general  require- 
ments as  recommended  by  the  Bureau  of  Mines  in  Technical  Paper  82, 
pages  23  and  24. 

Mine  operators  of  the  Lake  Superior  district  have  approximately  150 
machines.  A  report  of  the  conditions  of  these  machines  for  the  past  two 
years,  recently  issued  by  the  Bureau,  indicates  that  action  for  improve- 
ment is  recommended.  This  applies  not  only  to  the  apparatus,  but  more 
particularly  to  the  training  of  employes  in  the  use  of  them. 

Mechanical  Resuscitation  Devices 

This  apparatus  is  not  now  accepted  with  the  high  degree  of  favor  as 
it  was  a  few  years  ago.  More  attention  is  being  given  to  manual  methods. 
Not  only  is  the  effectiveness  of  mechanical  devices  questioned,  but  the 
probability  of  delay  in  obtaining  a  machine  immediately  when  needed 
reduces  the  chances  of  resuscitating  an  unconscious  person. 

Fire  Extinguishers 

These  are  being  installed  underground — both  the  carbon  tetrachloride 
and  the  soda-acid  types.  Objections  have  been  raised  to  their  use.  Increas- 
ed use  of  electricity  as  a  motive  power  for  haulage,  hoisting,  and  plumbing 
has  resulted  in  the  adoption  of  the  tetrachloride  type  for  extinguishing 
electrical  fires  in  incipient  stages.  Additional  information  is  imperative 
before  any  conclusions  can  be  deduced. 

Fire-hose 

Very  few  mines,  compared  to  the  total  number  operated  in  the  metal 
districts,  have  adequate  underground  fire-hose  equipment.  In  the  question- 
naires that  have  been  returned,  only  one  mining  company  has  adopted  this 
method  in  a  comprehensive  way. 

Portable  Blowers 

There  are  mining  companies  that  resort  to  the  portable  blowers  as  an 
effective  method  of  fighting  underground  fires,  but  the  Committee  has  not 
yet  received  information  from  those  companies  which  are  known  to  have 
made  the  most  advanced  strides  in  this  direction.  Many  mines  have  blow- 


THE  AMERICAN  MINING  CONGRESS  263 

ers  installed  to  improve  ventilation,  and  they  report  that  they  are  avail- 
able for  fire  emergencies.  Adjustments  are  necessary,  and  the  delay  that 
will  follow  thereby  is  not  known  at  the  present  time. 

Bulkhead  Material 

Many  companies  report  maintaining  posts,  planks,  and  sand  for  bulkhead 
purposes.  Due  to  the  large  volume  of  humidity,  which  is  common  in  the 
atmosphere  of  many  mines,  cement  is  not  stored  underground.  Other 
operators  report  that  substantial  bulkheads  have  been  provided'  in  order 
to  ensure  the  safety  of  mines  in  case  an  unexpected  volume  of  water  is 
encountered,  and  that  they  can  be  utilized  to  advantage  in  limiting  a 
fire-zone. 

Fire  Protection  at  Collar  of  Shafts 

The  use  of  iron  d'oors  and  spraying  systems  at  collar  of  shafts  have  been 
adopted  by  a  few  operators;  others  report  that  steel  head-frames  and 
concrete  shafts  eliminate  fire  hazards,  and  that  these  agencies  are  not 
necessary.  Most  operators,  however,  have  not  recorded  themselves  relative 
to  their  value. 
Stench  System  of  Alarm 

This  system  of  alarming  underground  employees  when  a  fire  occurs  has 
been  adopted  by  several  large  operators,  and  its  affectiveness  is  reported 
to  be  very  satisftactory. 

Conclusion 

Additional  information  is  absolutely  necessary  before  the  Committee  can 
record  its  recommendations.  This  will  require  more  time  than  was  at 
our  disposal  this  year.  An  effort  will  be  made  to  enlarge  the  membership 
of  the  Committee  so  that  further  delay  in  obtaining  desired  information 
may  be  overcome. 


PRESIDENT'S  ANNUAL  ADDRESS  205 


PRESIDENT'S  ANNUAL  ADDRESS 


By  BULKELEY  WELLS,   President  of  The  American  Mining  Congress, 

Before  the  Twenty-third  Annual  Convention,  Denver,  Colorado, 

November  15-20,  1920 


It  is  altogether  appropriate  that  a  convention  of  the  Ameri- 
can Mining  Congress  is  again  held  in  Denver,  for  here  23 
years  ago  the  organization  was  created.  From  1896  to  1907 
its  working  force  consisted  of  the  secretary  and  one  stenog- 
rapher. In  so  recent  a  year  as  1910  its  income  amounted  to 
but  $5000,  while  in  the  past  year  its  receipts  have  reached  the 
substantial  sum  of  $150,000.  This  is  convincing  proof  that 
the  services  it  renders  have  earned  the  approval  of  its  mem- 
bers and  of  the  subscribers  to  its  work.  Its  efficiency  can  and 
will  .be  increased  and  its  activities  enlarged  if  funds  are 
available,  yet  today  its  organization  at  Washington  comprises 
in  addition  to  the  secretary,  who  is,  in  effect,  managing  director, 
seven  divisions  —  respectively,  mining  economics,  taxation, 
legal  research,  tariff  and  war  minerals,  precious  metals,  Inter- 
State  commerce  and  Federal  trade  and  information  service — 
each  directed  by  a  chief  specially  qualified  to  conduct  the 
work  of  his  department.  An  adequate  force  of  clerks  and 
stenographers  renders  possible  the  prompt  and  efficient  han- 
dling of  the  organization's  business,  and  commodious  quarters 
furnish  facilities  for  this  purpose  and  for  conferences  of  its 
members  when  in  Washington.  The  Mining  Congress  Journal, 
with  an  income  of  $40,000  a  year  from  its  advertising  columns, 
conveys  each  month  to  the  members  of  the  Mining  Congress 
summarized  statements  of  all  matters  and  occurrences  of  in- 
terest to  the  mining  industry,  and  publishes  special  articles 
by  men  who  are  leaders  in  thought  and  activity  in  the  indus- 
try. Weekly  bulletins  are  issued  to  all  members,  and  daily 
bulletins  to  subscribers  to  this  special  service.  The  bulletins 
give  immediate  and  frequently  advance  information  on  mat- 
ters of  current  and  vital  importance  to  the  mining  industry. 
The  secretary  and  division  chiefs  are  at  all  times  available  for 


266  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

consultation  and  to  aid  members,  as  individuals  or  in  groups, 
representing  the  various  branches  of  the  mining  industry. 

The  American  Mining  Congress 

If  our  organization  has  a  slogan,  it  is  that  the  American 
Mining  Congress  does  not  lobby.  It  simply  endeavors  to 
present  in  concrete  and  authoritative  form  statistics  and 
arguments  in  support  of  the  welfare  of  the  mining  industry. 
Because  it  has  honestly  adhered  to  this  purpose  it  has  gained 
and  holds  the  confidence  of  members  of  Congress  and  heads  of 
departments  at  Washington,  and  can,  therefore,  effectively 
further  and  protect  the  interests  of  its  members.  Much  of 
its  work  is  constructive;  some  of  its  work  is  (of  necessity) 
destructive,  in  that  it  presents  unyielding  opposition  to  legis- 
lation unfavorable  or  unjust  to  the  mining  industry. 

During  the  past  year  the  Mining  Congress  has  been  particu- 
larly active  in  supporting  the  McFadden  Bill  for  the  relief  of 
gold  producers;  in  securing  a  more  liberal  application  of  the 
War  Minerals  Relief  Act ;  in  developing,  through  the  labors  of 
a  special  committee,  the  standardization  of  mining  equipment ; 
in  seeking  to  obtain  more  favorable  terms  for  the  use  in 
the  mining  industry  of  the  flotation  process;  in  studying  and 
attempting  to  solve  the  transportation  problem  in  co-opera- 
tion with  the  National  Shippers'  Conference,  and,  above  all, 
in  undertaking  in  conference  with  other  national  organiza- 
tions to  develop  a  more  equitable  and  less  burdensome  system 
of  Federal  taxation.  To  relate  in  detail  the  efforts  expended 
and  the  results  attained  in  these  directions  would  too  greatly 
encroach  upon  the  time  assigned  for  our  general  sessions,  but 
full  information  on  these  subjects  will  be  presented  at  the 
special  conferences  to  which  they  relate. 

The  coal  producers  of  this  country  have  always  been  loyal 
and  liberal  supporters  of  the  Mining  Congress.  They  are 
today  facing  serious  problems  of  production,  distribution  and 
marketing.  They  are  our  brothers  in  industry  and  deserve 
our  willing  co-operation. 

The  oil  producers  are  almost  too  prosperous  to  require  our 
present  aid,  but  they  subscribe  generously  to  our  work,  and 
we  must  stand  ready  to  respond  to  their  call  if  need  arises. 


PRESIDENT'S  ANNUAL  ADDRESS  267 

An  effective  and  acceptable  plan  of  co-operation  with  the 
American  Institute  of  Mining  and  Metallurgical  Engineers 
has  been  devised,  and  a  joint  conference  committee  has  been 
organized  to  ensure  the  highly  desirable  results  thus  to  be 
attained. 

Labor  Unions  Should  Incorporate  for  Legal  Purposes 

A  year  ago,  at  the  St.  Louis  convention,  I  ventured  to  assert 
that  labor  organizations  should  be  compelled  to  incorporate, 
to  render  them  legally  responsible  for  their  actions,  and  that 
compulsory  arbitration  in  labor  controversies  should  be  estab- 
lished quite  in  accord  with  the  practice  of  our  courts  in  deal- 
ing with  all  other  matters  in  dispute.    The  record  of  organized 
labor  in  the  past  year  has  confirmed  my  views  upon  these 
issues.     The  number  of  strikes  ordered  or  instigated  in  direct 
violation  of  existing  agreements,  and  with  little  or  no  regard 
for    public    welfare,  has  lost  organized    labor    innumerable 
friends  and  has  retarded  its  development  beyond  measure. 
I  believe  sincerely  in  the  organization  of  labor  and  in  "col- 
lective bargaining,"    provided  both  parties  to  such  procedure 
are  equally  and  firmly  bound.     But  agreements,  once  accepted 
and   executed  by   duly  authorized   representatives,  must  be 
implicitly  observed,  and  legal  existence  must  carry  with  it 
legal  responsibility.     No  man  who  honestly  intends  to  ful- 
fill a  contract  he  has  signed  need  fear  the  action  of  a  court 
empowered  to  punish  the  violation  of  such  a  contract. 

Quite  apart  from  considerations  of  party  politics,  the  recent 
election  served  notably  to  affirm  the  belief  of  our  people  in 
our  form  of  government.  It  demonstrated  that  the  vote  of 
organized  labor  cannot  be  delivered  in  support  of  candidates 
of  socialistic  or  more  radical  beliefs,  and  good  citizens,  Demo- 
crat and  Republican  alike,  overwhelmingly  voted  down  the 
socialistic  and  anarchistic  enemies  of  our  Government.  But 
in  the  very  indecisiveness  of  this  victory  there  is  grave  danger 
that  we  allow  ourselves  to  relapse  into  a  state  of  fancied 
security.  The  sinister  forces  that  seek  to  undermine  and 
overturn  our  Government  are  at  work  ceaselessly  day  and 
night,  year  in  and  year  out.  They  are  well  organized  and 
strongly  financed.  Only  through  sustained  effort,  unending 
vigilance  and  grim  determination  can  we  hope  to  defeat  them. 
In  this  issue  and  in  dealing  with  other  problems  of  our  indus- 


268 


PROCEEDINGS   OF  AMERICAN   MINING   CONGRESS 


trial  life  of  today  individual  effort  is  of  little  avail.  Men  of 
like  beliefs,  of  like  interests  and  of  like  needs  must  stand 
together  in  well  ordered  and  wisely  directed  organizations. 
The  American  Mining  Congress  has  actively  and  effectively 
aided  the  mining  industry  in  the  earlier  stages  of  this  period 
of  readjustment  and  reconstruction.  It  can  do  much  more 
if  you  will  support  and  animate  its  organized  efforts.  You 
need  the  American  Mining .  Congress — the  American  Mining 
Congress  needs  you. 


POWER  FOR  INTERIOR  ALASKA  269 


GENERAL  SESSIONS 


Original  Papers  Presented  at  the  Twenty-third  Annual  Convention 

of  The  American  Mining  Congress,  Denver,  Colorado, 

November  15-20,  1920 


POWER  FROM  LIGNITE  TO  DEVELOP  INTERIOR  ALASKA 

By  JOHN  A.  DAVIS 
Governor  Alaska  Chapter  American  Mining  Congress,  Fairbanks,  Alaska 

Any  policy  for  developing  the  resources  of  Alaska,  and  par- 
ticularly those  of  the  interior,  must,  if  it  makes  any  pretence 
of  being  farsighted  or  comprehensive,  give  serious  considera- 
tion to  the  lignite  deposits  of  this  region,  because  the  utiliza- 
tion of  these  deposits  is  the  keystone  in  the  arch  of  future 
growth.  The  principal  industry  of  this  interior  country  lying 
north  and  east  of  the  Alaska  Range,  and  containing  the  great 
valleys  of  the  Yukon  and  Tanana  rivers,  is  mining,  which 
will  continue  to  be  the  mainstay  for  many  years  to  come.  In 
addition  to  Fairbanks,  which  is  the  most  important  camp, 
other  mining  districts  are  found  at  Hot  Springs  and  Rampart, 
Tolovana,  Bonnifield  and  Kantishna. 

Since  the  discovery  of  placer  gold  on  Pedro  Creek  in  1902 
the  Fairbanks  district  has  produced  something  over  $70,- 
000,000  in  gold  and  silver.  The  production  from  the  Hot 
Springs-Rampart  district  exceeds  $8,000,000,  and  from  the 
Tolovana  district  $3,000,000.  The  Kantishna  and  Bonnifield 
districts,  which  have  been  severely  handicapped  by  the  absence 
of  any  transportation  worthy  of  the  name,  have  produced 
nearly  $1,000,000.  This  gold  has  been  won  from  the  narrow 
and  richer  portions  of  the  placer  deposits,  but  there  yet  remain 
in  the  region  many  hundreds  of  millions  of  yards  of  gold- 
bearing  gravels  which  still  contain  today  many  times  over 
the  total  quantity  of  gold  thus  far  removed.  The  winning  of 
this  gold  in  the  future  must  be  done,  however,  with  modern, 
up-to-date  machinery,  for  which  power  is  a  prime  requisite. 


2?0  ^ROCEEDiNGS   OF  AMERICAN   MINING  CONGRESS 

Wood  Used  as  Fuel 

Up  to  the  present  writing,  fuel  for  mining  operations  has 
been  obtained  from  spruce  and  birch  timber,  which  the  early 
miners  and  prospectors  .found  on  the  slopes  and  bottoms  of 
the  valleys,  and  which  they  used  lavishly  and  unstintingly 
while  it  lasted.  This  is  now  gone,  and  wood  is  becoming 
more  and  more  difficult  to  procure.  In  the  early  days  of 
mining,  wood  could  be  purchased  at  $5  to  $6  per  cord,  even  in 
spite  of  the  high  costs  then  prevalent  in  the  district.  Today, 
however,  the  average  cost  of  wood  is  over  $11  per  cord,  and 
prices  of  $16  or  $17  are  not  unusual.  Fuel  is  so  scarce  that 
several  of  the  mines  are  using  stumps  and  roots,  which  are 
torn  from  the  ground  and  burned  for  fuel.  Were  it  not  for 
the  fact  that  the  Government  railroad,  now  under  construc- 
tion, passes  through  the  heart  of  a  large  lignite  field  lying  on 
the  north  slope  of  the  Alaska  Range,  along  the  Nenana  River 
and  its  tributaries  (about  50  miles  from  the  junction  with  the 
Tanana  River),  the  fuel  situation  in  the  older  camps  of  the 
interior  would  be  utterly  hopeless  within  two  or  three  years 
at  most. 

Water-Power 

Nor  can  water-power,  which  plays  such  an  important  part 
in  mining  operations  in  Southeastern  Alaska,  supply  the  needs 
of  the  mining  industry  here.  Climatic  conditions  in  the 
interior,  shut  off  as  it  is  by  the  Alaska  Range  from  the  warm- 
ing influence  of  the  Japan  current,  are  such  that  the  smaller 
streams,  having  a  sufficient  gradient  to  furnish  hydro-electric 
power,  are  frozen  for  six  or  eight  months  of  each  year,  and 
consequently  have  such  a  greatly  diminished  flow  that  the 
development  of  water-power  is  impracticable ;  while  the  larger 
streams  where  there  is  a  sufficient  flow  of  water  have  such 
low  gradients  that  the  installation  cost  of  hydro-electric 
development  would  be  so  unreasonably  excessive  as  to  be  out 
of  the  question.  Therefore,  power  for  mining  and  other  pur- 
poses in  this  region  can  be  had  only  by  utilizing  the  sole  availa- 
ble fuel — the  Nenana  lignite. 

The  lignite  occurs  in  many  beds  of  different  thickness 
distributed  through  a  series  of  soft  sandstones,  clays  and 
gravels,  aggregating  some  1200  to  1500  feet  in  thickness. 


POWER  FOR  INTERIOR  ALASKA  271 

Twelve  lignite  beds  are  known  to  be  of  workable  size,  at  least 
six  of  which  average  more  than  20  feet.  Stephen  R.  Capps  of 
the  U.  S.  Geological  Survey  examined  the  Nenana  field  in  1910, 
and  made  an  estimate  of  the  amount  of  lignite  it  contained. 

Coal  Reserves  at  Nenana 

In  considering  the  basin  of  Healy  Creek,  one  of  the  tribu- 
taries of  the  Nenana  River,  as  a  unit,  he  reports  that — 

"A  section  near  the  mouth  of  Healy  Creek,  and  another 
six  miles  above,  showed  212  and  133  feet  of  coal,  respect- 
ively, not  including  any  beds  less  than  4  feet  in  thick- 
ness. As  the  field  has  its  greatest  width  near  the  mouth 
of  the  stream,  the  mean  of  these  two  measurements,  172 
feet,  probably  represents  a  conservative  average  thick- 
ness for  the  whole  field.  Calculated  from  this  thickness 
and  with  an  area  of  20  square  miles,  the  total  lignitic 
coal  content  of  the  field  would  be  more  than  3,890,000,000 
tons." 

Taking  Lignite  Creek,  another  tributary,  as  a  unit,  he 
states : 

"An  estimate  of  the  coal  tonnage  of  this  basin  was 
based  on  the  average  of  the  five  incomplete  sections  meas- 
ured, and  is  doubtless  much  less  than  the  actual  coal  con- 
tent. By  using  62  feet  as  the  average  thickness  of  coal 
throughout  the  80  square  miles  of  the  field,  the  coal  con- 
tent is  then  more  than  5,700,000,000  tons/' 

Since  these  estimates  were  made,  prospecting  and  investiga- 
tion have  shown  that  the  area  of  lignite-bearing  strata  in  the 
Nenana  field  is  much  more  extensive  than  that  examined  by 
Capps,  and  his  estimate  of  the  amount  of  lignite  in  the  field 
could  probably  be  doubled  with  safety,  thus  indicating  an 
almost  inexhaustible  supply  of  fuel. 

The  conversion  of  the  lignite  into  power  may  be  accom- 
plished in  either  of  two  ways.  It  may  be  transported  to  the 
mines  and  used  to  generate  steam  in  individual  power  plants, 
or  it  may  be  burned  in  one  central  station  located  at  the  lignite 
fields  and  the  power  transmitted  electrically  to  the  various 
mining  districts. 

Transportation  of  Coal 

The  use  of  lignite  at  the  individual  mines  involves  at  once 
the  question  of  transportation.  Even  in  the  Fairbanks  dis- 


272  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

trict,  which  is  served  by  the  Government  railroad  passing 
through  the  lignite  field,  the  delivery  of  the  fuel  will  involve 
a  railroad  haul  of  100  to  125  miles,  combined  with  a  wagon 
haul  of  from  1  to  20  miles  over  roads  that  at  some  seasons 
of  the  year  are  practically  impassable.  At  the  present  writ- 
ing, with  the  single  exception  of  the  electric-light  plant  at 
Nenana,  none  of  the  probable  consumers  of  lignite  are  pro- 
vided with  railroad  spurs  which  could  be  used  to  deliver  the 
lignite  in  carload  lots.  Nor  in  most  cases  is  it  likely  that  such 
spurs  will  be  constructed  directly  to  the  individual  mines. 
The  chief  product  of  most  of  the  mines  is  gold  dust  or  bullion, 
and,  even  if  this  existed  in  the  fabulous  quantities  popularly 
supposed  in  Alaska,  it  is  quite  safe  to  assume  that  freight 
cars  will  never  be  required  to  haul  it  away!  Nor  will  the 
quantity  of  fuel  and  supplies  to  be  hauled  in  justify  the  build- 
ing of  a  spur  track,  except  in  possibly  a  few  instances  where 
the  mines  are  situated  a  very  short  distance  from  the  main 
railroad  line.  Therefore,  the  delivery  of  the  fuel  to  the  con- 
sumer will  involve,  in  addition  to  the  railroad  haul,  the  cost 
of  transferring  it  to  wagons  or  sleds  and  hauling  it  for  con- 
siderable distances. 

In  the  Fairbanks  district  the  distance  varies  from  1  to  20 
miles.  The  Tolovana  district  is  60  miles  across  country  from 
the  nearest  railroad  point,  and  the  connecting  wagon  road 
has  yet  to  be  built.  The  alternative  route  is  about  200  miles 
by  river,  involving  two  or  three  transfers,  with  an  additional 
20  miles  by  wagon  or  sled.  The  Hot  Springs  district  also 
requires  a  combined  river  and  wagon  haul,  while  the  Kan- 
tishna  and  Bonnifield  districts  are  practically  without  trans- 
portation. It  will  be  seen,  therefore,  that  no  little  difficulty 
will  be  experienced  in  delivering  the  lignite  from  the  Nenana 
field  to  the  mines  in  the  interior  of  Alaska,  and  the  cost  of 
transportation  will  be  a  very  serious  item. 

Size  of  Mine  Plants 

Nor  would  the  use  of  the  lignite  at  individual  plants  make 
it  possible  to  lower  the  cost  of  power  sufficiently  below  the 
present  high  price  to  afford  any  appreciable  stimulus  to  the 
mining  industry.  The  plants  required  at  the  mines  are  small — 
30,  50,  80  and  occasionally  100  horse-power — and  the  equip- 
ment is  usually  of  a  temporary  nature,  designed  for  porta- 


POWER  FOR  INTERIOR  ALASKA  278 

bility  rather  than  efficiency.  Such  plants  do  not  warrant  the 
installation  of  equipment  necessary  to  utilize  the  lignite  to 
advantage  or  to  secure  the  maximum  efficiency.  Mechanical 
devices  for  feeding  the  lignite  would  be  cumbersome  and 
un wieldly  in  addition  to  being  too  costly,  while  to  install  fire- 
boxes designed  to  provide  radiant  heat  at  the  point  where 
the  lignite  first  enters  the  furnace,  thus  bringing  it  to  com- 
bustion temperature  as  quickly  as  possible,  would  necessitate 
the  purchase  of  entirely  new  boilers,  the  cost  of  which  would 
also  be  excessive  for  the  amount  of  power  to  be  generated. 
Actual  steaming  tests  conducted  by  the  writer  with  lignite 
at  the  Nenana  electric-light  plant,  which  is  better  equipped 
for  burning  this  fuel  than  the  majority  of  the  plants  at 
the  mines,  indicate  that  an  efficiency  of  40  per  cent,  may  be 
considered  very  favorable  with  plants  of  this  type.  The  tests 
also  show  that  it  will  require  at  least  a  ton  and  one-quarter  of 
the  lignite  to  generate  as  much  steam  as  that  from  a  cord  of 
spruce  wood;  so  that  although  the  lignite  offers  a  source  of 
fuel  to  replace  the  constantly  decreasing  wood  supply,  the  low 
efficiency  to  be  had  from  it  in  small  and  more  or  less  tempo- 
rary plants,  combined  with  the  cost  of  mining  the  lignite  and 
delivering  it  to  the  individual  mines,  makes  any  great  reduc- 
tion in  power  cost  highly  improbable. 

A  Central  Power-Station 

But  if  the  power  requirements  of  the  region  could  be  cen- 
tralized in  one  generating  station,  with  electric  transmission 
lines  to  distribute  the  power  to  the  mines,  the  size  and  per- 
manency of  the  plant  would  warrant  the  installation  of  prop- 
erly designed  equipment  and  machinery  for  converting  the 
fuel  into  power  with  the  maximum  degree  of  economy  and 
efficiency,  and  by  erecting  the  central  station  in  or  near  the 
lignite  field  the  excessive  local  difficulties  of  transportation 
could  be  avoided.  The  requirements  and  details  of  such  an 
installation  have  been  determined  by  the  Alaska  Chapter  of 
the  American  Mining  Congress  working  in  co-operation  with 
the  Alaska  Station  of  the  United  States  Bureau  of  Mines,  and 
a  summary  of  them  was  presented  in  a  paper  read  before  the 
twenty-second  annual  convention  of  the  American  Mining 
Congress  one  year  ago. 

Briefly,  this  plan  contemplates  the  erection  at  some  point 


274  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

convenient  to  the  lignite  field  of  a  central  generating  station 
having  an  initial  capacity  of  5000  horse-power,  but  so  designed 
that  it  can  be  readily  enlarged  to  an  ultimate  capacity  of  20,- 
000  horse-power  to  keep  pace  with  the  growing  demand  for 
power  it  will  surely  create.  It  is  assumed  that  the  best  mod- 
ern engineering  practice  will  be  followed  in  the  choice  of 
machinery  to  ensure  the  production  of  power  as  cheaply  as 
possible.  This  will  involve  the  use  of  furnaces  properly 
designed  to  burn  the  lignite  efficiently,  mechanical  feeding 
devices  for  supplying  the  furnaces,  water-tube  boilers  for 
generating  steam,  and  high  pressure,  condensing  turbo- 
generators for  converting  the  steam  into  electricity.  Since 
reliability  of  service  will  be  a  prime  requisite  because  of  the 
great  loss  that  would  result  from  even  a  brief  shut-down  of 
the  plant,  especially  during  the  short  busy  summer  season,  the 
power  plant  should  be  planned,  not  only  in  its  initial  installa- 
tion, but  also  throughout  all  stages  of  growth,  to  carry  the 
load  for  short  periods  with  any  one,  even  the  largest,  of  its 
units  out  of  commission. 

The  plan  also  provides  for  a  system  of  electric  transmission 
lines  from  the  power  plant  to  the  various  mining  districts. 
This  will  include  110  miles  of  main  line  at  110,000  volts 
between  the  plant  and  the  Fairbanks  district,  two  secondary 
lines  at  66,000  volts  from  a  point  about  midway  on  the  main 
line  leading  to  the  Tolovana  and  the  Hot  Springs  districts, 
60  and  70  miles  distant;  a  secondary  line  at  similar  voltage 
leading  from  the  plant  to  the  Kantishna  district,  a  distance  of 
70  miles ;  a  line  at  33,000  volts  from  the  plant  for  35  miles  to 
the  Bonnifield  district;  together  with  approximately  100  miles 
of  branch  lines  and  feeders  at  33,000  volts  in  the  several  min- 
ing districts.  In  order  to  ensure  uninterrupted  service,  the 
main  and  secondary  lines  will  each  carry  two  independent 
circuits. 

Cost  of  Proposed  Power-Plant 

The  cost  of  such  an  installation  with  its  initial  capacity  of 
5000  horse-power  is  estimated  at  $4,750,000,  making  due 
allowance  for  the  present  cost  of  materials  and  supplies  and 
the  added  cost  of  construction  in  Alaska,  while  the  ultimate 
cost  of  the  full  20,000  horse-power  installation  would  be 
$9,000,000.  Such  a  plant  could  furnish  power  at  a  cost  of 


POWER  FOR  INTERIOR  ALASKA  275 

than  $100  per  horse-power  year,  as  compared  with  $800 
horse-power  year,  the  average  at  the  mines  operating  in 

le  Fairbanks   district  during  the  present  season  of  1920. 
>ower  at  one-eighth  of  the  present  cost  would  obviously  give 
a  big  impetus  to  the  mining  industry  of  this  great  district, 
especially  as  power  is  becoming  an  increasingly  preponderant 
factor  in  mining  cost. 

We  have,  then,  the  interior  of  Alaska,  with  an  area  of  more 
than  150,000  square  miles,  comprising  the  main  heart  and 
bulk  of  the  Territory  and  containing  resources  in  mineral 
wealth  to  be  estimated  by  hundreds  of  millions  of  dollars, 
awaiting  only  a  systematic  and  broad-minded  policy  of  develop- 
ment. In  addition  to  mineral  wealth  the  district  contains 
the  most  extensive  farming  region  in  the  territory.  In  the 
Fairbanks  district  alone  there  are  more  than  100  homesteads, 
with  over  2000  acres  under  cultivation,  which  produced  in 
1919,  60  tons  of  wheat,  40  tons  of  oats,  10  tons  of  barley,  500 
tons  of  hay,  325  tons  of  potatoes  and  60  tons  of  other  vegeta- 
bles. The  success  during  the  last  five  years  in  wheat  growing 
has  induced  the  residents  of  Fairbanks  to  install  a  flouring 
mill  to  convert  the  wheat  into  flour.  This  industry  is  still 
very  new,  but  the  success  obtained  opens  a  broad  vista  of 
future  possibilities.  The  realization  of  these  possibilities, 
however,  depends  directly  upon  the  development  of  the  mining 
industry.  For  many  years  to  come  the  farmer  will  be  limited 
to  local  consumption  for  his  market,  because  owing  to  remote- 
ness he  cannot  hope  to  ship  his  products  to  the  States  at  a 
profit.  The  source  of  local  consumption  can  only  be  had  in  a 
population  engaged  in  the  mining  industry  or  in  the  attendant 
commerce  depending  directly  upon  it.  Without  a  growing  and 
flourishing  mining  industry  agriculture  must  fail  through 
sheer  inanition. 

Factors  Influencing  Mining 

The  growth  and  development  of  the  mining  industry  in 
the  interior  depends  upon  three  factors:  Adequate  trans- 
portation facilities,  lower  cost  of  supplies,  and  cheaper  power. 
The  question  of  transportation  is  in  a  fair  way  to  solution  by 
the  construction  of  the  Government  railway  from  Fairbanks 
to  the  coast,  which  upon  its  completion  will  afford  an  outlet  to 
tidewater  throughout  the  entire  year,  and  by  the  extensive 


276  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

system  of  roads  and  trails  planned  and  now  being  built  by 
the  Alaska  Road  Commission.  The  high  cost  of  supplies  is 
nation-wide,  if  not  world-wide,  and  is  particularly  onerous 
here,  because  gold  is  the  one  commodity  the  price  of  which  has 
remained  fixed.  For  it  is  manifest  that,  when  all  other  values 
increase  with  respect  to  a  standard  and  that  standard  hap- 
pens to  be,  as  is  this  case,  the  principal  product  of  a  mining 
industry,  it  must  impose  a  grave  handicap  on  the  industry. 
While  it  is  perhaps  beyond  our  present  ability  to  control  the 
high  price  of  supplies,  the  proposed  premium  on  virgin  gold 
(which  is  so  ably  championed  by  the  American  Mining  Con- 
gress) ,  if  it  becomes  effective,  will  afford  a  great  remedial  com- 
pensation wherever  gold  is  mined.  And  a  satisfactory  solu- 
tion of  the  power  question  can  be  reached  by  an  immediate 
installation  of  the  central  power  plant  and  transmission  lines 
just  mentioned,  the  construction  of  which  is  essential  to  any 
comprehensive  policy  for  the  development  of  Alaska. 

The  Government  of  the  United  States  initiated  such  a  policy 
with  the  authorization  of  the  railway  from  the  coast  to  the 
interior,  which  is  being  built  at  a  cost  of  some  $50,000,000. 
That  this  was  merely  the  first  step  in  the  development  of  the 
Territory  was  recognized  by  every  man  of  large  caliber  in  the 
nation  who  was  acquainted  with  the  facts  at  the  time  the  rail- 
road was  begun.  The  annual  appropriations  for  wagon  roads 
in  Alaska,  many  of  which  serve  as  feeders  for  the  railroad, 
are  extensions  of  the  policy.  The  passage  of  the  Alaska  Coal 
Leasing  Act  in  1914,  opening  the  coal  fields  of  the  Territory 
for  development,  was  another  link  in  the  chain.  And  now 
that  not  only  the  exploitation  of  the  mineral  wealth,  but  agri- 
culture and  all  other  development  in  the  Territory,  depend- 
upon  cheap  power  as  one  of  the  prime  factors  for  their  exist- 
ence, is  it  not  logical  for  the  Government  to  invest  the  $9,000,- 
000  needed  to  build  a  plant  to  supply  such  power  in  order  to 
make  the  hundreds  of  millions  of  dollars  in  mineral  resources 
available  as  part  of  the  national  wealth,  not  to  mention  the 
possibilities  of  agriculture  or  the  settlement  and  coloniza- 
tion of  this  vast  interior  empire?  And  the  word  "invest"  is 
used  purposely,  because  the  entire  cost  of  the  installation 
would  be  repaid  with  interest  at  the  end  of  20  years.  Any 
private  enterprise  having  but  a  small  fraction  of  the  resources 


POWER  FOR  INTERIOR  ALASKA  277 

of  the  United  States  and  owning  98  per  cent,  of  the  land  and 
resources  of  so  great  a  country  would  not  hesitate  an  instant 
over  the  expenditure. 

Gold  is  the  Chief  Product  of  the  Interior 

There  are  other  equally  cogent  reasons.  The  depletion  of 
the  gold  reserve  has  reached  serious  if  not  alarming  propor- 
tions. It  is  a  problem  that  is  engaging  the  attention  of  the 
best  thinkers  in  the  country,  and  is  the  fundamental  reason 
for  the  proposed  gold  premium.  Gold  is  the  chief  product  of 
the  mining  industry  of  the  interior.  It  is  extremely  important, 
then,  that  this  mining  be  stimulated  and  developed  in  every 
logical  way.  But  with  or  without  the  gold  premium,  the  min- 
ing industry  of  the  interior  must  have  cheaper  power.  The 
situation  is  much  more  acute  here  because  mining  in  frontier 
countries  such  as  this  cannot  remain  at  a  standstill.  It  must 
advance  or  decline,  and  once  started  the  descent  is  more  rapid 
than  the  proverbial  one  to  Avernus.  The  World  War  de- 
stroyed almost  fabulous  quantities  of  other  metals,  such  as 
tin,  tungsten,  copper,  etc.,  all  of  which  are  found  in  this  dis- 
trict, and  which  a  healthy  and  flourishing  mining  industry 
would  help  to  replace.  And  the  colonization  and  develop- 
ment of  the  interior  of  Alaska,  which  would  eventually  accom- 
pany such  an  industry,  would  create  a  new  empire — self- 
reliant,  paying  back  with  lavish  generosity  in  much-coveted 
raw  materials  the  dole  of  assistance  now  so  urgently  needed. 

The  mining  industry  must  have  power — cheap  power — the 
only  source  of  which  is  the  lignite  of  the  Nenana  field.  Hence 
it  is  that  the  whole  future  of  this  interior  country  is  intimately 
concerned  with  the  policy  that  may  be  adopted  for  the  utiliza- 
tion of  this  fuel.  If  the  policy  is  broad-minded,  farsighted, 
comprehensive,  and  contemplates  the  logical  and  most  efficient 
means  of  using  the  fuel,  the  growth  of  the  country  will  pro- 
ceed to  perhaps  undreamed  of  possibilities.  If  the  policy  is 
niggardly  and  penny-wise,  it  will  not  only  overlook  a  great 
opportunity,  but  will  cripple,  if  it  does  not  destroy,  the  hope  of 
a  new  empire  upon  our  last  frontier.  The  men  who  for  20 
years  have  faced  and  grappled  with  the  stern  spirit  of  the 
North  cannot  bide  much  longer  to  await  the  nation's  decision 
on  this  matter. 

On  the  walls  of  a  log  cabin  in  Fairbanks  there  hangs  a 


278  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

moose  hide  upon  which  a  local  artist  has  sketched  the  graphic 
realism,  a  familiar  scene — a  prospector's  cabin  in  a  clearing 
of  spruce  and  tamarack,  snow-drifted  about  the  sagging, 
deserted  walls,  no  sign  of  friendly  smoke  from  the  fallen  chim- 
ney. In  the  foreground  a  broken  windlass  dangles  above  a 
tumbled-in  shaft;  the  wierd  spirit  dance  of  the  Northern 
Lights  flames  in  ghostly  silhouette  behind  the  spectral  trees. 
A  giant  moose  has  returned  to  his  one-time  haunt  and  lifts 
his  head  proudly,  sole  lord  once  more  of  his  old  domain.  The 
prospector-artist  has  named  his  picture,  with  a  grim  humor, 
"Reclamation." 

We  of  the  North  must  have  help  in  this  matter  if  we  are 
to  continue  getting  out  our  quota  of  the  nation's  gold  supply. 
With  our  back  against  the  Arctic  Circle  we  are  fighting  to 
hold  on.  Would  you  have  in  your  Alaska  the  "Reclamation" 
of  that  sardonic  jest?  Shall  we  leave  this  potential  empire 
once  more  to  the  moose  and  the  timber  wolf,  or  shall  we  hold 
what  we  have  now  and  go  on  to  greater  things? 


MODERN  INDUSTRY  AND  INDUSTRIAL  PEACE  279 


MODERN  INDUSTRY  AND  INDUSTRIAL  PEACE 

By  JAMES  LORD 

lent    Mining    Department,    American    Federation    of    Labor,    Wash- 
ington, D.  C. 

I  regret  more  than  I  can  say  that  circumstances  have  so 
shaped  themselves  that  I  must  return  to  the  East  at  once;  but 
that  is  the  situation,  so  I  am  dictating  these  notes,  which  will 
be  along  the  lines  on  which  I  would  have  addressed  you  had  it 
not  been  ordered  otherwise. 

I  was  hoping  to  take  up  with  you  personally  some  funda- 
mental things  in  connection  with  modern  industry  and  indus- 
trial peace  with  the  same  latitude  and  absence  of  restraint 
that  you  seem  to  show  to  all  the  speakers. 

I  have  no  illusions  that  these  words  will  be  able  to  change 
the  mode  of  thought  of  all  of  you.  I  realize  that  strong  men 
have  strong  convictions  and  strong  differences.  I  also  realize 
that  in  the  struggle  for  success  and  supremacy  in  industry, 
often  men's  talents  and  ability  are  fully  taxed  in  dealing  with 
the  material  side  of  industry  to  the  cost  or  exclusion  of  the 
human  equation.  This  has  been  perfectly  natural  and  a  mat- 
ter of  course  generally,  but  I  think  there  is  a  distinct  drift 
in  the  minds  of  many  of  the  large  employers  in  industry,  espe- 
cially the  mining  industry,  to  take  a  newer  or  a  better  slant 
over  the  field,  and  give  more  thought  to  the  well-being  and 
environment  of  the  human  element  than  heretofore. 

I  am  inherently  a  miner.  My  people  have  for  centuries, 
as  far  as  I  can  learn,  been  miners.  I  have  been  in  the  mines 
since  1889.  My  father  entered  his  first  mine  about  1850 — at 
the  age  of  six  years.  His  father  was  a  miner  before  him,  and 
I  find  that  both  of  my  father's  and  mother's  people,  both  men 
and  women,  worked  in  the  mines  in  Britain,  and  that  my  rela- 
tives are  scattered  over  the  world  wherever  mining  is  car- 
ried on. 

I  think  I  can  fairly  claim  to  be  a  practical  miner.  As  the 
saying  is :  "I  went  through  the  mill."  I  was  taught  by  a  man 
who  only  knew  how  to  do  one  thing  one  way.  Every  line  had 
to  be  kept,  everything  ship-shape,  methods  of  timbering,  blast- 


280  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

ing,  etc.,  never  slipped  over,  and  the  working  place  kept  in 
that  condition  it  would  be  if  it  were  the  miner's  own  private 
property;  which,  indeed,  is  was  so  considered. 

A  miner  of  that  training  is  a  man  who  can  do  anything 
from  the  collar  of  the  shaft  to  the  working  face,  except  the 
technical  work,  and,  as  far  as  he  is  individually  concerned, 
can  take  care  of  his  own  back.  So  I,  like  many  of  you,  learned 
my  trade  in  rather  a  harsh  school,  but  learned  the  lesson  of 
thoroughness  and  efficiency. 

The  Miner  is  a  Pioneer  of  Civilization 

To  the  miner,  as  much  as  to  any  other  man,  our  present 
status  of  civilization  should  bow  its  head.  By  the  term  miner 
I  mean  all  who  have  played  a  useful  part  in  winning  the  coal 
and  metals  from  the  earth  for  the  further  development  and 
well-being  of  humanity.  The  prospector  who  has  braved  the 
dangers  of  the  wild  places  has  often  had  to  furnish  his  own 
protection;  the  man  who  has  taken  the  risk  in  extending  the 
industry,  often  risking  the  labor  and  accumulation  of  a  life- 
time, and  the  actual  miner,  who,  often  without  a  rudimentary 
technical  knowledge,  relying  often  on  his  own  common  sense 
or  traditional  knowledge  to  cope  with  fire,  weight  and  flood, 
has  never  seen  the  place  or  the  mining  environment  that  he 
feared  to  invade.  To  all  these  should  civilization  bow  in 
reverence. 

I  have  always  been  interested  in  doing  what  I  could  when 
opportunity  presented  itself  to  make  a  brighter  and  better 
environment  for  the  subterranean  toilers — to  usher  more 
sunlight  and  happiness  into  the  lives  of  the  men,  women  and 
children  of  the  miners.  I  was  brought  up  that  way.  I  know 
the  struggles  of  these  people  for  a  better  life;  their  anxiety 
for  better  surroundings  in  toil  and  living.  I  joined  the  first 
miners'  union  I  had  the  opportunity  of  doing.  I  realized  early 
in  the  game  that  the  individual,  with  the  powerful  interests 
he  had  to  cope  with,  could  do  little  or  nothing,  but  that,  united 
with  his  fellows,  he  could  make  a  measure  of  orderly  progress, 
or  at  least  be  in  the  position  of  preventing  hostile  interests 
from  driving  him  backwards,  which  is  not  less  important. 

Organization  seems  to  have  always  existed  in  some  form 
among  miners.  Even  in  the  terrible  days  of  ancient  Greece 
and  Rome,  with  almost  every  avenue  denied  them,  with  death, 


MODERN  INDUSTRY  AND  INDUSTRIAL  PEACE  28i 

torture  and  crucifixion  staring  them  in  the  face,  the  miners  of 
Laurium  and  other  fields  were  able  at  times  to  wring  some 
concessions  from  their  taskmasters. 

The  history  of  labor  is  the  history  of  humanity.  We  can 
see  in  the  early  history  of  mining  in  Britain,  when  the  Romans 
cast  prisoners  of  war  and  entire  communities  into  the  mines, 
here  and  there  a  united  attempt  to  get  away  from  the  deg- 
radation and  cruelty,  sometimes  with  a  measure  of  success. 

Early  Labor  Conditions 

When  legislation  was  enacted  making  free  men  of  the  miners 
of  Britain,  the  most  hardy  among  them  began  the  battle  for 
emancipation.  When  the  bill  was  proposed  in  Parliament 
providing  that  the  miners'  children  should  be  sent  to  school, 
we  find  one  man  in  the  Upper  House  savagely  and  bit- 
terly fighting  it,  every  inch  of  the  road.  This  was  Lord 
Londonderry.  He  was  fighting  for  his  own  material  inter- 
ests. He  raised,  naturally  enough  from  his  viewpoint,  the 
competitive  question.  He  pointed  out  that  the  children  were 
a  necessity  in  the  low  seams  of  coal ;  that  they  could  tram  the 
little  cars,  and  if  this  was  denied,  it  would  require  untold 
expense  to  brush  the  roadways  so  that  ponies  could  be  used. 
But  he  went  further  than  this :  He  raised  the  cry  somewhat 
similar  to  the  cry  that  was  raised  in  some  of  our  own  States 
during  the  ante-bellum  days :  "An  educated  slave  is  a  danger- 
ous slave."  He  declared  that  if  a  few  rays  of  enlightenment 
were  allowed  to  permeate  the  minds  of  these  boys  and  girls, 
they  would  never  stand  for  the  conditions  that  were  visited  on 
their  fathers  and  mothers.  He  declared  that  if  this  legisla- 
tion were  to  be  adopted,  many  of  the  mine  owners  in  the  low 
seams  would  be  competitively  ruined  and  would  have  to  go  out 
of  business.  Of  course,  he  was  one  of  the  most  extensive 
mine  owners  in  the  North  of  England ;  he  was  speaking  in  the 
spirit  of  the  times,  and  no  doubt  felt  that  he  was  making  a 
logical,  competitive  argument  for  the  industry.  The  same 
Londonderry  family  remained  large  mine  operators  in  Britain 
and  accustomed  themselves  to  this  radical  departure  in  meth- 
ods of  mining. 


282  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Growth  of  Industry 

The  system  of  industry  we  are  living  under  today  is  a 
growth.  It  is  growing  and  extending  all  the  time,  and  no 
man  or  set-  of  men  living  can  be  held  responsible.  Changes 
are  gradually  brought  about,  and  men  on  all  sides  of  the  situa- 
tion live  to  revise  their  judgment  at  times,  if  they  are  intel- 
ligent. Hardships,  mining  disasters,  bad  ventilation,  lack  of 
adequate  understanding  and  legislation  naturally  drive  the 
workers  together  for  their  mutual  self-protection  and  pres- 
ervation. They  know,  by  bitter  experience,  that  in  those 
communities  where  they  have  established  the  greatest  amount 
of  solidarity  the  best  conditions  of  living  and  working  obtain, 
the  best  laws  are  enacted,  and  the  better  enforcement  of  exist- 
ing'laws  is  prevalent.  They  know  that  no  one  can  save  them, 
but  they  must  save  themselves.  They  know  that  democracy 
cannot  be  handed  down  to  them,  but  that  democracy  must  be 
achieved.  Therefore,  they  are  banded  together  in  trade  and 
industrial  unions  in  every  progressive  country  in  the  world. 
They  have  made  progress  and  they  have  made  many  mistakes. 
They  have  learned  much  by  experience  and  by  the  mistakes 
they  have  made. 

They  alone  may  not  be  able  to  bring  a  full  measure  of 
stability  and  equity  into  the  situation ;  therefore,  the  question 
of  intelligent  joint  relations  in  industry  arises.  I  have 
served  the  workers'  movement  in  different  capacities  before 
I  was  honored  by  my  present  position,  and  have  always  been 
an  ardent  advocate  and  stickler  for  adequate  joint  relations 
and  a  strict  observance  of  them. 

I  do  not  claim  that  we  have  reached  that  happy  time  when 
all  friction  has  been  eliminated  and  the  lion  and  the  lamb  lie 
down  together.  I  do  not  say  that  the  interests  of  capital  and 
labor  are  identical.  I  say  that  they  have  problems  peculiar 
to  the  industry  that  no  one  on  the  outside  can  properly  under- 
stand and  appreciate,  and  the  greatest  good  for  all  concerned 
and  the  public,  whatever  that  is,  is  conserved  by  both  sides  of 
the  mining  industry  composing  their  differences  in  joint  con- 
ference, and  reaching  as  complete  an  agreement  regarding 
wages  and  working  conditions  as  they  can  for  a  specified  time, 
with  machinery  set  up  for  the  peaceful  adjudication  of  any 
disputes  that  may  arise,  without  stopping  the  industry. 


MODERN  INDUSTRY  AND  INDUSTRIAL  PEACE  283 

In  these  joint  negotiations  neither  side  gets  exactly  what 
it  wants;  but  if  they  are  in  earnest  they  will  find  a  common 
ground  where  agreement  can  be  reached  on  the  general  situa- 
tion. I  cannot 'claim  that  such  agreements  are  perfect  and 
are  never  violated,  but  that  itself  is  a  question  of  joint  con- 
sideration. 

Results  of  Mutual  Conferences 

A  joint  agreement  is  the  property  and  concern  of  both  par- 
ties to  it,  and  the  imperfections  and  shortcomings  manifest 
themselves  in  the  operation  of  the  agreement,  and  are  subject 
to  amendment  and  change  as  time  and  experience  warrant. 
When  either  side  to  an  agreement  violate  it  or  decry  it,  it  is 
proof  at  least  that  they  admit  failure  as  far  as  they  are  con- 
cerned. I  believe  there  is  enough  intelligence  and  common 
sense  in  the  mining  industry  to  deal  with  that  industry  as  it 
deserves,  and  know  that  the  best  interests  of  everybody  are 
best  conserved  by  so  doing.  Questions  of  competition,  cost 
of  production,  freight  rates,  etc.,  are  just  as  moot  questions 
in  these  conferences  as  anything  else,  and  where  the  facts 
are  all  brought  out,  it  is  hardly  likely  that  any  set  of  workers 
with  full  knowledge  of  what  it  means  would  legislate  them- 
selves out  of  an  industry  in  a  particular  locality  for  the  sake 
of  something  on  paper. 

Methods  of  pay,  whether  by  the  day  or  piece-work,  the 
length  of  the  work-day,  the  best  methods  of  handling  disputes, 
guarantees  that  the  property  should  continue  in  operation 
pending  the  settlement  of  disputes,  are  all  questions  for  con- 
sideration in  the  joint  conference.  Neither  side  can  deal 
satisfactorily  with  these  questions  by  itself.  The  workers' 
movement  and  the  employers'  movement  constitute  a  joint 
organization,  each  with  the  same  voting  power.  In  these 
conferences  the  bars  should  be  down  and  either  side  privi- 
leged to  introduce  any  question  or  idea  they  desire.  No  mat- 
ter can  be  adopted  until  it  receives  the  unit  vote  of  both  sides, 
and  any  matter  that  does  not  receive  such  vote  can  be  set  aside 
or  discarded  for  that  contract  period.  In  the  operation  of 
these  joint  agreements  many  things  might  occur  that  would 
prompt  either  side  to  offer  changes  or  amendments  to  the  next 
agreement  that  would  be  mutually  beneficial  to  both  sides. 
If  competitive  conditions  warrant,  an  agreement  might  be 


284  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

negotiated  for  an  entire  State,  in  other  cases  for  a  locality, 
where  geologic  and  competitive  conditions  warrant.  Those 
directly  involved — the  operators  and  the  miners — will  know 
best  about  this. 

Confidence  Replaces  Former  Suspicion 

With  these  relations  established,  a  greater  confidence  and 
a  better  feeling  is  established  between  the  two  parties  where 
discord,  suspicion  and  friction  formerly  existed.  Better  co- 
operation is  assured  and  greater  efficiency  manifested  all  along 
the  line.  The  workers  feel  that  they  are  admitted,  to  some 
extent,  to  a  voice  in  the  councils  of  industry.  The  human 
equation  has  been  recognized  to  the  betterment  and  profit 
of  all. 

I  have  been  instrumental  and  helpful  in  negotiating  many 
agreements.  I  never  yet  saw  one  that  gave  either  side  just 
what  it  wanted.  If  you  were  to  give  me  full  authority  to 
write  a  miners'  agreement  for  the  great  copper  industry,  it 
would  undoubtedly  be  a  fine  agreement  for  the  miners  and 
smeltermen,  but  it  might  be  unsatisfactory  and  unworkable 
from  an  operator's  viewpoint.  But  I  never  saw  one  of  these 
agreements,  negotiated  in  the  open,  without  undue  advantage 
on  either  side,  but  what  was  beneficial  to  the  industry. 

The  only  way  our  old  antagonism  will  cease,  the  only  way 
unreasonable  men  and  fanatics  will  be  permanently  eliminated 
from  the  scene,  is  by  equitable  and  candid  joint  relations. 
There  are  men  on  both  sides  of  the  proposition  that  the  indus- 
try would  be  better  without.  There  are  employers  who  still 
stick  to  the  idea  that  they  have  the  immortal  right  to  dictate 
terms  absolutely,  without  considering  the  workers  in  the 
smallest  degree ;  and  there  are  those  in  the  ranks  of  the  work- 
ers whose  purpose  it  is  to  stir  up  discord,  hamper  production, 
fan  the  flames  of  hatred  and  discontent,  gather  in  a  critical 
situation  like  vultures  around  a  carcass,  and  when  their  mis- 
sion has  been  accomplished  and  there  is  no  more  hell  to  raise, 
they  fold  their  tents  and  steal  away  to  other  places,  leaving 
their  poor  dupes  to  hold  the  sack  while  heralding  the  social 
revolution  in  other  fields.  Where  no  joint  relation  or  under- 
standing exists,  there  is  always  an  open  season  for  the  rum- 
dum  revolutionist.  These  periodical  tie-ups  that  lead  no- 
where, together  with  the  cost  of  maintaining  forces  that  pre- 


MODERN  INDUSTRY  AND  INDUSTRIAL  PEACE  285 

vent  intelligent  organization,  add  to  the  cost  of  production, 
and  might  properly  be  figured  as  unpaid  wages  of  the  work- 
ers, as  compared  to  a  happier  and  more  humane  arrangement. 
Many  of  you  had  an  opportunity  to  see  the  working  of  joint 
relations  in  the  metalliferous  industry  during  the  war.  This 
industry  is  not  adequately  organized  and,  as  a  result,  has 
more  than  its  share  of  I.  W.  W.  sentiment. 

Work  of  the  Department  of  Labor 

In  1917  the  President's  Mediation  Commission  visited  Ari- 
zona and  other  points  in  the  West.  Strikes  were  prevalent 
throughout  the  copper  fields.  A  plan  of  settlement  was 
worked  out  whereby  the  men  returned  to  work,  committees 
were  elected  at  the  various  mines  and  smelters  who  would 
endeavor  to  adjust  disputes  with  the  management,  and  if 
unable  to  do  so,  such  disputes  were  to  be  submitted  to  a  repre- 
sentative of  the  Department  of  Labor.  This  was  sort  of  a 
tri-party  agreement,  set  up  for  the  period  of  the  war,  to  main- 
tain industrial  peace  and  a  maximum  production  of  copper  for 
the  war  period.  I  was  interested  in  the  program.  We  deter- 
mined that  a  program  should  be  worked  out  that  would  safe- 
guard the  interests  of  the  workers  and  prevent,  in  so  far  as  it 
was  humanly  possible,  any  interruption  in  the  production  of 
copper.  So  in  the  poorly  organized  copper  fields,  with  scanty 
restraint  of  the  evil  influences  of  I.  W.  W.-ism  from  the 
national  labor  movement  in  fields  where  this  misguided 
philosophy  was  rampant,  peace  was  established  and  uninter- 
rupted production  maintained.  No  basic  industry  gave  a  bet- 
ter account  of  itself  during  hostilities.  I  doubt  if  many  of 
you  realize  the  dangerous  situation  existing  in  that  industry, 
whereby  men,  some  undoubtedly  actuated  by  sinister  motives 
and  serving  questionable  interests,  were  prepared  to  create 
havoc  and  chaos  by  the  medium  of  wildcat  strikes,  shutting 
down  of  smelters  and  in  jurisdictional  disputes.  Some  were 
merely  misguided,  some  were  quite  wrong.  I  personally  gave 
my  time  and  attention  where  it  was  needed,  went  directly  up 
against  some  of  these  baneful  influences  and  co-operated  with 
the  program  in  every  way.  We  were  all  successful,  and  that 
industry  went  through  from  that  time  on  without  a  cessation 
of  work. 

But  here  is  another  example :    On  the  signing  of  the  armis- 


286  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

tice,  so  successfully  did  this  program  work  that  the  producers 
had  approximately  1,000,000,000  pounds  of  copper  on  their 
hands,  and  the  Allies  had  a  similar  quantity  of  metal.  A 
panicky  situation  was  created,  and  I  believe  copper  that  was 
in  transit  for  the  Government  was  refused,  and  there  was 
the  threat  or  danger  of  the  Government  throwing  its  copper  on 
the  market  for  what  it  would  bring.  An  unusual  condition  re- 
sulted therefrom.  Prices  dropped,  which  very  naturally  mani- 
fested itself  in  the  earnings  of  the  men.  So  we  decided  that 
here  was  another  chance  to  recognize  in  the  open  the  human 
equation.  We  invited  the  representatives  of  the  workers  and 
the  producers  in  the  copper  States  to  attend  a  conference  in 
the  Department  of  Labor  Building  for  a  frank  discussion.  If 
some  of  you  think  it  an  easy  matter  to  convince  men  that  the 
better  part  of  wisdom  lay  in  accepting  a  reduction  in  wages 
of  about  a  dollar  a  day  in  the  face  of  an  increasing  cost  of 
living,  just  try  it  some  time.  We  gathered  and  went  over 
every  phase  of  the  situation.  There  was  naturally  nothing 
but  antagonism  at  first  on  one  part  of  the  conference,  but  a 
careful,  dispassionate  analysis  of  the  stern  facts  eventually 
demonstrated  to  all  the  necessity  of  what  was  ultimately 
done,  a  unanimous  agreement  to  accept  the  unavoidable  reduc- 
tion, and  every  endeavor  was  made  on  the  part  of  the  operators 
not  to  close  down  any  of  the  plants,  and  where  the  produc- 
tion was  reduced  an  equitable  division  of  what  work  there 
was  maintained.  I  would  not  have  advocated  or  subscribed 
to  this  policy  had  I  not  been  convinced  that  any  other  method 
would  have  been  rank  folly  under  the  circumstances.  It  was 
agreed  to  unanimously,  and  each  delegate  pledged  himself  to 
advise  its  adoption  on  his  return  home. 

Surely  these  two  incidents  carry  a  lesson  worth  knowing. 
In  the  event  of  closing  down  the  industry  by  either  side  at 
that  particular  time,  God  knows  what  the  results  would  have 
been.  Here  was  a  case  where  joint  relations  brought  good 
into  a  mighty  uncertain  situation. 

We  sometimes  draw  the  wrong  conclusions.  Some  of  us 
may  be  like  the  Cousin  Jack  who  was  shopping  down  in  Sacra- 
mento. He  had  the  hobby  that  a  miner  would  not  work 
properly  except  in  a  red  flannel  shirt.  The  saleslady  was  out 
of  red  flannel  and  was  trying  to  convince  him  that  the  other 
colors  of  flannel  were  just  as  good,  when  he  answered:  "Look 


MODERN  INDUSTRY  AND  INDUSTRIAL  PEACE  287 

here,  lass,  I  like  that  red  flannel ;  when  he's  cold  and  wet,  he's 
always  warm  and  comfortable." 

The  Human  Equation  in  Industry 

Germany  had  a  wonderful  organization.  I  wonder  how 
many  of  us  realize  how  near  she  came  to  taking  the  world. 
Where  is  the  man  who  can  explain  how  the  forces  of  Imperial 
Germany  were  turned  back  at  the  battle  of  the  Marne?  As  a 
matter  of  cold  logic,  they  should  have  gone  through  to  the 
Channel  ports  and  bombarded  the  cliffs  of  Dover  with  their 
long-range  artillery.  If  the  Germans  had  been  as  intelligent 
as  they  are  industrious,  they  would  have  taken  the  world. 
They  builded  and  planned  and  schemed  in  a  way  that  was 
marvelous.  They  thought  to  catch  an  unsuspecting  world 
asleep.  They  sought  to  practice  duplicity  and  dishonor  on 
such  a  scale  that  the  world  could  not  realize  or  be  sufficiently 
aroused  till  it  was  too  late.  Explanations  could  be  made  from 
the  vantage  point  of  the  victor — that  the  end  justified  the 
means.  They  almost  did  catch  the  world  asleep.  They  nearly 
went  to  Paris.  But  with  all  their  diabolical  scheming  and 
organization,  they  were,  after  all,  mere  disciples  of  material- 
ism. They  do  not,  never  have,  nor  ever  will  understand  the 
great  human  equation.  It  was  this  human  equation  that 
saved  the  world  from  the  domination  of  Germany. 

I  am  by  nature  an  optimist.  There  is  nothing  in  this  world 
to  be  afraid  of.  I  have  lived  and  traveled  over  this  world 
under  all  kinds  of  conditions,  adverse  and  otherwise.  I  would 
not  exchange  my  experiences  for  anything  in  the  world.  And 
I  know  this  world  is  growing  better;  that  a  better  under- 
standing between  man  and  man  is  being  brought  about.  I 
realize  that  as  long  as  the  desire  for  progress  is  prevalent  in 
the  mind  and  heart  of  man,  the  battle  will  be  more  or  less  to 
the  strong.  I  have  seen  the  boundless,  undeveloped  resources 
of  this  continent  and  Mexico.  I  have  seen  the  great  field  for 
re-building  and  better  planning  in  Europe.  I  believe  that  a 
better  era  is  opening  for  all  the  children  of  men,  and  I  feel 
that  the  future  holds  a  greater  measure  of  happiness  for  men, 
women  and  little  children  than  it  has  known  heretofore.  I 
believe  there  is  a  growing  sentiment  among  the  pioneers  and 
builders  of  industry  that  they  are  able  to  win  fame  and  for- 
tune without  the  exploitation  of  the  toiling  masses,  and  I 


288        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

believe  that  the  right  ideas  will  prevail  in  the  same  propor- 
tion as  men  and  women  will  stop  and  consider  the  other  fel- 
low's argument  and  status,  and  survey  their  affairs  from  the 
viewpoint  of  the  comomn  good  and  the  advancement  of  the 
race. 

We  are  all  pretty  much  alike  in  our  views  and  desires  and 
aspirations.  We  want  to  live  better  lives;  we  want  to  create 
a  better  environment  for  our  children  that  they  may  become 
better  men  and  women.  The  luxury  of  today  properly 
becomes  the  necessity  of  tomorrow.  There  is  no  way  by 
which  orderly  progress  and  industrial  peace  may  be  main- 
tained, in  my  opinion,  other  than  the  recognition  of  the  human 
equation  and  equitable  joint  relations.  By  this  procedure  a 
greater  measure  of  orderly  progress  can  be  guaranteed  and 
the  greatness  of  our  beloved  Republic  safeguarded.  And  in 
addition  to  the  security  and  happiness  in  industry,  a  field  for 
joint  mutual  effort  on  the  legislative  field  is  opened  that  does 
not  exist  now,  to  the  detriment  of  the  mining  industry  as  a 
whole. 

A  Desirable  Condition 

This  address  is  incomplete,  yet  has-  taken  up  considerable 
of  your  valuable  time.  I  appreciate  fully  the  opportunity  of 
expressing  these  few  thoughts  as  they  have  occurred  to  me. 
I  have  no  thought  that  you  will  unanimously  agree  with  me 
in  all  that  I  have  set  before  you,  but  if  any  word  of  mine 
should  start  any  of  you  to  ponder  seriously  over  the  economic 
situation,  to  really  reason  it  out  according  to  the  rule  that  two 
and  two  make  four,  I  feel  that  my  visit  to  the  Congress  has 
not  been  in  vain.  Take  some  time  from  your  busy  lives  to 
analyze  the  theory  and  practice  of  better  understanding;  try 
some  phase  of  it  out,  if  only  in  a  local  way ;  deal  with  the  situ- 
ation intelligently  and  in  the  open,  and  you  will  see  that,  with 
all  sentiment  aside,  it  is  sound  business  policy. 

Let  us  not  live  in  the  memories  of  the  past,  but  rather  let 
us  face  the  terrific  situation  that  exists  in  these  critical  hours 
throughout  the  world,  with  the  conviction  that  there  is  enough 
intelligence  and  enough  humanity  in  the  mining  industry  to 
cope  with  all  its  problems,  to  establish  a  better  understanding 
in  this  world,  to  the  end  that  all  men  who  do  the  useful  work 
of  our  country  by  hand  or  brain  may  bask  in  the  sunlight  of 
economic  liberty  and  peace. 


289 


WHY    COLORADO    MINING    ENGINEERS    ADOPTED    THE 
OPEN-SHOP  MOVEMENT 

By  CHARLES  A.  CHASE 
Manager,  Liberty  Bell  Mines,  Telluride,  Colorado. 

A  committee  of  the  Colorado  section,  American  Institute  of 
Mining  and  Metallurgical  Engineers,  in  May  last  proposed, 
and  the  section  adopted,  the  following  resolution : 

"Freedom  of  thought  and  speech  and  of  legal  action 
and  untrammeled  contract  are  guaranteed  by  the  Con- 
stitution of  the  United  States;  hence  we  assert  these 
rights  as  inalienable  to  each  and  every  citizen. 

"We  believe  every  citizen  shall  be  free  to  exercise  these 
rights,  to  the  end  that  he  or  she  may  earn  a  living  for  self 
and  dependents,  regardless  of  political,  religious  or  labor 
affiliations. 

"Therefore,  everyone  must  have  the  right  to  join  a 
union  or  not,  and  the  use  of  force,  violence,  blacklist, 
boycott  and  lockout  as  a  means  of  influencing  such  indi- 
vidual action  is  to  be  condemned  as  vicious  and  against 
public  welfare." 

This  resolution  had  no  special  reference  to  present  condi- 
tions in  Colorado,  but  rather  echoed  national  conditions;  in 
other  words,  it  was  our  patriotic  answer  to  a  national  roll- 
call.  Civic  and  business  organizations  from  coast  to  coast 
passed  similar  resolutions.  At  a  time  of  scarcity  of  labor, 
quite  unprecedented  in  the  history  of  the  country,  and  with 
labor  making  every  effort  to  entrench  the  closed  shop,  these 
resolutions  were  a  timely  iteration  and  reiteration  of  a  basic 
principle. 

How  the  Resolution  Was  Received 

The  resolution  is  necessarily  a  challenge.  Many,  and  among 
them  organized  labor  in  large  part,  look  upon  such  expres- 
sions as  a  challenge  to  the  unions  to  battle  again  over  the 
old  question  of  union  recognition,  but  the  real  challenge  to 
labor  is  admirably  expressed  by  Sir  Charles  C.  Allom,  a  Brit- 


290  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

ish  manufacturer,  in  a  New  York  speech:  "Labor  should 
demand  of  its  trades  unions  that  they  shall  prove  to  the  world 
that  they  have  brains,  and  that  labor's  force  is  the  force  of 
intellect,  and  not  of  mere  numbers.  Labor,  with  its  proved 
power  to  coerce  industry,  should  now  proceed  to  use  its  power 
in  a  civilized  instead  of  an  ignorant  and  uncivilized  manner." 
I  quote  him,  because  he  expressed  the  principal  thought  in 
my  own  argument — that  intellect  must  govern  industry. 

The  resolution  is  equally  a  challenge  to  owner  and  manager, 
which  is  of  special  interest  to  us,  and  I  can  give  you  no  better 
statement  of  it  as  a  challenge  than  to  quote  one  of  the  prin- 
ciples (No.  6)  enunciated  by  the  National  Chamber  of  Com- 
merce : 

"The  wage  of  labor  must  come  out  of  the  product  of  indus- 
try, and  must  be  earned  and  measured  by  its  contribution 
thereto.  In  order  that  the  worker,  in  his  own  and  the  general 
interest,  may  develop  his  full  productive  capacity,  and  may 
thereby  earn  at  least  a  wage  sufficient  to  sustain  him  upon 
a  proper  standard  of  living,  it  is  the  duty  of  management  to 
co-operate  with  him  to  secure  continuous  employment  suited 
to  his  abilities,  to  furnish  incentive  and  opportunity  for 
improvement,  to  provide  proper  safeguards  for  his  health 
and  safety,  and  to  encourage  him  in  all  practicable  and  reason- 
able ways  to  increase  the  value  of  his  productive  effort." 

Education  of  the  Worker 

A  few  sentences  from  the  address  of  Mr.  H.  H.  Knox  as  he 
retired  from  the  presidency  of  the  Mining  and  Metallurgical 
Society  will  illuminate  the  point.  He  makes  clear  the  mental 
stagnation  of  the  worker : 

"*  *  *  but  what  of  the  great  inarticulate  masses  of 
workers  who  do  not  write  technical  papers  nor  read  them? 
What  profitable  intercourse  have  they  ?  It  is  no  mere  fancy  to 
liken  modern  industrial  wage-earners  to  the  primitive  races 
of  antiquity  or  the  backward  peoples  of  the  present. 

"If,  as  I  believe,  the  mental  stagnation  of  the  laboring 
classes  is  attributable  to  stagnant  environment,  then  evolu- 
tion can  be  promoted  only  through  variation  of  the  environ- 
ment. *  *  *  At  all  events,  evolution  will,  if  I  may  hazard 
a  prediction,  lie  in  such  directions  as  will  summon  to  action 
the  latent  mentality  of  the  manual  laborers  and  so  blur  the 


THE  OPEN-SHOP  IN  COLORADO  291 

sharpness  of  the  line  now  separating  the  work  of  the  hand 
from  the  work  of  the  brain.  Through  such  movements  as 
these  lies  the  promise  of  a  new  era,  of  which  the  coming  can 
be  hastened  by  the  earnest  application  and  friendly  interest 
of  every  employer.  The  application  of  systems  of  similar 
aims  to  the  peculiar  conditions  of  mine  and  smelter  is  a  task 
that  will  tax  to  tlje  utmost  the  trained  faculties  and  disci- 
plined sympathies  of  the  engineer,  at  the  same  time  that  it 
challenges  his  ambition  by  the  breadth  of  the  prospect  opened 
out." 

The  quotation  from  the  United  States  Chamber  of  Com- 
merce represents  some  of  the  best  thought  of  the  country, 
and  the  phrases  given  were  concurred  in  almost  unanimously 
by  the  membership  voting.  In  passing,  I  may  call  your  attention 
to  the  excellent  authority  for  the  expression,  which  may  be 
found  in  that  part  of  the  Bible  that  designated  man  as  his 
brother's  keeper.  In  the  scheme  of  things,  the  more  fortunate 
must  assume  some  measure  of  responsibility  for  those  less 
fortunate.  By  natural  processes  of  selection,  which  govern 
in  the  main,  the  best  intellects  have  come  into  the  places  of 
responsibility.  We,  who  in  part  occupy  those  places,  there- 
fore, have  the  principal  burden  of  thinking  through.  In  my 
observation,  an  important  mark  of  a  great  man  is  the  ability 
and  will  to  think  clear  through  to  right  solution,  based  on 
fundamental  principle. 

However,  we,  as  owners  and  managers,  cannot  say  in  so 
many  words  to  labor  that  we  have  the  best  intellect,  and, 
therefore,  our  word  must  govern,  and  hope  to  get  away  with 
it,  but  if  we  really  have  the  best  intellect  and  apply  it,  by  that 
very  fact  we  can  gradually  sell  to  labor  (I  adopt  the  sales- 
man's expressive  phrase)  a  scheme  of  industrial  relations  that 
will  help.  I  do  not  say  that  it  will  be  a  prompt  solution — the 
road  is  too  long  for  that,  but  we  can  begin. 

On  the  other  hand,  note  Mr.  Allom's  injunction  to  labor 
to  prove  to  the  world  that  it  has  brains.  A  good  industrial 
motto  is :  "Let  the  best  brains  make  the  plan." 

Dull  Mining  and  Freedom  From  Labor  Troubles 

Colorado's  metal-mining  industry  has  been  too  unhealthy  in 
recent  years  to  make  a  good  prize  in  battle,  and  we  have  had 
peace,  and  the  open  shop  in  the  main.  Coal  mining,  on  the 


292  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

contrary,  has  been  active.  Wages  have  been  governed  by 
country-wide  schedules,  but  as  to  other  phases  of  industrial 
relations  the  industry  presents  remarkable  contrasts  between 
the  closed  shop,  as  applied  by  the  United  Mine  Workers  of 
America  on  the  one  extreme,  and  the  Colorado  industrial  plan 
of  employe  representation  of  the  Colorado  Fuel  &  Iron  Co.  on 
the  other  extreme.  The  former  calls  foe  no  comment.  The 
Colorado  industrial  plan  has  been  much  described,  but  for 
those  who  are  not  familiar  with  it  I  may  say  that  it  provides 
equal  employe  and  management  representation  in  each  of  four 
divisions : 

1 — Co-operation  and  conciliation, 

2_Safety, 

3 — Education  and  recreation,  and 

4 — Sanitation,  health  and  housing. 

We  hear  much  of  special  campaigns  of  Americanization,  but 
this  industrial  plan  must  Americanize.  It  is  courageous, 
sound  and  broad,  providing  representation  in  every  important 
branch  of  civic  activity.  It  meets  fairly  the  issue  of  union- 
ism. The  miner  may  carry  his  union  card  and  yet  work 
under  this  plan.  He  may  go  to  a  closed-shop  union  mine  if 
it  offers  more,  and,  plainly,  if  he  goes  in  great  numbers,  he 
will  deprive  these  mines  and  plants  of  necessary  labor,  but 
these  mines  have  had  at  least  their  share  of  labor.  The  plan 
has  now  operated  six  years  and  is  a  success.  In  .other  words, 
able  management  is  succeeding  in  selling  to  labor  a  plan  based 
on  better  intelligence,  courage  and  vision  than  any  program 
that  labor  has  offered  in  this  field. 

Results  of  Such  Representation 

I  wish  to  offer  a  comment  on  one  implication  in  the  success 
of  this  plan  of  representation.  We  have  heard  of  the  demo- 
cratization of  industry,  and  yet  at  this  time  the  best  minds 
of  the  country  believe  our  future  safety  politically  lies  in  a 
swing  back,  away  from  our  approach  to  the  purely  democratic 
and  toward  the  representative  form  of  Government.  It  is 
possible  for  the  body  politic  to  judge  the  fitness  of  a  man  as 
its  representative,  but  unthinkable  that  it  can  pass  wisely  on 
the  complexities  of  legislation.  Therefore,  instead  of  indus- 
try absorbing  weakness  from  a  wrong  political  system,  indus- 


THE  OPEN-SHOP  IN  COLORADO  293 

try  may  well  prove  afresh  the  value  of  representative  govern- 
ment. I  have  mentioned  the  Colorado  industrial  plan  only. 
It  is  certainly  the  most  important  example  of  employe  repre- 
sentation in  Colorado.  In  general,  it  is  like  the  plan  for  shop 
committees  elsewhere,  but  stands  out  for  the  completeness  of 
its  written  framework  of  principles,  to  which  the  men  attach 
great  and  increasing  importance.  I  acknowledge  Mr.  Wel- 
born's  courtesy  in  discussing  the  plan  with  me. 

Having  mentioned  the  Colorado  plan  as  a  local  example  of 
a  plan  fathered  by  owners  and  management,  I  may  go  afield 
so  far  as  the  clothing  makers  of  the  Amalgamated,  where 
union,  under  able  leadership,  has  sold  to  that  industry  a 
scheme  for  employe  representation.  This  work  is  notable, 
because  unionism  accepted  as  a  basic  consideration  the  wel- 
fare of  the  industry.  Unionism  in  this  case  guarantees 
production  and  assumes  the  burden  of  disciplining  workers. 
The  shop  is  nominally  open,  but,  in  fact,  a  trifling  minority 
have  kept  out  of  the  unions,  but  unionism  seems  to  have  justi- 
fied its  existence  and  its  right  to  confidence  by  demonstrating 
that  it  has  brains. 

My  theme  has  been  the  requirement  that  intelligence,  God- 
given,  shall  be  permitted  to  operate  in  industry  as  against 
the  force  of  great  wealth  wrongly  applied  on  the  one  side,  or 
of  great  numbers  wrongly  led  on  the  other.  The  principle 
cannot  be  over-emphasized,  and  it  is  by  adherence  to  great 
principles  that  we  progress. 

I  have  not  argued  expressly  against  the  closed  shop  as  we 
know  it  today,  because  I  believe  it  unnecessary.  We  are 
probably  a  unit  in  believing  it  unthinkable  if  the  nation  is  to 
progress.  The  complaint  that  it  is  unfair  to  the  non-union 
man  is  as  nothing  as  compared  with  the  fact  that  it  repre- 
sents a  barrier  to  the  free  functioning  of  the  best  intelligence, 
whether  of  management  or  labor.  That  the  country  cannot 
afford. 


294  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

LABOR  CONDITIONS  IN  THE  BISBEE  DISTRICT 
By  ARTHUR  NOTMAN 

Superintendent  Mine  Department,  Copper  Queen  Branch,  Phelps  Dodge 
Corporation,  Bisbee,  Ariz. 

In  the  following  paper  I  will  endeavor  to  give  a  brief 
outline  of  working  conditions  in  the  Bisbee  district  at  the 
present  time,  with  particular  reference  to  the  operations  of 
the  Phelps  Dodge  Corporation.  Our  good  friends  and  neigh- 
bors, the  Calumet  &  Arizona  Mining  Co.  and  the  Shattuck- 
Arizona  and  Denn-Arizona  companies,  are,  in  general,  work- 
ing along  parallel  lines.  The  figures  shown,  however,  apply 
solely  to  the  Copper  Queen  Branch  of  the  Phelps  Dodge  Cor- 
poration : 

PERSONNEL. 

Number 
of  men  on 
payroll.          Citizens.  Married.        Single. 

Underground,  Oct.  1,  1920  1541  1163—75%  911—59%  632 
Steam-shovel  operations  1030  369 — 36%  424 — 41%  606 
Mechanical  department..  279  256 — 91%  155 — 56%  124 

Total    2850         1788—62%         

Mill   construction 462  81— 17%        199—43%        263 

HOURS  OF  LABOR: 
Underground: 

Eight  hours,  collar  to  collar  (one-half  hour  for  lunch  on 
company's  time). 

All  other  Departments: 

Eight  hours  (one-half  hour  for  lunch  on  employe's  time) . 

WORKING  DAYS  PER  WEEK  : 
Underground: 

Six  days  per  week  (excepting  necessary  repairs). 

Other  Departments: 
The  same. 

The  work  is  carried  on  in  two  shifts  of  eight  hours  each, 
alternating  from  day  to  night  every  two  weeks,  excepting  for 
a  small  number  of  jobs  which  require  continuous  operation. 


LABOR  CONDITIONS  AT  BISBEE,  ARIZONA  295 

WAGES  : 

Wages  are  on  a  sliding  scale,  based  on  the  average  selling 
price  for  copper  as  shown  by  the  Engineering  and  Mining 
Journal  quotations  for  the  preceding  month.  The  base  was 
established  at  $4  per  day  for  miners  on  15-cent  copper,  with  an 
increment  of  alternately  10  and  15  cents  for  each  increase  of 
one  cent  per  pound  in  the  selling  price.  Owing  to  various 
adjustments  made  during  the  war  period  and  since  the  armis- 
tice, the  present  wage  is  $6.10  per  day  for  miners.  These 
changes  were  made  at  the  request  of  the  Government  with  a 
view  to  stabilizing  labor  conditions  in  the  industry.  Recogni- 
tion of  the  increased  cost  of  living  played  a  part  in  these  arbi- 
trary adjustments  that  were  made  in  the  original  scale  and 
still  do  so.  As  a  result,  wages  have  been  maintained  at  their 
present  level  in  spite  of  the  falling  copper  market. 

The  men  are  paid  semi-monthly  by  checks  on  the  local 
banks. 

The  rates  paid  other  labor  classifications  bear  a  fixed  rela- 
tion to  the  miners'  rate.  At  the  present  time  the  average  rate 
paid  all  labor,  exclusive  of  salaried  employes,  is  about  $5.15 
per  day. 

All  rough  labor  on  the  surface,  including  steam-shovel  oper- 
ations and  mill  construction,  is  Mexican,  to  whom  the  lowest 
rate  paid  is  $3.25  per  day. 

BONUS  WORK  : 

In  addition  to  direct  wages,  from  25  to  30  per  cent,  of  all 
employes  participate  in  bonus  earnings.  Underground,  all 
men  engaged  on  development  work  are  given  an  opportunity 
to  earn  individual  production  bonuses,  based  on  past  perform- 
ance in  the  various  sizes  and  designs  of  openings  and  class  of 
ground.  Responsibility  for  the  classification  of  the  ground 
and  the  setting  of  standards  is  assigned  to  the  engineering 
department,  and  not  the  operating  department.  A  small  group 
of  men  cover  this  work  for  the  whole  mine.  The  object  desired 
is  to  equalize  opportunity  and  give  a  man  the  chance  to  earn 
the  same  bonus  for  the  same  intelligence  and  effort,  regardless 
of  the  class  of  ground  or  kind  of  opening  which  he  is  driving, 
the  boss  or  the  general  conditions  surounding  that  portion  of 
the  mine  in  which  he  is  employed.  The  system  adopted  differs 
from  many  in  general  use  in  that  the  classification  is  made  as 


29G  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

the  heading  is  driven  and  the  standards  varied  accordingly. 
They  are  not  set  in  advance  and  maintained  for  a  given  period 
of  time  regardless  of  changing  conditions.  The  standard  is 
expressed  as  so  many  feet  per  man-shift,  and  any  economy  in 
labor  is  divided  equally  between  the  men  and  the  company. 
For  example:  A  man  who  doubles  the  standard  of  perform- 
ance will  earn  as  bonus  one-half  his  daily  wage  and  the  com- 
pany will  secure  this  additional  footage  at  one-half  the  average 
labor  cost  for  similar  work.  The  system  is  being  extended  to 
include  stoping  operations.  It  seems  probable  that  eventually 
75  per  cent  of  the  underground  force  can  be  employed  on 
bonus  work.  The  men  engaged  in  the  classification  of  ground 
and  setting  of  standards  are,  in  part,  technically  trained  engi- 
neers, and,  in  part,  skilled  miners.  Any  dispute  as  to  stand- 
ards which  cannot  be  adjusted  between  the  individual  and  the 
head  of  the  department  can  be  referred  to  the  superintendent 
of  the  mine  department.  If  the  individual  is  still  dissatisfied, 
the  matter,  at  his  request,  will  be  investigated  by  the  Employes' 
Grievance  Committee  and  presented,  with  their  recommenda- 
tions, to  the  manager  for  final  decision. 

All  bonuses  are  paid  on  checks  separate  from  the  regular 
pay-checks. 

In  the  steam-shovel  operations  conditions  seem  to  call  for 
a  different  scheme,  and  an  over-all  or  gang  bonus  has  been 
adopted.  The  standard  is  expressed  as  so  many  yards  per 
man-shift  for  every  man  engaged  below  the  rank  of  steam- 
shovel  superintendent,  arid  is  based  on  past  performance  and 
general  conditions.  Any  labor  economy  shown  by  the  organi- 
zation as  a  whole,  due  to  better  methods,  better  equipment, 
better  co-operation  or  more  earnest  and  intelligent  effort,  is 
shared  equally  between  the  men  and  the  company.  For 
example:  If  the  yardage  per  man-shift  shows  a  10  per  cent, 
increase  over  the  standard  set  for  the  month,  each  employe 
will  receive  a  bonus  check  for  5  per  cent,  of  his  earnings  for 
that  month,  whether  he  has  worked  one  shift  or  full  time. 
Daily  records  are  kept  and  curves  plotted  showing  cumula- 
tively the  bonus  earned  to  date  based  on  car  yardages.  This 
yardage  is  subject  to  correction  at  the  end  of  the  month,  and 
the  bonus  or  economy  dividend  paid  is  based  on  the  engineer- 
ing department's  monthly  measurements  of  yardage  moved 
from  the  various  benches. 


LABOR   CONDITIONS    AT   BISBEE,   ARIZONA  297 

The  advantage  and  disadvantages  of  the  individual  or  gang 
bonus  are  fairly  obvious,  and  I  will  not  attempt  to  discuss 
them  here.  General  conditions  and  personal  preference  will 
determine  the  choice.  Neither  will  survive  if  not  adminis- 
tered in  a  spirit  of  fair  play,  and  must  be  protected  from 
personal  prejudice  and  partiality  on  both  sides. 

SAFETY  DEPARTMENT: 

The  work  of  this  department  is  conducted  in  a  manner 
similar  to  that  now  familiar  to  all  throughout  the  industry. 
Our  particular  practice  has  been  adequately  described  in  sev- 
eral papers  presented  by  Mr.  W.  W.  Gidley,  safety  inspector 
of  the  Copper  Queen  Branch,  Phelps  Dodge  Corporation. 

A  system  of  bonuses  for  foremen,  for  accident  prevention, 
has  been  of  assistance  in  establishing  a  record  of  which  we 
feel  proud. 

HOSPITAL  DEPARTMENT: 

An  up-to-date  hospital  and  dispensary  are  maintained  by 
the  company,  manned  by  an  adequate  staff  of  surgeons,  phy- 
sicians and  nurses,  who  care  for  injuries  to  and  the  sickness 
of  employes  and  their  families.  For  this  service,  men  with 
dependents  are  charged  $2,  and  those  without  dependents 
$1.25  per  month.  The  deficits  for  the  past  four  years  which 
were  met  by  the  company  were  as  follows : 

Deficit  1916 $13,165.21 

Deficit  1917 18,886.61 

Deficit  1918 22,810.56 

Deficit  1919 '..... 29,569.82 

In  spite  of  increasing  costs,  the  charges  have  not  been 
increased.  Copies  of  the  rules  and  regulations  covering  this 
department  are  furnished  the  employe  on  entering  the  service. 

EMPLOYES'  BENEFIT  ASSOCIATION: 

To  provide  for  accident  and  health  insurance  not  covered  by 
the  State  Compensation  Act,  an  Employes'  Benefit  Association, 
established  in  1910,  was  reorganized  in  1912,  after  the  passage 
of  this  Act,  and  is  maintained  by  joint  contributions  from  the 
members  and  the  company.  The  funds  are  guaranteed  by  the 
company  and  administered  by  a  board  of  nine  trustees;  four 
of  them  are  elected  by  the  members  and  four  appointed  by  the 
manager.  .The  manager  is  chairman  of  the  Board.  Contribu- 


298  PROCEEDINGS   OF  AMERICAN   MINING   CONGRESS 

tions  from  the  membership  are  at  the  rate  of  2  per  cent,  of  the 
daily  rate  of  wages,  computed  on  an  amount  not  to  exceed 
$150  per  month.  Benefits  are  calculated  in  a  similar  manner. 
The  company's  contribution  is  as  follows :  At  the  end  of  each 
year,  if  the  average  membership  in  the  Benefit  Association 
during  that  year  has  equaled  50  per  cent,  of  the  average  total 
number  of  employes  of  the  corporation's  Copper  Queen  Branch, 
exclusive  of  Mexican  employes,  the  corporation  will  contribute 
$15,000  to  the  fund.  The  corporation  agrees  to  advance  funds 
temporarily  when  necessary  for  payments  of  benefits  at  due 
dates,  to  guarantee  the  safety  of  the  fund  and  to  pay  semi- 
annual interest  on  the  average  balances  at  4  per  cent.  A  copy 
of  the  rules  and  regulations  of  the  association  is  furnished 
each  white  employe  on  entering  the  service  and  his  member- 
ship solicited.  Membership  is  voluntary.  Eighty-seven  per 
cent  of  the  white  employes  are  now  members. 

PENSIONS  : 

The  company  has  established  a  system  of  pensions  for 
employes  who  have  been  in  the  service  15  years  or  longer.  This 
system  applies  to  all  who,  in  the  opinion  of  the  company,  have 
become  physically  disqualified  for  further  service.  The  length 
of  service  is  reckoned  from  the  date  of  first  employment.  The 
amount  of  pension  allowed  is  2  per  cent,  of  the  average  annual 
wages  for  the  three  years  preceding  the  employe's  retirement. 
The  payments  are  made  regularly  in  a  manner  similar  to  pay- 
ments of  salaries  and  wages.  At  the  present  time  there  are 
74  on  the  pension  roll. 

HOUSING  : 

The  company  has  long  recognized  the  importance  of  housing 
its  employes  in  a  suitable  manner.  The  Cochise  Building  & 
Loan  Association  has  made  a  remarkable  record  in  aiding  the 
workingmen  in  the  district  to  secure  their  own  homes.  In 
doing  this  they  have  been  liberally  assisted  by  the  Phelps 
Dodge  Corporation  and  the  Calumet  &  Arizona  Mining  Co.  In 
addition,  the  two  companies  named,  at  the  suggestion  of  the 
late  Dr.  James  Douglas,  have  financed  an  organization  for  the 
purpose  of  loaning  funds  for  a  period  of  100  months  to  em- 
ployes to  erect  their  own  homes  of  modern  type ;  the  money  to 
be  paid  back  with  a  low  rate  of  interest. 


LABOR   CONDITIONS    AT   BISBEE,    ARIZONA  299 

LIBRARY  AND  READING-ROOMS: 

A  public  library  is  maintained  by  the  company  exclusively. 
Eight  thousand  volumes  are  on  file ;  also  24  daily  papers  and  60 
magazines.  It  is  well  patronized  and  renders  an  excellent 
community  service. 

Y.  M.  C.  A.ANDY.  W.  C.  A.: 

Substantial  and  well-equipped  buildings  have  been  fur- 
nished, rent  free,  to  the  Y.  M.  C.  A.  and  Y.  W.  C.  A.  organiza- 
tions for  the  conduct  of  their  work.  Liberal  contributions  are 
made  to  both  organizations  for  current  operating  expenses. 

EMPLOYMENT  AND  DISCHARGE: 

All  men  seeking  employment  make  application  to  the  employ- 
ment agent.  After  satisfactory  personal  interview  and  inves- 
tigation, they  are  given  a  physical  examination  and  may,  at 
the  same  time,  be  examined  for  membership  in  the  Employes' 
Benefit  Association.  Upon  passing  a  satisfactory  physical 
examination,  they  are  assigned  to  some  department  and  given 
a  card  stating  when,  where  and  to  whom  they  are  to  report, 
together  with  general  instruction  in  the  rules  and  regulations 
of  the  company,  and  such  advice  as  they  may  seem  to  require 
in  regard  to  living  conditions. 

If,  for  any  reason,  a  foreman  finds  an  employe  unsatisfac- 
tory, he  is  returned  to  the  employment  agent  with  a  recom- 
mendation for  discharge  or  transfer.  At  the  same  time,  the 
foreman  sends  the  agent  a  statement  of  the  reasons  for  his 
action.  The  latter  then  exercises  his  own  judgment  in  the 
matter  of  following  the  foreman's  recommendation.  The 
employe  may  appeal  from  such  decision  to  the  manager  of  the 
labor  department,  and  from  him  to  the  employes'  committee, 
who,  after  investigation,  will  report  and  make  recommenda- 
tion to  the  manager  of  the  company.  To  summarize,  the  right 
of  a  foreman  or  boss  to  work  only  such  men  as  are  satisfactory 
to  him  remains  unquestioned,  but  the  right  of  summary  dis- 
missal from  the  service  of  the  company  has  been  centralized 
and  the  individual's  interest  protected. 

LABOR  DEPARTMENT: 

The  labor  department  is  under  the  direction  of  a  manager 
who  is  directly  responsible  to  the  manager  of  the  company. 


300  PROCEEDINGS/OF  AMERICAN  MINING  CONGRESS 

The  functions  of  this  department  are  to  supervise  the  follow- 
ing activities : 

1.  Employment  and  discharge. 

2.  Safety  department. 

3.  Hospital  department. 

4.  Employes'  Benefit  Association. 

5.  Pensions. 

6.  Employes'  representation. 

7.  Educational  department. 

8.  All  other  functions  generally  classed  as  welfare  work. 

Naturally,  close  co-operation  is  maintained  between  the 
operating  department  and  the  labor  department  in  all  matters. 
All  questions  of  labor  policy  are  formulated  by  the  manager  of 
the  company,  with  the  advice  and  counsel  of  the  assistant  man- 
ager, the  superintendent  of  the  mine  department  and  the 
manager  of  the  labor  department. 

EMPLOYES'  REPRESENTATION: 

A  number  of  years  ago  it  was  deemed  advisable,  inasmuch 
as  the  employes  contributed  to  the  support  of  the  hospital 
department,  that  they  should  have  a  voice  in  its  management. 
Consequently,  they  were  invited  to  elect  a  committee  whose 
duties  should  be  to  inspect  the  operation  of  the  hospital  depart- 
ment and  make  reports  and  recommendations  to  the  manager. 
Early  in  1917  the  duties  of  this  committee  were  enlarged  to 
cover  all  questions  of  welfare  and  grievances.  Early  in  the 
present  year  the  size  of  the  committee  was  increased  to  one 
representative  for  each  100  employes,  elected  by  divisions.  The 
name  was  also  changed  to  "Employes'  Conference  Committee." 
At  the  same  time  the  foremen  and  bosses  were  invited  to  elect 
a  similar  committee,  known  as  the  "Foremen  and  Bosses'  Con- 
ference Committee."  At  the  present  time  these  committees  are ' 
functioning,  under  the  supervision  of  the  manager  of  the  labor 
department,  in  an  advisory  capacity  to  the  manager  of  the 
company  and  his  staff  in  all  matters  concerning  the  welfare 
and  working  conditions  of  employes. 

These,  in  general,  are  the  conditions  under  which  men  in  the 
Bisbee  district  are  working. 

Perhaps,  in  our  desire  to  protect  the  rights  of  the  individual 
workman  in  industry,  there  may  be  a  tendency  to  overlook  the 


LABOR   CONDITIONS    AT   BISBEE,   ARIZONA  301 

importance  of  the  foreman  and  shift  boss.  To  do  this  in  any 
organization  is  like  attempting  to  construct  an  arch  without  a 
keystone.  With  this  fundamental  in  mind,  we  organized  our 
Foreman  and  Bosses*  Conference  Committee  to  ensure  the 
proper  presentation  and  consideration  of  their  function  in  the 
smooth  running  of  the  organization  as  a  whole. 

To  discuss  intelligently  the  so-called  "open-shop"  policy,  it 
is  first  necessary  to  define  the  term.  We  understand  it  to  mean 
that  no  man  shall  be  discriminated  against  for  membership  in 
or  affiliation  with  any  organization  whose  principles  are  not  in 
conflict  with  the  Constitution  of  the  United  States.  As  a 
result,  many  of  our  employes  are  and  have  been  for  years  mem- 
bers of  the  various  trade  unions  affiliated  with  the  American 
Federation  of  Labor.  Many  others  have  never  felt  the  neces- 
sity to  associate  themselves  with  the  trades-union  movement. 

We  acknowledge  the  value  of  trades-unionism ;  the  soundness 
of  many  of  its  professed  principles ;  the  honesty  and  sincerity 
of  many  of  its  leaders ;  and  its  necessity  where  other  and  per- 
haps better  means  of  securing  to  our  citizens  the  American 
right  of  equal  opportunity  to  all  are  not  available.  We  also 
recognize  that  men  have  the  sole  right,  individually  and  col- 
lectively, to  determine  when  and  by  what  means  they  shall  seek 
to  protect  themselves  in  this  right,  provided  they  are  within 
the  law.  When,  through  the  action  of  unscrupulous  leaders, 
the  unions  seek  to  deprive  their  fellow-citizens  of  that  right, 
they  weaken  their  own  cause. 

Trades-Unionism  Not  a  Requisite  to  Industrial  Peace 

We  do  not  believe  that  trades-unionism  as  now  conducted  is 
a  sine  qua  non  to  industrial  understanding  and  orderly  prog- 
ress. The  history  of  the  trades-union  movement  in  the  metal- 
mining  industry  in  the  West  shows  only  too  plainly  the 
ease  with  which  it  can  be  betrayed  into  the  hands  of  the 
enemies  of  our  country  through  the  insidious  process  of  bor- 
ing from  within  by  the  advocates  of  the  destruction  of  existing 
institutions. 

It  is  the  policy  of  wisdom,  therefore,  for  us  to  seek  a  mutual 
understanding  with  our  own  employes,  in  whom  we  have  con- 
fidence, and  whose  confidence  in  us  we  must  foster.  Our  faith 
in  American  institutions  demands  this  of  us.  In  the  light 
of  present  conditions,  adoption  of  the  laissez  faire  attitude 


302  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

towards  this  matter,  and  a  stand-pat  resistance  to  departure 
from  accustomed  methods  cannot  fail  to  alienate  our  employes, 
and  will  subject  the  industry  as  a  whole  to  the  uncertainties 
and  failures  of  divided  counsel. 

The  right  to  determine  when  and  how  the  scope  of  opera- 
tions shall  be  changed  is  a  function  of  management  and  cannot 
be  questioned  by  the  employes.  The  conditions  under  which 
human  labor  shall  be  employed  is  a  matter  of  mutual  agree- 
ment between  the  managers  of  industry  and  those  who  may 
seek  employment  from  them. 

Perhaps  the  most  serious  problem  facing  the  individual  in 
industry  is  that  of  uncertainty  of  employment.  The  larger  the 
organization  the  more  readily  can  the  uncertainty  be  mini- 
mized and  the  individual  protected  from  personal  prejudice 
and  partiality.  However,  conditions  occasionally  arise  beyond 
human  control,  which  involve  the  discharge  of  large  numbers 
of  men.  It  is  the  duty  of  the  industry  to  see  that  under  such 
conditions  the  change  is  made  with  the  minimum  of  injustice 
and  hardship.  We,  in  the  copper  industry,  were  faced  with 
such  a  condition  early  in  1919.  Realizing  the  importance  to 
the  individual  of  his  means  of  livelihood,  we,  in  the  Copper 
Queen  Branch,  Phelps  Dodge  Corporation,  Bisbee,  Arizona, 
determined  to  adopt  the  procedure  followed  by  the  Government 
under  the  selective  service  regulations,  and  drafted  the  men 
for  lay-off  with  the  assistance  of  their  own  elected  representa- 
tives, having  due  regard  to  dependency  and  length  of  service 
with  the  company.  We  have  but  just  now  faced  a  similar  con- 
dition, which  involved  a  50  per  cent,  reduction  of  our  steam- 
shovel  operations.  The  matter  was  handled  in  the  same  man- 
ner by  the  Employes'  Conference  Committee.  In  both  cases 
the  men  have  expressed  their  belief  that  this  vital  matter  was 
taken  care  of  in  an  eminently  fair  and  just  manner. 

There  can  be  no  doubt  of  the  response  which  the  American 
people  will  make  to  fair  and  square  dealing  between  employers 
and  employes. 


303 


WHAT  1920  DEVELOPED  IN  THE  ANTHRACITE  INDUSTRY 

By  EDWARD   W.  PARKER 
Director,  Anthracite  Bureau  of  Information,  Philadelphia,  Pa. 

* 

For  a  little  over  seventeen  years,  or  since  October  1902,  when 
the  anthracite  mine  workers  terminated  their  great  strike  of 
that  year  and  returned  to  their  working  places  in  accordance 
with  their  agreement  with  President  Roosevelt,  and  the 
appointment  by  him  of  the  Anthracite  Coal  Strike  Commission, 
industrial  peace  has  prevailed  in  the  anthracite  region.  As  a 
result,  the  miners  and  the  communities  have  prospered  to  an 
extent  probably  not  equalled,  certainly  not  excelled,  in  any 
industrial  locality  in  the  United  States,  if  indeed  in  the  world. 
It  is  too  much  to  hope  and  expect  that  there  should  not  be  some 
local  disaffections,  and  these  there  of  course  have  been,  but 
they  were  sporadic  and  not  contagious  nor  epidemic,  and  have 
been  settled  through  the  agency  established  by  the  Strike  Com- 
mission, namely,  the  Anthracite  Board  of  Conciliation,  which, 
as  you  probably  know,  consists  of  six  members — three  from 
the  operators  and  three  from  the  miners.  The  more  recent 
Anthracite  Commission  (of  which  I  shall  speak  more  in  detail 
later)  says  in  its  majority  report  that  the  creation  of  the  Board 
of  Conciliation  "is,  perhaps,  the  most  valuable  and  most  abid- 
ing work  of  that  Commission." 

Work  of  the  Anthracite  Board 

The  Anthracite  Board  of  Conciliaton  has  not  only  main- 
tained peace  in  the  anthracite  region  by  the  amicable  adjust- 
ment of  such  grievances  as  have  come  before  it  (and  these  have 
numbered  some  800  during  its  lll/2  years  of  existence),  but 
since  1912  its  members  have  constituted  three-fourths  of  the 
committee  that  has  negotiated  the  wage  agreements,  of  which 
there  have  been  no  less  than  nine,  including  the  one  of  Sep- 
tember 3,  1920,  since  the  Anthracite  Coal  Strike  Commission 
made  its  report  to  President  Roosevelt  in  March,  1903.  It  is 
true  that  when  the  latest  agreement  terminated,  on  March  31, 
1920,  the  negotiations  for  the  construction  of  a  new  agreement 
signally  failed,  and  this  failure  is  responsible  for  whatever  of 


304  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

an  unfortunate  character  the  year  1920  developed  in  the 
anthracite  industry. 

The  failure  to  negotiate  a  new  agreement,  which  resulted 
eventually  in  the  appointment  by  the  President  of  a  commis- 
sion to  settle  the  matters  in  dispute,  was  due  primarily  to  the 
interjection  into  the  controversy  of  a  new  element  known  as 
the  "consulting  economist,"  impersonated  by  one  W.  Jett 
Lauck;  and,  secondarily,  to  the  demand  of  the  miners  for  a 
"closed  shop"  in  the  anthracite  region.  As  the  latter  can  be 
disposed  of  more  briefly  than  the  former,  it  will  be  given  first 
consideration. 

Demand  No.  5  of  the  15  demands  originally  presented  by  the 
miners  for  the  consideration  of  the  negotiating  committee  was : 

"We  demand  a  closed-shop  contract,  which  means  full 
recognition  of  the  United  Mine  Workers  of  America  as  a 
party  to  the  agreement." 

Closed-Shop  Demand  a  Stumbling-Block 

It  proved  to  be  the  principal  stumbling  block  in  the  delibera- 
tions of  the  Committee.  The  two  sides  were,  except  for  this, 
not  far  apart  when,  after  nearly  two  months  of  negotiation  in 
New  York,  and  a  final  disagreement,  with  a  resulting  suspen- 
sion of  work  imminent,  the  Committee  accepted  the  invita- 
tion of  the  Secretary  of  Labor  to  come  to  Washington.  There, 
nearly  a  month  of  time  was  taken  up  in  conferences  with  the 
Secretary,  who,  with  extraordinary  patience  and  diplomacy, 
endeavered  to  effect  a  settlement.  After  numerous  separate 
and  joint  conferences  with  the  two  sides  of  the  Committee,  the 
Secretary  submitted  a  tentative  plan  of  an  agreement,  most 
of  which  was  in  a  spirit  of  compromise  accepted  by  the  repre- 
sentatives of  the  operators.  The  representatives  of  the  miners, 
however,  unwisely  advised,  had  somewhat  amended  their  orig- 
inal demands,  and  had  presented  to  the  Secretary  what  they 
designated  as  an  "ultimatum,"  included  in  which  was  a  demand 
that  Article  IX  of  the  Anthracite  Coal  Strike  Commission 
award  should  be  eliminated.  This  particular  article,  next  to 
the  one  providing  for  the  creation  of  the  Board  of  Concilia- 
tion, is  probably  the  strongest  pronouncement  of  that  Com- 
mission. It  says: 


ANTHRACITE    INDUSTRY    IN    1920  305 

"IX.  The  Commission  adjudges  and  awards:  That 
no  person  shall  be  refused  employment,  or  in  any  way 
discriminated  against  on  account  of  membership  or  non- 
membership  in  any  labor  organization;  and  that  there 
shall  be  no  discrimination  against,  or  interference  with, 
any  employe  who  is  not  a  member  of  any  labor  organiza- 
tion by  members  of  such  organization." 

Anthracite  Commission  Favors  Open-Shop 

That  Commission  then  spoke  unequivocally  for  the  open 
shop.  In  giving  utterance  thereto  it  did  not  fail  to  state  its 
reasons  in  language  no  less  forcible,  and  I  may  be  pardoned 
if  I  here  quote  a  portion  of  that  language : 

"The  right  to  remain  at  work  where  others  have  ceased 
to  work,  or  to  engage  anew  in  work  which  others  have 
abandoned,  is  part  of  the  personal  liberty  of  a  citizen  that 
can  never  be  surrendered,  and  every  infringement  thereof 
merits  and  should  receive  the  stern  denouncement  of  the 
law.  All  government  implies  restraint,  and  it  is  not  less, 
but  more,  necessary  in  self -governed  communities  than  in 
others  to  compel  restraint  of  the  passions  of  men  which 
make  for  disorder  and  lawlessness.  Our  language  is  the 
language  of  a  free  people,  and  fails  to  furnish  any  form 
of  speech  by  which  the  right  of  a  citizen  to  work  when  he 
pleases,  for  whom  he  pleases,  and  on  what  terms  he 
pleases,  can  be  successfully  denied.  The  common  sense 
of  our  people,  as  well  as  the  common  law,  forbids  this 
right  should  be  assailed  with  impunity.  It  is  vain  to  say 
that  the  man  who  remains  at  work  while  others  cease  to 
work,  or  takes  the  place  of  one  who  has  abandoned  his 
work,  helps  to  defeat  the  aspirations  of  men  who  seek  to 
obtain  better  recompense  for  their  labor,  and  better  con- 
ditions of  life.  Approval  of  the  object  of  a  strike,  or  per- 
suasion that  its  purpose  is  high  and  noble,  cannot  sanction 
an  attempt  to  destroy  the  right  of  others  to  a  different 
opinion  in  this  respect,  or  to  interfere  with  their  conduct 
in  choosing  to  work  upon  what  terms  and  at  what  time, 
and  for  whom  it  may  please  them  so  to  do. 

"The  right  thus  to  work  cannot  be  made  to  depend  upon 
the  approval  or  disapproval  of  the  personal  character  and 
conduct  of  those  who  claim  to  exercise  this  right.  If  this 
were  otherwise,  then  those  who  remain  at  work  might,  if 
they  were  in  the  majority,  have  both  the  right  and  power 
to  prevent  others,  who  choose  to  cease  to  work,  from  so 
doing. 

"This  all  seems  too  plain  for  argument.  Common  sense 
and  common  law  alike  denounce  the  conduct  of  those  who 


30(5  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

interfere  with  this  fundamental  right  of  the  citizen.    The 
assertion  of  the  right  seems  trite  and  commonplace,  but 
that  land  is  blessed  where  the  maxims  of  liberty  are; 
commonplaces." 

But  to  return  to  the  Secretary:  So  far  as  the  matter  of 
wages  was  concerned  the  operators  had  agreed  to  practically 
all  of  the  compromise  suggestions  the  Secretary  had  made,  but 
positively  declined  to  agree  to  any  change  of  principle  enun- 
icated  by  the  Anthracite  Coal  Strike  Commission,  and  the 
Secretary  had  finally  to  notify  the  President  that  he  had  gone 
the  limit  his  conscience  would  permit.  The  miners,  in  conven- 
tion at  Wilkes-Barre,  repudiated  the  Secretary's  suggestions 
and  requested  the  appointment  of  a  Commission,  as  the  Presi- 
dent had  announced  he  would  do  if  the  controversy  were  not 
settled  otherwise.  That  Commission  has  also  spoken  for  the 
open  shop.  It  ordered,  to  be  sure,  that  an  agreement  based 
upon  its  findings  should  be  made  with  the  United  Mine 
Workers  of  America,  but  it  added  that,  "this  official  recogni- 
tion of  the  United  Mine  Workers  of  America  for  the  purpose 
of  adjusting  differences  and  strengthening  collective  bargain- 
ing does  not  carry  with  it  the  theory  or  the  fact  of  the  "closed 
shop,"  or  the  "check  off."  And  it  strengthened  the  award  of 
the  Anthracite  Coal  Strike  Commission  by  providing  the 
machinery  through  which  the  non-union  man  should  be  pro- 
tected in  his  rights  of  having  his  grievances  presented  before 
the  Board  of  Conciliation,  for  it  provided  further,  "that  it 
does  not  in  any  degree  interfere  with  or  annul  the  provisions 
of  the  award  of  1902  in  which  the  rights  and  privileges  of  non- 
union men  were  stated  and  protected;  and  provided,  further, 
that  in  cases  where  non-union  employes  have  grievances,  or 
where,  for  any  reason,  the  grievance  committee  or  mine  com- 
mittee fails  to  give  such  grievance  consideration  satisfactory 
to  the  employe,  hie  right  to  appeal  from  the  decision  of  the 
foreman  or  grievance  committee  and  to  the  Board  of  Concilia- 
tion shall  be  inviolate." 

This  endorsement  of  the  principle  of  the  open  shop  is  one  of 
the  things  that  1920  developed  in  the  anthracite  industry. 

Doubtful  Value  of  a  Consulting  Economist 

And  now  to  go  back  a  little  and  consider  the  primary  cause 
of  the  failure  to  reach  an  agreement  by  the  wage  committee — 


ANTHRACITE    INDUSTRY    IN    1920  307 

the  consulting  economist.  First,  at  the  meetings  in  New  York, 
and  later  in  the  hearings  before  the  President's  Commission, 
the  miners'  case  was  presented  in  the  shape  of  elaborately  pre- 
pared statistical  exhibits  in  which  the  increased  cost  of  living 
as  compared  with  increased  earnings,  the  theory  of  "the  living 
wage,"  the  budget  plan  of  determining  wage  scales,  the 
occupational  hazards  of  anthracite  mining,  etc.,  were  set  forth 
in  extraordinary  detail  and  manifold  combinations.  The 
miners  had  engaged  a  consulting  economist,  W.  Jett  Lauck, 
aforesaid,  for  whose  services  the  treasury  of  their  organiza- 
tion was  mulcted,  according  to  a  statement  in  Coal  Age,  to  the 
extent  of  approximately  $40,000.  Lauck,  it  seems,  had  burst 
from  obscurity  into  a  certain  degree  of  prominence  by  having 
himself  appointed  as  secretary  of  the  War  Labor  Board,  from 
which  he  graduated  into  his  present  line  of  activity.  And  he 
has  been  decidedly  active.  He  has  organized  a  highly  efficient 
publicity  department  which  secures  for  him  a  large  amount  of 
free  advertising  in  the  daily  papers,  and  he  is  a  liberal  con- 
tributor to  the  magazines  and  the  publications  of  economic 
societies.  He  poses  as  the  advocate  of  labor,  and  has  figured 
in  a  number  of  labor  controversies,  notably  among  recent  ones 
the  street  railway  strike  in  Boston,  before  the  Railroad  Labor 
Board  in  Chicago,  and  in  the  hearings  before  the  two  coal 
commissions. 

Mine  Workers  Wrongly  Informed 

Whatever  may  have  been  his  success  in  the  other  controver- 
sies, his  efforts  on  behalf  of  the  anthracite  mine  workers  were 
less  than  useless.  It  was  developed  at  the  hearings  before  the 
Commission,  indeed  by  Lauck's  own  confession,  that  the  ex- 
hibits he  presented  were  neither  statistically  nor  mathemati- 
cally correct — in  fact,  every  statement  was  discredited,  and 
the  money  spent  upon  the  preparation  of  all  this  "testimony" 
and  the  services  of  the  consulting  economist  before  the  Com- 
mission was  little  more  than  money  thrown  away.  Undoubt- 
edly the  representatives  of  the  miners  were  deceived  by  the 
plausibly  concocted  exhibits.  They  were  deluded  into  the 
belief  that  they  were  entitled  to  more  concessions  than  the 
operators  felt  were  justified,  and  into  the  hope  that  by  refus- 
ing the  offers  made  by  the  operators  and  the  compromises 
suggested  by  the  Secretary  of  Labor,  they  would  obtain  further 


310  PROCEEDINGS  OF   AMERICAN   MINING   CONGRESS 

such  as  replacement,  without  expense  to  the  miner,  of  tools 
lost  through  no  fault  of  his  own,  and  were  granted  without 
much  demur.  Others  were  of  local  importance  only,  and  pro- 
vision was  made  for  their  adjudication  through  the  Board  of 
Conciliation.  What  happened  to  the  demand  for  the  closed 
shop  has  already  been  noted.  The  only  other  two  of  major 
importance  were  the  ones  for  increased  wages  and  the  8-hour 
day. 

Interpretation  of  Demand 

it  developed  at  the  hearings  before  the  Commission  that  the 
demand  for  an  increase  to  correspond  to  the  increases  granted 
the  bituminous  mine  workers  by  the  Presidential  Coal  Com- 
mission was  susceptible  of  several  interpretations,  the  rate  of 
increase  being  stated  to  mean  anywhere  from  27  to  31  per 
cent.,  with  a  $6  minimum  for  common  labor,  both  with  and 
without  existing  differentials,  and  that  the  different  conditions 
prevailing  in  the  anthracite  and  bituminous  fields  were  played 
one  against  the  other  to  secure  advantages  in  the  matter  of 
wages.  For  instance,  in  the  hearings  before  the  Bituminous 
Coal  Commission,  particular  stress  was  laid  upon  the  larger 
earnings  of  the  anthracite  mine  workers,  because  notwith- 
standing the  higher  unit  rates  in  the  bituminous  fields,  the 
miners  could  not  earn  wages  on  account  of  the  fewer  number 
of  days  they  were  able  to  secure  employment.  This  condition 
was  strongly  brought  out  in  the  minority  report  of  John  P. 
White,  former  president  of  the  miners'  union,  and  it  was 
largely  because  of  these  conditions  that  the  increase  in  rates 
to  the  bituminous  workers  was  given.  It  was  clearly  shown 
by  the  operators  that  the  anthracite  mine  workers  were  then 
earning  more  wages  than  were  the  bituminous  workers  after 
the  advances  granted  by  the  President's  Commission  had  gone 
into  effect.  In  presenting  their  case  before  the  Anthracite 
Coal  Commission,  the  exhibits  prepared  by  the  consulting 
economist  made  comparison  with  the  rates  in  the  bituminous 
fields,  the  earnings  being  either  ignored  or  stated  in  the  form 
of  estimates  which  so  grossly  misrepresented  the  facts  that 
there  was  little  doubt  of  premeditated  and  determined  intent 
to  deceive  the  Commission. 

It  is  not  my  desire  or  intention  to  charge  the  representa- 
tives of  the  miners  on  the  negotiations  committee  with  being 


ANTHRACITE    INDUSTRY    IN    1920  311 

party  to  this  attempt  at  deception.  They  were,  as  I  have 
already  stated,  themselves  deceived  by  speciously  manipulated 
statistics  into  the  belief  that  the  anthracite  mine  workers'  were 
not  as  well  paid  as  their  bituminous  brothers,  though  had  they 
taken  cognizance  of  the  prosperous  condition  of  the  anthracite 
region  as  compared  with  those  in  the  bituminous  fields,  they 
might  have  thought  differently. 

Award  Similar  to  Compromise  Suggestion 

The  award  of  the  Commission  on  the  wage  demand  was  in 
close  agreement  to  the  compromise  suggestion  of  the  Secretary 
of  Labor,  with,  however,  a  special  consideration  to  the  lower- 
paid  class  of  labor,  which  was  given  a  minimum  of  $4.20  per 
day,  or  per  shift,  as  against  a  minimum  rate  of  $4  suggested 
by  the  Secretary.  In  their  original  offer  of  an  advance  of  60 
per  cent,  to  the  contract  miner  over  the  1916  base  rate,  and  of 
15  per  cent,  to  the  day  men  over  the  then  going  rates,  the 
operators  felt  that  they  had,  in  justice  to  the  public,  which 
must  in  all  such  cases  pay  the  bill,  gone  as  far  as  they  could. 

The  Secretary  of  Labor,  in  a  letter  to  the  President,  outlin- 
ing the  situation  after  his  attempt  at  mediation  had  failed, 
stated  that  the  basis  of  compromise  he  had  proposed  was  as 
far  as  he  could  go  and  justify  his  position. 

The  consulting  economist  evidently  had  fore-knowledge  of 
the  Commission's  conclusions  (by  which  is  meant,  of  course, 
the  majority  report) ,  for  hardly  had  the  report  with  the  Presi- 
dent's acceptance  of  it  been  released  at  the  White  House  before 
a  mimeographed  discussion  of  it  by  W.  Jett  Lauck  was  in  the 
hands  of  the  newspaper  representatives  in  Washington  and  in 
the  mails.  In  this  review,  the  consulting  economist  informed 
the  public  that  the  increase  in  wages  granted  was  not  sufficient 
to  warrant  any  advance  in  the  price  of  coal.  He  ignored  the 
fact  that  the  Federal  Trade  Commission  had  shown  that  the 
labor  cost  of  producing  anthracite  was  $3.41  a  ton,  and  that  if 
this  were  applied  only  on  the  domestic  sizes  the  labor  cost  was 
$4.89  a  ton.  It  is  estimated  that  with  the  larger  advance  to 
the  low-paid  labor  the  total  added  labor  cost  by  the  Commis- 
sion's award  is  18  per  cent.,  or  about  88  cents  a  ton  on  the 
prepared  or  domestic  sizes.  The  Trade  Commission's  report 
showed  that  the  average  margin  on  fresh-mined  coal  was  36 
cents  a  ton,  equal  to  about  41/*  per  cent,  on  the  capital  invested, 


310  PROCEEDINGS  OF   AMERICAN   MINING   CONGRESS 

such  as  replacement,  without  expense  to  the  miner,  of  tools 
lost  through  no  fault  of  his  own,  and  were  granted  without 
much  demur.  Others  were  of  local  importance  only,  and  pro- 
vision was  made  for  their  adjudication  through  the  Board  of 
Conciliation.  What  happened  to  the  demand  for  the  closed 
shop  has  already  been  noted.  The  only  other  two  of  major 
importance  were  the  ones  for  increased  wages  and  the  8-hour 
day. 

Interpretation  of  Demand 

it  developed  at  the  hearings  before  the  Commission  that  the 
demand  for  an  increase  to  correspond  to  the  increases  granted 
the  bituminous  mine  workers  by  the  Presidential  Coal  Com- 
mission was  susceptible  of  several  interpretations,  the  rate  of 
increase  being  stated  to  mean  anywhere  from  27  to  31  per 
cent.,  with  a  $6  minimum  for  common  labor,  both  with  and 
without  existing  differentials,  and  that  the  different  conditions 
prevailing  in  the  anthracite  and  bituminous  fields  were  played 
one  against  the  other  to  secure  advantages  in  the  matter  of 
wages.  For  instance,  in  the  hearings  before  the  Bituminous 
Coal  Commission,  particular  stress  was  laid  upon  the  larger 
earnings  of  the  anthracite  mine  workers,  because  notwith- 
standing the  higher  unit  rates  in  the  bituminous  fields,  the 
miners  could  not  earn  wages  on  account  of  the  fewer  number 
of  days  they  were  able  to  secure  employment.  This  condition 
was  strongly  brought  out  in  the  minority  report  of  John  P. 
White,  former  president  of  the  miners'  union,  and  it  was 
largely  because  of  these  conditions  that  the  increase  in  rates 
to  the  bituminous  workers  was  given.  It  was  clearly  shown 
by  the  operators  that  the  anthracite  mine  workers  were  then 
earning  more  wages  than  were  the  bituminous  workers  after 
the  advances  granted  by  the  President's  Commission  had  gone 
into  effect.  In  presenting  their  case  before  the  Anthracite 
Coal  Commission,  the  exhibits  prepared  by  the  consulting 
economist  made  comparison  with  the  rates  in  the  bituminous 
fields,  the  earnings  being  either  ignored  or  stated  in  the  form 
of  estimates  which  so  grossly  misrepresented  the  facts  that 
there  was  little  doubt  of  premeditated  and  determined  intent 
to  deceive  the  Commission. 

It  is  not  my  desire  or  intention  to  charge  the  representa- 
tives of  the  miners  on  the  negotiations  committee  with  being 


ANTHRACITE    INDUSTRY    IN    1920  311 

party  to  this  attempt  at  deception.  They  were,  as  I  have 
already  stated,  themselves  deceived  by  speciously  manipulated 
statistics  into  the  belief  that  the  anthracite  mine  workers"  were 
not  as  well  paid  as  their  bituminous  brothers,  though  had  they 
taken  cognizance  of  the  prosperous  condition  of  the  anthracite 
region  as  compared  with  those  in  the  bituminous  fields,  they 
might  have  thought  differently. 

Award  Similar  to  Compromise  Suggestion 

The  award  of  the  Commission  on  the  wage  demand  was  in 
close  agreement  to  the  compromise  suggestion  of  the  Secretary 
of  Labor,  with,  however,  a  special  consideration  to  the  lower- 
paid  class  of  labor,  which  was  given  a  minimum  of  $4.20  per 
day,  or  per  shift,  as  against  a  minimum  rate  of  $4  suggested 
by  the  Secretary.  In  their  original  offer  of  an  advance  of  60 
per  cent,  to  the  contract  miner  over  the  1916  base  rate,  and  of 
15  per  cent,  to  the  day  men  over  the  then  going  rates,  the 
operators  felt  that  they  had,  in  justice  to  the  public,  which 
must  in  all  such  cases  pay  the  bill,  gone  as  far  as  they  could. 

The  Secretary  of  Labor,  in  a  letter  to  the  President,  outlin- 
ing the  situation  after  his  attempt  at  mediation  had  failed, 
stated  that  the  basis  of  compromise  he  had  proposed  was  as 
far  as  he  could  go  and  justify  his  position. 

The  consulting  economist  evidently  had  fore-knowledge  of 
the  Commission's  conclusions  (by  which  is  meant,  of  course, 
the  majority  report) ,  for  hardly  had  the  report  with  the  Presi- 
dent's acceptance  of  it  been  released  at  the  White  House  before 
a  mimeographed  discussion  of  it  by  W.  Jett  Lauck  was  in  the 
hands  of  the  newspaper  representatives  in  Washington  and  in 
the  mails.  In  this  review,  the  consulting  economist  informed 
the  public  that  the  increase  in  wages  granted  was  not  sufficient 
to  warrant  any  advance  in  the  price  of  coal.  He  ignored  the 
fact  that  the  Federal  Trade  Commission  had  shown  that  the 
labor  cost  of  producing  anthracite  was  $3.41  a  ton,  and  that  if 
this  were  applied  only  on  the  domestic  sizes  the  labor  cost  was 
$4.89  a  ton.  It  is  estimated  that  with  the  larger  advance  to 
the  low-paid  labor  the  total  added  labor  cost  by  the  Commis- 
sion's award  is  18  per  cent.,  or  about  88  cents  a  ton  on  the 
prepared  or  domestic  sizes.  The  Trade  Commission's  report 
showed  that  the  average  margin  on  fresh-mined  coal  was  36 
cents  a  ton,  equal  to  about  4 1/2  per  cent,  on  the  capital  invested, 


312  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

namely,  $7.50  to  $8  per  ton  of  output.2  And  this  did  not  rep- 
resent profit,  for  out  of  it  had  to  be  paid  Federal  taxes,  sales 
expenses  and  interest  on  borrowed  capital,  and  from  it  reserves 
for  non-insurable  risks  had  to  be  set  up. 

Evidently  Mr.  Lauck  is  of  the  opinion  that  the  anthracite 
operators  should  do  business  at  a  loss  from  60  to  75  cents  a 
ton  for  the  pleasure  of  supplying  him  with  his  winter's  supply 
of  fuel. 

Review  of  the  Consulting  Economist's  Work 

It  may  not  be  that  the  "vacation"  strike  of  the  anthracite 
mine  workers  following  the  President's  acceptance  of  the 
majority  report  was  actually  instigated  by  the  consulting 
economist,  but  he  was  at  least  cognizant  of  the  plans  of  those 
who  fomented  and  directed  it;  for  in  the  same  statement  he 
announced  that  "as  a  result  of  this  award  there  probably  will 
be  trouble  in  the  anthracite  field,"  though  he  attempted  to  es- 
cape any  responsibility  for  such  an  eventuality  by  saying  that 
the  weather  forecaster  who  predicted  rain  did  not  produce  the 
rain.  Not  content  with  mulcting  the  miners'  treasury  to  the 
extent  of  $40,000,  he  was,  in  the  light  of  succeeding  events, 
apparently  responsible,  if  only  in  part,  for  the  sacrifice  of 
several  million  dollars  in  wages,  a  goodly  part  of  the  back  pay 
accumulated  since  April  1,  and  for  the  non-production  of  some 
2,000,000  tons  of  badly  needed  coal. 

The  demand  for  an  8-hour  day,  with  punitive  overtime,  was 
denied  by  the  Commission.  It  was  shown  that  if  the  breakers 
were  to  operate  on  an  8-hour  basis,  it  was  necessary  for  some 
men  to  put  in  regularly  from  9  to  10  hours,  and,  conversely,  if 
all  employes  were  limited  to  8  hours,  the  breaker  time  would 
be  shortened  and  production  reduced  accordingly. 

Miners  Abide  By  Agreement 

It  is  gratifying  to  be  able  to  state  that  the  anthracite  mine 
workers  faithfully  carried  out  their  agreement  to  remain  at 
work  during  the  six  months  that  the  negotiations  were  passing 
through  their  several  phases,  although,  as  stated  above,  dis- 
satisfaction with  the  terms  of  the  Commission's  award  was 

2Anthracite  Mining  Costs,  by  R.  V.  Norris,  Engineers'  Committee, 
U.  S.  Fuel  Administration.  Transactions  A.  I.  M.  &  M.  E.  New  York 
meeting,  February,  1919. 


ANTHRACITE    INDUSTRY    IN    1920  313 

manifested  by  authorized  strikes,  under  the  guise  of  "vaca- 
tions," which  seriously  affected  production,  particularly  in  the 
Schuylkill  and  Lehigh  regions,  during  the  month  of  September, 
and  resulted  in  a  substantial  decrease  in  tonnage.  Unfortu- 
nately, this  was  not  the  only  factor  that  acted  against  in- 
creased production  of  anthracite  during  the  present  year. 
Several  untoward  incidents  occurred,  among  which  may  be 
mentioned  (1)  the  outlaw  switchmen's  strike  in  the  spring 
and  early  summer,  which  interfered  with  car  supply  and  the 
movement  of  customary  tonnage  at  that  season  to  the  head  of 
the  Lakes;  (2)  embargoes  by  the  New  England  railroads,  par- 
ticularly the  New  York,  New  Haven  &  Hartford,  that  limited 
all-rail  distribution  into  that  territory  during  a  goodly  portion 
of  the  summer;  (3)  strikes  of  towboat  men  in  New  York 
harbor,  which  lasted  over  two  months  and  reduced  the  water 
movement  to  ports  on  Long  Island  Sound;  (4)  a  strike  of 
about  two  months'  duraton  by  about  10,000  employes  of  the 
Pennsylvania  Coal  Co.,  and  (5)  an  appreciable  shortage  of 
productive  labor  (miners  and  miners'  laborers)  throughout 
the  entire  region.  As  a  result  of  these  combined  circum- 
stances, the  shipments  for  the  first  six  months  of  the  present 
coal  year  show  a  total  of  44,325,000  tons,  as  compared  with 
35,099,432  tons  last  year.  This  does  not  tell  the  whole  story, 
however,  for  the  production  this  year,  on  account  of  the 
increased  demand  for  anthracite,  made  more  insistent  by  the 
shortage  in  bituminous  coal,  includes  a  considerably  larger 
proportion  of  washery  coal ;  how  much  it  is  not  possible  to  say 
at  the  present  time,  probably  as  much  as  2,000,000  tons. 

Resume  of  the  Anthracite  Industry  in  1920 

What  1920,  therefore,  may  be  said  to  have  developed  in  the 
!  .anthracite  industry  may  be  summarized  as  follows: 

1.  In   wage   controversies,    satisfactory   conclusions   may 
best  be  arrived  at  through  direct  negotiations  between  the 

/  parties  at  interest  as  determined  the  agreements  in  the  anthra- 
i  cite  industry  from  1902  to  the  present  year,  without  the  inter- 
I  ference  of  consulting  economists  or  other  outside  influences. 

2.  Co-operation    of    railroad    and    other    transportation 
;  agencies  is  necessary  to  ensure  the  orderly  distribution  of  the 
i{  product. 


314  PROCEEDINGS  OF  AMERICAN   MINING  CONGRESS 

3.  The  production  of  anthracite,  under  most  favorable  con- 
ditions, is  not  more  than  sufficient  to  meet  the  domestic  fuel 
requirements  of  the  territory  it  serves.    Consequently,  steady 
employment  is  offered  to  its  employes,  and  any  interruptions 
to  continuous  operation  will  result  in  possible  inconvenience 
to  the  public,  or  the  substitution  of  other  fuels  if  they  are 
available. 

4.  The  policy  of  the  open  shop  is  a  safeguard  to  the  indi- 
vidual freedom  of  the  American  workman. 


315 


SURVEY    OF    CONDITIONS    OF    OPERATORS    AND    PRO- 

DUCTION  IN  SO-CALLED  OPEN-SHOP  DISTRICTS 

OF  WEST  VIRGINIA 

By  GEORGE  WOLFE 
Secretary  of  The  Winding  Gulf  Operators'  Association,  Beckley,  W.  Va. 

The  president  of  our  Association,  Mr.  E.  E.  White,  was  the 
one  who  was  called  upon  to  come  here  and  talk  to  you  on  the 
labor  conditions  and  matters  in  general,  as  we  see  it,  in  the 
non-union  districts  in  our  State,  and  I  am  very  sorry  indeed 
that  matters  were  in  such  shape  that  Mr.  White  could  not 
come. 

I  want  to  say  at  the  start  that  I  have  been  connected  with 
the  mining  industry  in  our  State  for  the  past  25  years,  and  I 
am  today  looking  after  and  managing  six  different  coal  prop- 
erties, besides  attending  to  the  secretarial  duties  of  our 
Association.  I  have  grown  up  in  the  smokeless  fields  of  West 
Virginia,  and  have  seen  the  time  when  the  union  in  our  State 
held  but  little  sway,  and  I  have  noted  from  year  to  year  the 
gradual  growth  of  the  United  Mine  Workers  and  the  hold  that 
it  has  taken  upon  the  industry.  I  think  I  have  made  a 
thorough  analysis  of  the  situation  and  have  gained  a  pretty 
fair  knowledge  of  the  reasons  why  one  non-union  district  after 
another  has  fallen  under  the  power  of  these  people.  I  think  it 
would  only  be  fair,  in  going  over  this  subject,  to  discuss  these 
reasons  and  draw  conclusions  as  to  the  whys  and  wherefores, 
and  to  show  you  gentlemen  why  we  people  operating  in  the 
so-called  open  shops,  or  non-union  fields  of  our  State,  are  able 
to  do  so;  why  we  ourselves  are  able  to  operate  our  property 
better,  and  why  the  men  themselves  who  work  in  the  mines  are 
the  beneficiaries  and  enjoy  greater  freedom  and  higher  earn- 
ing capacity  in  the  open  shop  or  non-union  districts  than  their 
brethren  in  the  highly  organized  sections  of  our  State. 

Managing  Both  Union  and  Open-Shop  Mines 

Let  me  also  say  that  I  am  today  in  charge  of  properties 
which  are  union,  which  operate  with  the  closed  shop  and 


316  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

check-off,  and  am  also  in  charge  of  properties  which  are 
entirely  free  of  any  alliances  with  the  United  Mine  Workers. 
I  came  into  the  Winding  Gulf  section  some  seven  years  ago, 
and  at  that  time  we  were  partly  under  the  sway  of  the  union, 
having  some  locals  and  a  working  agreement  with  our  men 
which  bore  the  unofficial  signatures  of  certain  members  of  the 
union.  I  have  seen  all  of  this  pass  away,  serving  as  one  of  the 
executive  committee  of  our  Association,  and  finally  becoming 
the  managing  director  of  that  committee,  and  I  presume  from 
the  success  which  was  accomplished  by  our  shaking  off  entirely 
the  shackles  of  the  union  hold  is  why  I  am  in  the  position  today 
that  I  hold  with  our  people,  and  living  up  at  Beckley,  so  to 
speak,  sitting  on  the  lid. 

Agitators  Constitute  15  Per  Cent,  of  Labor 

I  have  always  thought  that  the  first  fundamental  principle 
that  one  must  embody  in  his  system  before  he  can  hope  to 
carry  on  this  non-union  or  open-shop  idea  successfully  is  to 
first  have  faith  in  yourself,  and  believe  absolutely  that  it  can 
be  done.  The  next  principle  to  become  thoroughly  embodied 
in  your  framework  is  that  85  per  cent,  of  your  labor  are  honest 
people,  who  look  to  you  as  a  leader,  and  who  have  faith  in  your 
integrity.  The  other  15  per  cent,  of  your  labor  are  the  rest- 
less tormentors  who  neither  want  to  do  well  themselves  nor 
let  others  do  anything.  It  is  this  noisy  minority  in  the  busi- 
ness that  often  overshadows  and  brings  the  management  to  a 
state  of  mind  where  he  believes  that  the  union  is  going  to  take 
possession  and  that  he  might  as  well  come  to  terms  and  make 
a  contract  with  them.  The  operators  themselves  are  largely 
to  blame  for  not  being  able  to  operate  districts  more  largely 
on  the  open-shop  principle.  If  our  people  would  stand  together 
as  a  unit  and  select  a  small  working  committee  to  handle  these 
questions,  and  absolutely  abide  by  the  decisions  of  this  com- 
mittee, I  think  many  times  you  would  more  successfully  com- 
bat with  the  demands  made  upon  you  by  the  15  per  cent,  of 
your  men  whom  I  have  termed  the  "noisy  minority."  We  see 
operators  pulling  this  way  and  operators  pulling  that  way, 
and  they  seem  to  lack  the  idea  of  standing  together,  one  for 
all  and  all  for  one.  I  have  seen  districts  in  our  State  turned 
over  to  the  powers  of  the  union  because  of  financial  difficulties. 
Properties  with  large  bonded  indebtedness,  and  controlled  by 


LABOR   CONDITIONS    IN    WEST    VIRGINIA  317 

the  bankers  in  distant  cities,  are  sometimes  compelled  to  make 
terms,  rather  than  shut  down  the  mines,  and  continue  at  work. 
These  conditions  in  some  fields  cannot  be  overlooked,  and  for 
this  reason  alone  the  union  has  been  able  to  gain  the  upper 

hand. 

/ 

Smokeless  Coal 

In  the  southwestern  part  of  our  State  we  have  a  limited 
acreage  with  a  tonnage  of  what  is  called  smokeless  coal.    This 
ranks  as  the  highest  steaming  coal  in  America,  and  I  might 
say  is  equalled  by  none  in  the  world.    For  a  number  of  years 
the  operators  in  these  smokeless  fields  have  lived  on  their 
properties  and  have  been  more  or  less  closely  allied  with  their 
men,  and  this  has  been  one  of  the  underlying  reasons  why  the 
United  Mine  Workers  of  America  has  not  been  able  to  gain 
very  much  of  a  foothold.    Several  years  ago  a  large  interest 
in  Pennsylvania  secured  holdings  in  what  is  called  the  New 
River  District  of  this  smokeless  coal  field,  and  for  reasons  best 
known  to  themselves  they  effected  a  trade  with  the  United 
Mine  Workers,  which  threw  about  this  New  River  District  the 
shackles  of  the  union,  and  these  people  today  are  operating 
under  a  contract  embodying  the  closed  shop  and  the  check-off. 
But  not  all.    There  was  one  man  in  this  New  River  District 
who  refused  to  sign  the  contract  and  said  to  himself:   "I  will 
operate  open  shop  and  will  not  have  any  check-off."    He  called 
his  men  together  and  said:    "We  will  work  Americans,  Gen- 
tiles and  Jews,  union  or  non-union  people,  so  long  as  you  are 
good  Americans  and  observe  the  laws  of  our  country;  but 
I  will  have  no  contract  with  the  United  Mine  Workers  of 
America.    I  will  not  operate  with  a  closed  shop,  and  I  will  not 
collect  any  check-off  dues.     These  houses  are  here,  and  you 
!  boys  can  go  ahead  and  live  in  them,  seeking  work  elsewhere 
i  if  my  ideas  are  not  satisfactory  to  you."    For  60  days  no  work 
\  was  done  on  this  property,  and  the  management  made  abso- 
}  lutely  no  attempt  to  do  any  work.    Gradually  it  dawned  upon 
i  the  men  that  the  owner  meant  what  he  said.      They  called 
{ meetings    together   among   themselves,    and   voted   and   had 
many  stormy  sessions.    However,  the  majority  prevailed.    The 
•{  men  accepted  the  situation  and  went  back  to  work.    There  has 
never  been  a  shot  fired  on  the  property,  and  outside  of  night 
watchmen,  put  on  to  protect  the  tipples  and  storehouses,  no 


318  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

force  of  any  kind  has  been  used,  and  today  in  the  New  River 
District,  Mr.  William  McKell  is  running  his  mines  absolutely 
on  this  basis  and  mining  a  large  tonnage  of  coal.  He  is 
entirely  surrounded  by  the  union  mines,  and  his  own  people 
see  to  it  that  agitators  do  not  come  in  the  camps  and  that  they 
are  not  molested.  His  people  have  gradually  come  to  believe 
that  the  check-off  and  closed  shop  is  a  bad  condition,  and  that 
they  themselves  are  better  off  on  the  open-shop  plan  than  their 
neighboring  brethren  are  who  work  with  the  closed  shop.  Not 
long  ago  Governor  Cox  of  Ohio  spoke  at  a  small  town  close  to 
Mr.  McKelPs  works,  and  some  of  the  people  went  to  hear  him 
talk.  Mr.  McKell  happened  to  ask  some  of  his  people  on  their 
return  what  they  thought  of  the  Governor's  talk.  Their  reply 
was  that  "he  was  just  like  them  other  agitators  that  hang 
around  Beckley  and  Mount  Hope."  I  might  say  that  the  Gov- 
ernor, in  his  talk  to  the  people,  did  not  give  the  coal  operator 
a  good  word;  and  it  is  quite  evident  from  the  reply  made  to 
Mr.  McKell  that  his  employes  did  not  relish  this  line  of 
thought.  I  have  dwelt  on  this  particular  incident  so,  if  pos- 
sible, to  drive  home  the  fact  that  if  you  yourselves  make  up 
your  mind  you  are  right,  and  that  you  can  run  your  property 
on  an  open-shop  basis,  and  notwithstanding  the  fact  that  you 
are  completely  surrounded  by  the  United  Mine  Workers,  that 
it  can  be  accomplished. 

The  Winding  Gulf  District 

Taking  up  the  Winding  Gulf  District,  of  which  Association 
I  am  secretary,  we  believe  that  we  have  one  of  the  best 
associations  in  the  United  States,  and  that  our  men  are  one 
of  the  most  contented  set  of  employes,  and  that  they  them- 
selves are  well  satisfied  with  the  conditions  which  surround 
them.  You  must  understand,  gentlemen,  that  the  Winding 
Gulf  District  borders  on  the  New  River  District,  and  side  by 
side  we  are  operating  today.  The  outposts  of  our  district 
interlock  and  join  with  the  outposts  of  the  New  River  District, 
and  in  many  instances,  within  a  stone's  throw  I  might  say,  on 
one  side  of  the  railroad  is  a  highly  organized  union  mine,  and 
on  the  other  side  absolutely  non-union.  I  know  that  one  of 
our  largest  mines  (a  shaft  mine,  if  you  please)  owned  by  Mr. 
E.  E.  White,  our  president,  is  within  a  short  distance  of  a 
shaft  mine  controlled  by  the  Guggenheims  of  New  York,  which 


LABOR    CONDITIONS    IN    WEST    VIRGINIA  319 

is  highly  organized.  Mr.  White's  mine  is  absolutely  non- 
union, and  his  men  today  would  risk  no  interference  by  the 
union  in  the  management  of  his  property.  We  stand  in  the 
Winding  Gulf  District  in  the  first  line  of  trenches,  and  have 
stood  in  that  position  for  the  past  five  years,  protecting  any 
further  encroachment  into  the  so-called  Pocahontas  coal  fields 
of  our  State.  I  believe  that  our  employes  stand  a  hundred 
per  cent,  behind  us,  and  are  thoroughly  contented  with  the 
policy  pursued  by  our  operators.  We  have  laid  down  certain 
principles  of  procedure.  The  first  is  that  we  deal  directly 
with  our  employes  as  individuals.  It  makes  no  difference 
how  small  the  matter,  it  is  adjusted  satisfactorily  to  both 
sides.  We  make  a  strong  drive  for  better  living  conditions; 
we  are  constantly  improving  the  miners'  homes;  amuse- 
ment halls,  recreation-rooms  and  children's  playgrounds  are 
constantly  being  added,  and  we  have  supplemented  the  educa- 
tional features  by  adding  to  the  months  of  school  laid  down  by 
the  county  authorities,  and  also  increasing  the  payment  to  the 
teachers  out  of  our  own  pockets,  thereby  creating  a  better 
working  force  for  our  children.  Our  churches  and  religious 
endeavors  are  not  neglected  by  any  means,  and  one  of  the 
greatest  features  that  we  have  in  the  summer  time  is  to  gather 
our  people  together  in  picnics — these  being  in  charge  of  the 
church  folks — and  our  constant  aim  is  to  drill  into  our  people 
a  better  feeling  of  good-fellowship  and  a  general  community  of 
interest  in  these  matters.  Publicity  is  not  overlooked,  and 
we  are  constantly  trying  to  lead  the  minds  of  our  employes 
in  a  broader  and  better  direction,  and  give  to  them  a  fair 
statement  of  both  sides  of  these  questions.  We  have  found 
that  our  efforts  have  been  successful,  and  by  a  gradual  system 
of  elimination  the  United  Mine  Workers  has  dropped  out  of 
our  field.  We  are  strong  for  good  roads,  voting  for  all  bond 
issues,  and  are  endeavoring  to  open  up  the  byways  and  high- 
ways so  that  our  people  can  have  better  communication.  Many 
of  our  employes  own  their  own  automobiles  and  take  advantage 
of  all  the  good  roads,  and  it  is  quite  evident  that  the  outdoor 
recreation  secured  along  this  line  is  of  the  most  beneficial 
character. 


320  PROCEEDINGS  OF  AMERICAN  MINING   CONGRESS 

The  writer  well  remembers  last  year,  when  the  general 
strike  all  over  the  United  States  was  called,  that  many  folks 
said  to  us  that  we  would  find  that  our  district  would  not  stand 
up,  and  that  the  union  would  prevail.  It  is  well  to  remember 
the  15  per  cent,  minority  in  all  of  these  matters,  and  we  were 
not  asleep.  At  7  o'clock  in  the  morning  of  November  1,  1919, 
there  was  unloaded  in  the  city  of  Beckley,  which  is  on  the 
dividing  line  between  the  union  and  the  non-union  districts, 
some  750  boys  from  the  American  Expeditionary  Force. 

Result  of  Firmness 

These  soldiers  had  been  moved  in  quietly  during  the  night, 
and  when  they  marched  up  the  streets  of  Beckley  and  went 
into  camp  there  was  more  or  less  surprise.  I  want  to  t say  that 
within  three  hours  after  these  boys  had  gone  into  camp, 
every  miner  working  inside  of  the  mines  that  day  in  the  Wind- 
ing Gulf  District  knew  that  these  soldiers  had  come,  and  had 
arrived  to  protect  those  who  wished  to  work.  If  any  of  our 
men  had  any  idea  of  joining  the  general  strike  movement  that 
idea  vanished,  and  from  that  day  on  the  tonnage  in  the  Wind- 
ing Gulf  District  increased  by  leaps  and  bounds,  and  the  day 
the  strike  was  officially  called  off  we  were  loading  a  tonnage 
that  we  have  never  been  able  to  load  since.  Of  course,  we 
had  a  supply  of  cars  every  day,  and  our  men  seemed  to  take  an 
interest  in  the  fact  that  it  was  their  duty  to  produce  coal  and 
keep  the  general  public  in  our  country  from  freezing.  This 
we  might  call  the  acid  test  to  which  the  Winding  Gulf  field 
was  subjected,  and  we  came  out  absolutely  with  flying  colors. 
This  field  stood  as  a  protecting  line  to  the  Pocahontas  fields 
on  the  Norfolk  &  Western  and  to  the  Guyan  Valley  fields  on 
the  Chesapeake  &  Ohio,  and  from  these  fields,  gentlemen,  there 
was  produced  the  bulk  of  the  tonnage  which  saved  the  situa- 
tion, saved  your  property  and  saved  the  people  of  the  United 
States  from  a  fate  which  we  would  hardly  like  to  dwell  upon. 
We  have  our  troubles,  and  today  there  is  just  being  concluded 
on  the  Norfolk  &  Western  a  desperate  fight  which  the  United 
Mine  Workers  of  America  has  waged  for  the  past  six  months. 

The  Union  Tries  Other  Fields 

Passing  over  our  district  as  not  being  possible,  the  union 
went  into  Mingo  county  in  the  spring  of  this  year,  and  has 


LABOR  CONDITIONS   IN  WEST  VIRGINIA  321 

tried  by  every  means  possible  to  unionize  that  section  of  the 
country.  The  situation  got  so  bad  that  martial  law  was 
finally  declared,  and  the  soldiers  have  been  on  the  job  for  the 
past  60  days.  Notwithstanding  the  combined  efforts  of  the 
union  in  this  non-union  district  of  Mingo  county,  it  has 
been  unsuccessful.  They  did  succeed  in  curtailing  the  ton- 
nage to  about  40  per  cent,  for  30  days,  but  this  is  as  far  as 
they  were  able  to  go,  and  today  the  conditions  in  that  field 
are  rapidly  returning  to  normal,  and  I  do  not  hesitate  to  say 
that  before  the  year  is  out  the  union  will  have  withdrawn  its 
assault  on  the  Mingo  county  coal  fields,  and  that  the  operators 
will  have  won  their  fight,  and  the  principles  of  the  open  shop 
and  non-union  field  will  be  continued.  At  which  point  the 
union  will  next  drive  we  do  not  know,  but  we  people  feel  in  the 
smokeless  fields,  which  are  operating  non-union,  which  take  in 
Winding  Gulf,  Pocahontas  and  Tug  River,  the  high  volatile 
fields  of  Logan  county,  on  the  Chesapeake  &  Ohio,  and  the  high 
volatile  fields  in  Wayne  and  Mingo  counties,  on  the  Norfolk 
&  Western,  that  the  United  Mine  Workers  of  America  cannot 
gain  a  foothold. 

From  personal  experience  I  find  in  the  union  districts  of  our 
State  that  the  miner  earns  less  money;  that  his  living  condi- 
tions are  not  as  good ;  that  he  is  constantly  called  upon  to  con- 
tribute in  the  way  of  check-off ;  that  his  individual  liberty  is 
curtailed ;  that  the  ablest  man  is  bound  to  do  only  the  amount 
of  work  that  the  poorest  man  does;  that  the  limited  produc- 
tion per  man  is  curtailed  down  to  the  point  of  the  weakest 
member;  that  the  personality  of  the  management  is  lost,  as 
dealing  with  the  men,  and  that  their  affairs  are  handled 
through  a  mine  committee,  the  men  become  mere  units,  and 
a  feeling  of  distrust  exists  between  the  management  of  the 
coal  operating  company  and  the  employes  who  work  within 
the  mines.  On  the  contrary,  in  the  open  shop  and  non-union 
districts  we  find  the  men  today  earning  more  money;  their 
tonnage  yield  per  man  is  greater;  their  individual  liberty 
is  as  it  should  be;  they  can  go  and  come  as  they  please;  if 
they  are  not  satisfied  with  the  management  they  can,  if  not 
able  to  work  out  their  troubles,  move  on  to  another  place ;  that 
if  a  man  is  willing  and  able  his  tonnage  is  not  curtailed,  and 
he  can  load  as  much  coal  and  work  as  hard  as  he  pleases ;  that 


322  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

his  wages  are  as  satisfactory  and  his  income  better.  I  find 
that  the  good  men,  men  who  want  to  get  on  in  the  world,  leave 
the  union  fields  of  West  Virginia  and  come  into  the  non-union 
fields  to  work.  I  had  seven  men  one  day  leave  a  mine  in  the 
New  River  District  under  my  charge,  and  go  over  into  the 
Winding  Gulf  District,  simply  because  they  resented  the  fact 
that  they  had  to  pay  $2.50  every  two  weeks  to  the  check-off 
fund,  and  that  their  turn  of  cars  was  limited  to  what  the  mine 
committee  said  they  should  have.  The  result  of  all  this  is 
that  in  the  union  fields  of  our  State  the  sorry,  disturbing 
element  is  at  work.  In  the  non-union  fields  we  have  the  best 
men.  Is  there  any  reason  why  we  people  who  are  operating 
non-union  and  open  shop  should  wish  to  change  over  and  go 
into  the  fold  of  the  union  ?  Our  employes  think  as  we  do,  and 
I  believe  that  as  long  as  we  continue  the  policy  that  we  have 
successfully  carried  on  in  the  past  that  the  United  Mine  Work- 
ers of  America  will  not  have  very  much  chance  to  gain  a  foot- 
hold in  our  midst. 

Now,  gentlemen,  in  closing,  West  Virginia  is  a  long  way 
from  Colorado,  and  I  have  thoroughly  enjoyed  my  trip  out 
here,  and  highly  appreciate  the  honor  of  coming  before  you 
in  this  brief  way  and  trying  to  bring  home  to  you  the  out- 
line of  the  conditions  of  the  operators -in  the  open-shop  dis- 
tricts of  our  State.  I  do  not  know  whether  I  have  been  suc- 
cessful or  not  in  getting  home  to  you  the  fixed  idea  that  I  have 
always  had  in  connection  with  handling  this  labor  problem, 
but,  as  I  stated  in  starting  out,  you  first  want  to  get  yourself 
right,  get  your  own  mind  in  the  proper  state,  before  you 
attempt  to  take  hold  of  a  proposition  of  this  character,  and 
line  up  your  own  employes.  If  you  yourself  get  in  the  proper 
frame  of  mind,  I  can  see  no  reason  why  you  cannot  success- 
fully, in  any  mining  district  in  our  country,  eliminate  the 
evils  of  the  closed  shop  and  check-off,  which  is  thoroughly 
un-American,  and  operate  your  territory  on  an  open-shop 
basis. 


HEALTH    AND    LABOR    EFFICIENCY  323 


THE     APPLICATION     OF     INDUSTRIAL     MEDICINE     AND 

HEALTH  CONSERVATION  IN  THE  DEVELOPMENT 

OF  MINE  LABOR  EFFICIENCY 

By  ARTHUR  L.  MURRAY 

Surgeon,  United  States  Bureau  of  Mines;  A.  A.  Surgeon,  United  States 
Public  Health  Service,  Washington,  D.  C. 

The  efficiency  and  stability  of  labor  employed  in  mining 
has  been  the  subject  of  much  criticism  since  the  close  of  the 
war.  This  lack  of  stability  and  apparent  inefficiency  is  not 
peculiar  to  mine  employes,  but  has  been  general  to  all  classes 
of  labor.  The  unusual  physical  strain  and  nervous  tension, 
which  every  person  associated  with  industry  labored  under 
through  the  speeding  up  of  production  during  the  late  war,  is 
now  having  its  natural  reaction.  This  reaction  is  expressed 
by  a  spirit  of  restlessness  and  a  tendency  toward  irresponsi- 
bility. 

Necessity  of  Counteracting  Restlessness 

Employers  of  mine  labor  who  desire  a  permanent  and  effi- 
cient working  force  will  do  well  to  take  cognizance  of  these 
conditions  and  lend  their  every  effort  to  bring  influences  to 
bear  to  counteract  this  restlessness  and  failure  to  take  employ- 
ment seriously.  Stability  and  efficiency  in  labor  do  not  grow 
naturally  as  weeds  do;  they  are  created  and  stimulated,  and, 
employers  to  be  rewarded  with  such  virtues  in  their  employes 
must  be  willing  to  put  forth  conscientious  endeavor  to  develop 
and  encourage  them. 

In  the  field  of  industrial  medicine  and  health  conservation 
lie  some  of  the  potent  means  of  stabilizing  labor  and  building 
up  efficiency. 

Selection  of  Mining  Camp-Sites. 

Industrial  medicine  and  health  conservation  have  an  effective 
and  constructive  adaptation  to  every  stage  and  every  branch 
of  mining  operations.  At  the  very  outset  in  the  selection 
and  planning  of  camp  sites,  the  sanitary  engineering  phase 
of  industrial  medicine  is  most  helpful  in  determining  adequate 


324  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

and  potent  water  supplies,  proper  methods  of  drainage,  includ- 
ing sewage  disposal,  suitable  housing  conditions  as  regards 
light,  ventilation  and  overcrowding,  and  sanitary  disposal  of 
refuse  and  wastes. 

In  the  past  too  little  regard  has  been  paid  to  this  phase  of 
industrial  medicine  as  applied  to  mining.  Many  camps  today 
are  horrible  examples  of  improper  planning  and  failure  to 
anticipate  the  sanitary  needs  of  communities  before  they 
developed.  The  mining  industry,  through  unwholesome  and 
insanitary  living  conditions,  has  committed  many  lives  of 
employes  to  an  early  death  from  preventable  diseases.  Min- 
ers are  not  created  as  such  in  a  day  or  a  week.  They  become 
proficient  in  their  vocation  only  through  adaptability,  proper 
training  and  experience.  Every  such  death,  especially  of  a 
man  experienced  in  mining,  is  a  loss  to  the  industry  and 
detracts  its  part  from  normal  production. 

Selection  and  Placement  of  Man-Power 

The  human  machine  in  industry,  particularly  in  the  mining 
industry,  where  a  considerable  part  of  the  work  depends  upon 
manual  labor,  is  one  of  the  most  important  factors  to  suc- 
cessful operation.  Human  machines  or  man-power  should 
be  accredited  the  same  consideration  as  inanimate  machines 
or  horse-power. 

Men  should  be  selected  for  mine  work  with  two  main  con- 
siderations in  view:  physical  ability  and  adaptability,  and 
like  machines  should  be  placed  at  work  for  which  they  are 
known  to  be  mechanically  and  temperamentally  fit. 

Every  man  before  being  employed  by  a  mining  company 
should  be  given  a  physical  examination.  Such  an  examination 
will  furnish  an  index  by  which  men  may  be  placed  in  positions 
where  they  can  do  the  work  they  are  physically  capable  of 
doing.  The  employer  and  employe  are  thereby  mutually 
protected.  Men  with  physical  defects  that  are  not  debilitating, 
if  placed  at  work  which  exerts  a  strain  on  the  parts  affected, 
may  become  temporarily  or  permanently  debilitated.  The 
employer  in  many  instances  has  to  pay  compensation  which 
would  have  been  avoided  had  these  men  been  placed  at  work 
not  conducive  to  aggravating  the  original  defects. 

The  records  kept  of  pre-employment  physical  examinations 
by  firms  employftig  large  numbers  of  men  show  a  very  low 


HEALTH   AND   LABOR   EFFICIENCY  325 

rejection  rate.  Quite  frequently  the  physical  defects  found 
upon  examination  are  subject  to  easy  correction.  The  friendly 
advice  given  by  the  examining  physicians,  if  taken  advantage 
of,  leads  to  the  restoration  of  normal  physical  condition 
through  simple  treatment  or  minor  operations.  The  reports 
from  one  large  corporation  employing  thousands  of  men  show 
that  on  original  examination  7  per  cent,  of  those  applying  for 
work  were  found  physically  unfit,  but  by  simple  operations 
or  other  corrective  measures  three  out  of  every  four  of  those 
rejected  on  original  examination  were  sufficiently  restored  to 
normal  to  warrant  their  employment;  thus  the  total  net  rejec- 
tions amounted  to  less  than  2  per  cent,  of  all  those  applying 
for  work. 

Recently  the  writer  of  this  paper  had  occasion  to  study  the 
physical  examinations  of  metal-mine  hoisting  engine-men  ap- 
plying for  certificates  in  the  State  of  Utah.  Among  the  81 
applicants  the  examinations  showed  20  cases  with  defective 
vision,  3  cases  with  hernia,  4  cases  with  minor  deformities  of 
the  limbs  and  2  cases  with  constitutional  diseases.  Two  only 
of  these  applicants  were  rejected,  the  other  cases  through 
simple  treatment  or  properly  fitted  glasses  or  trusses  were 
physically  reclaimed  so  as  to  follow  their  calling  safely. 

Men  Should  Fit  Their  Work 

Many  men.  are  wrongly  placed  at  work  for  which  they  are 
not  fitted  through  previous  training  or  employment.  By  care- 
fully carding  at  the  time  of  physical  examination  the  lines  of 
work  with  which  a  man  is  familiar  and  has  had  experience,  a 
permanent  record  of  the  working  force  is  always  at  hand. 
The  original  placing  of  men  employed  can  be  governed  by 
iheir  past  experience  as  shown  by  their  card  records.  Also, 
if  at  any  time  men  are  required  for  a  special  line  of  work,  the 
card  records  may  afford  an  opoprtunity  to  locate  the  men 
needed  among  the  mine  force. 

So  far  as  possible  men  should  be  selected  for  their  stability. 
Frequent  labor  turn-over  is  costly  in  many  ways.  The  cost 
of  breaking  new  men  in,  the  disrupting  of  mine  crews,  the 
increased  office  work  of  opening  and  closing  accounts,  to  say 
nothing  of  the  effect  on  morale,  can  be  measured  in  dollars 
and  cents. 

The  average  cost  of  breaking  in  a  new  worker  and  making 


326  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

him  an  efficient,  integral  part  of  the  operating  force  of  an 
industry  has  been  estimated  to  be  $53.92  for  employing,  sur- 
veying, directing  and  training. 

Tendency  of  Miners  to  Drift 

In  mining,  to  a  greater  extent  than  in  any  other  industry, 
men  tend  to  drift  from  one  camp  to  another.  This  tendency 
seems  to  have  become  much  more  marked  during  the  past  few 
years.  All  things  being  equal,  a  married  man  is  more  likely 
to  become  permanent  and  to  be  a  greater  asset  to  a  mining 
camp  than  a  single  man.  As  a  rule,  a  miner  with  a  family 
takes  his  employment  more  seriously  than  a  single  man,  has 
at  heart  the  welfare  of  the  camp,  and  usually  will  direct  his 
influence  to  develop  the  moral  tone  of  the  community.  Many 
mining  companies  failing  to  realize  this  fact  have  discouraged 
rathe^  than  encouraged  a  stable  working  force  by  neglecting 
to  provide  living  conditions  which  appeal  to  the  family  man. 

Living  Conditions 

As  a  man  lives  so  is  he  liable  to  work.  The  living  condi- 
tions at  any  mine  largely  determine  the  type  of  labor  that 
seeks  employment  and  remains  at  that  mine.  A  camp  where 
housing  conditions  are  poor,  where  sanitary  conditions  are 
below  standard,  where  the  general  morale  has  been  permitted 
to  become  lax,  does  not  attract  the  best  element.  Men  who 
are  willing  to  put  up  with  such  conditions  are  usually  of  the 
"floater"  type,  shiftless,  lacking  in  responsibility  and  easily 
influenced  to  find  fault.  At  such  camps  agitators  find  fertile 
soil  for  creating  dissatisfaction. 

The  conservation  of  health  and  the  prevention  of  illness  is 
one  of  the  biggest  problems  faced  by  industry.  The  energy 
a  man  may  expend  depends  directly  upon  his  physical  condi- 
tion, which,  in  turn,  depends  upon  the  way  and  conditions 
under  which  he  lives. 

Housing  conditions  for  workers,  to  promote  their  best 
efforts  and  production,  should  be  as  wholesome  as  they  can 
be  made.  There  should  be  no  overcrowding.  Living-rooms 
should  be  light,  well  ventilated  and  provided  with  adequate 
heating  facilities.  Houses  for  married  workers  should  be 
attractive  and  of  a  type  to  encourage  homemaking  and  the 
development  of  self-esteem. 


HEALTH  AND  LABOR  EFFICIENCY  327 

Boarding-houses  should  be  kept  clean,  and  caretakers  should 
be  held  to  strict  account  for  their  care  and  cleanliness.  Rigid 
supervision  of  the  dining-rooms  and  kitchens  of  boarding- 
houses  should  be  maintained.  Food  is  one  of  the  most  impor- 
tant means  of  spreading  disease,  and  lack  of  care  in  its  prep- 
aration and  serving  may  cause  serious  outbreaks  of  illness, 
which  lead  to  a  decided  curtailment  of  production. 

The  food  supplied  at  a  mining  camp  should  be  good,  plain 
and  wholesome.  It  should  be  stored  and  handled  in  an  abso- 
lutely cleanly  manner. 

Every  mining  camp  should  be  provided  with  an  adequate 
supply  of  pure  water  and  every  precaution  should  be  taken  to 
safeguard  its  purity. 

Wherever  possible  a  mining  camp  should  have  a  sewerage 
system  with  an  effluent  that  permits  of  no  nuisance.  If 
such  a  system  is  not  practical,  usually  a  sewage-disposal  sys- 
tem with  septic  tank  or  tanks  can  be  installed.  The  general 
drainage  should  be  such  as  to  prevent  the  accumulation  of 
stagnant  water  in  or  about  the  camp.  Refuse  of  all  kinds 
should  be  collected  at  regular  intervals  and  burned.  Refuse 
heaps  are  incubators  for  germs  of  disease  and  their  distribut- 
ors, filth  and  disease-carrying  flies.  Piles  of  cans  and  filth 
dotted  over  its  confines  detract  from  the  appearance  of  a  min- 
ing camp.  Such  conditions  not  only  reflect  upon  the  inhabi- 
tants of  the  camp,  but  also  upon  the  management  of  the  mine. 

Proper  supervision  of  the  sanitary  conditions  of  a  mining 
camp  is  no  small  problem,  but  the  benefit  is  shared  by  every 
member  of  the  community.  Every  mining  community  should 
have  a  printed  sanitary  code  covering  the  usual  classes  of 
nuisances  and  provisions  for  their  abatement.  An  experi- 
enced sanitary  supervisor  should  be  placed  in  charge  of  the 
enforcement  of  these  regulations  and  held  to  strict  account- 
ability for  the  general  sanitary  condition  of  the  camp. 

Working  Conditions 

The  surroundings  under  which  a  man  is  forced  to  work 
re-act  on  his  mental  atitude  and  his  labor  output  in  propor- 
tion to  whether  they  are  healthful  or  harmful,  safe  or  unsafe. 

Safety,  sanitation,  ventilation  and  lighting  underground 
should  receive  proper  attention.  By  careful  study  of  working 
conditions  and  the  cprrection  of  causes  leading  to  accidents 


328  PROCEEDINGS  OF  AMERICAN   MINING  CONGRESS 

and  illness  much  needless  time  loss  may  be  eliminated.  Safety 
devices  and  properly  directed  safety  supervision  more  thai 
pay  their  cost  in  decreased  loss  of  labor  through  lessenec 
accidents  and  saving  in  compensation. 

The  number  of  fatal  accidents  in  the  mines  of  the  Unitec 
States  have  averaged  during  the  past  four  years  more  thai 
3000  per  year.  The  loss  of  so  large  a  number  of  men — manj 
of  them  experienced  miners — must  be  no  small  factor  in  reduc 
ing  labor  efficiency  and  increasing  cost  of  production  throug] 
compensation  settlements.  Added  to  this  are  the  non-fata 
accidents  causing  time  loss  varying  from  one  day  to  tota 
disability  and  their  compensation  costs.  The  metal  mine 
alone  have  averaged  for  the  past  four  years  more  than  45,00( 
non-fatal  accidents  per  year. 

On  large  operations  a  safety  engineer  is  as  much  a  neces 
sity  as  a  mining  engineer. 

Men  at  work  breathe  more  air  than  otherwise,  and  the 
wholesomeness  of  the  air  they  breathe  largely  determines  the 
amount  of  labor  they  can  perform.  Therefore,  both  as  regard* 
health  and  labor  economy,  proper  ventilation  of  working 
places  benefits  not  only  the  employes,  but  also  the  employer, 

Drinking  fountains  and  sanitary  latrines  underground  are 
recognized  necessities  of  large  mining  operations  and  ad( 
much  to  the  comfort  and  health  of  the  men.  The  general  care 
of  underground  workings  in  respect  to  keeping  them  clean  and 
free  from  debris  has  a  marked  effect  on  the  men.  The  sight 
of  debris  in  passageways,  drifts  and  tunnels  encourages  shift 
lessness  and  carelessness. 

Well-constructed  change-houses  where  miners  can  bathe 
and  change  from  their  soiled  and  sweaty  mine  clothing  to 
dry,  clean  clothes  before  going  home  promotes  both  health  and 
self-respect. 

Above  ground  the  general  sanitary  conditions  about  the 
mine  should  be  good,  the  same  as  in  the  camp.  Debris  should 
not  be  permitted  to  accumulate  in  and  about  the  mine 
entrance  or  about  the  buildings.  Drainage  should  be  such 
that  water  will  not  collect  and  stagnate.  Adequate  toilet 
facilities  should  be  provided. 

Efficiency  is  applied  intelligence.  As  men  become  more 
enlightened  their  desire  for  better  and  more  wholesome  work- 


HEALTH.  AND  LABOR   EFFICIENCY  329 

ing  conditions  is  a  natural  result.  Hence,  employers  who 
desire  intelligent  and  efficient  men  must  make  their  working 
Iconditions  as  safe  and  wholesome  as  possible. 

The  interest  of  employes  in  their  work  and  their  employ- 
tag  company  should  be  stimulated  and  kept  aroused  at  all 
times.  Committees  on  safety  and  committees  on  employes' 
welfare,  selected  from  among  the  workers,  to  meet  and 
discuss  problems  affecting  conditions  in  and  about  the  mine 
and  camp  with  company  officials,  can  be  made  the  means  of 
effecting  a  common  viewpoint  on  matters  of  interest  to  all 
concerned.  The  company  should  open-mindedly  be  willing  to 
consider  all  matters  affecting  the  well-being  of  its  laboring 
force,  and  use  all  reasonable  means  of  promoting  and  enhanc- 
ing such  conditions.  Mutual  regard  for  the  welfare  of  the 
employes  and  the  economic  limitations  of  the  employer,  and 
the  ability  to  equalize  both  factors  is  one  of  the  greatest 
assets  to  be  desired  in  mine  superintendents. 

VJedical  Care,  Supervision  and  Instruction 

The  man  who  is  best  able  to  serve  .industry  is  the  one  who 
is  most  physically  fit.     It  is  the  purpose  of  industrial  medi- 
e  to  keep  the  working  forces  of  industry  as  near  physical 
par  as  possible. 

Industrial   medicine   operates   through  three   distinct  but 
iely  allied  channels :   preventive  measures,  corrective  meas- 
»  and  curative  measures.    The  first  two  are  better  known 
nder  the  name  of  industrial  hygiene. 

Preventive  Measures 

The  careful  supervision  of  the  sanitary  condition  of  min- 

camps  and  the  safeguarding  of  the  conditions  under  which 

loyes  live  promotes  the  general  health  of  the  community. 

3  proper  control  of  contagious  diseases  by  quarantine 

d  placarding  reduces  the  number  of  cases  arising  from  such 

'•auses. 

Medical   welfare  work,   especially   popular  instruction   in 
ional  and  public  hygitne  can  be  made  the  means  of  pre- 
tmg  much  sickness,  with  its  resulting  suffering  and  time 
The  average  loss  of  time  due  to  illness  among  the  work- 
trie  United  States  is  nine  days  per  year,  or  900  days  per 


330  PROCEEDINGS  OP  AMERICAN   MINING  CONGRESS 

100  employes  (about  2%  years).  The  greater  part  of  this 
illness  is  due  to  preventable  causes. 

Some  of  the  agencies  for  conducting  medical  welfare  work 
in  mining  communities  are  as  follows : 

Visiting  nurses  are  a  great  aid  in  caring  for  the  sick  and 
at  the  same  time  giving  instructions  in  home  sanitation, 
proper  methods  of  nursing,  prevention  of  the  spread  of  com- 
municable diseases  and  personal  hygiene. 

Short,  interesting  talks  on  health  subjects  given  at  regular 
intervals,  illustrated  when  possible  by  lantern  slides,  motion 
pictures  or  charts  are  of  much  benefit. 

Classes  among  the  women  and  older  children  of  the  camp 
for  instruction  in  first  aid  and  home  nursing  of  the  sick  can 
be  made  both  instructive  and  interesting. 

The  schools  should  provide  a  course  in  personal  and  public 
hygiene.  Oftentimes  through  interest  stimulated  in  children 
at  school  the  adults  at  home  are__reached. 

Clean-up  campaigns  and  anti-fly  campaigns  are  useful  in 
promoting  health  education  and  a  spirit  of  civic  betterment. 

Health  circulars  and  folders  often  serve  a  useful  purpose, 
and  if  the  community  supports  a  publication  a  department 
devoted  to.  the  health  of  the  worker  can  be  established. 

Corrective  Measures 

All  working  conditions  should  be  carefully  and  constantly 
studied  from  a  standpoint  of  hygiene.  Processes  or  condi- 
tions that  in  any  manner  operate  to  incapacitate  workers, 
should  be  remedied  so  as  to  eliminate  such  dangers  or  reduce 
them  to  a  minimum. 

Regular  medical  examination  of  each  employe  is  a  great 
aid  in  keeping  them  physically  fit  and  aids  materially  in 
checking  on  working  conditions  which  by  their  nature  tend 
to  cause  incapacity  and  time  loss. 

Many  conditions  in  mining  which  lead  to  disabilities,  both 
temporary  and  permanent,  are  insidious  in  their  causation, 
and  seldom  receive  the  attention  they  merit  until  irreparable 
damage  has  been  done.  Among  the  diseases  so  caused  are: 
Miners'  nystagmus  (eye  trouble),  miners'  phthisis  (lung 
trouble),  and  lead  poisoning. 


HEALTH  AND  LABOR  EFFICIENCY  331 

Curative  Measures 

The  medical  and  surgical  care  for  workers  should  be  as 
good  as  can  be  provided.  The  time  loss  from  disabling  sick- 
ness and  injury  can  be  materially  lessened  by  prompt  and 
efficient  medical  attention.  Slight  ailments  or  injuries  if 
promptly  attended  to  may  be  corrected  with  little  or  no  loss 
of  time,  but  if  neglected  they  may  become  serious,  and  their 
correction  or  cure  entail  a  long  period  of  absence  from  work. 
Men  below  par  physically  cannot  be  expected  to  measure  up 
to  par  in  eifort. 

Where  practical  a  hospital,  fully  equipped,  should  be  main- 
tained at  the  mine.  If  no  hospital  is  provided  there  should 
be  an  emergency  room  where  patients  can  ge  given  emergency 
surgical  care  and  made  as  comfortable  as  possible  until  they 
can  with  safety  be  removed  to  a  hospital. 

Community  Influences 

The  social  and  moral  tone  of  a  mining  community  is  the 
sum  total  of  the  social  status  and  moral  consciousness  of  its 
inhabitants.  They  are  elevated  or  lowered  in  direct  propor- 
tion to  the  predominating  type  of  the  population.  Lack  of 
regard  for  community  influences  has  been  costly  to  many 
employers. 

Approximately  one-third  of  a  man's  time  is  employed  at 
his  labor.  Another  third  is  usually  given  over  to  sleep.  The 
remaining  third  a  man  seeks  diversion  through  recreation. 
This  spare  time  through  environment  may  be  influenced  for 
good  or  for  evil.  Every  mining  camp,  if  it  desires  to  pro- 
gress, must  recognize  that  wholesome  and  health-building 
facilities  for  recreation  are  a  necessity. 

A  few  of  the  community  influences  which  operate  as  an 
asset  are  given  below: 

Good  schools,  which  provide  for  the  growing  generation  an 
opportunity  for  education. 

A  community-house,  accessible  at  all  times  for  community 
social  gatherings,  is  a  decided  advantage.  A  community 
social  and  recreational  program  promotes  well-being  and  pro- 
vides clean,  wholesome  amusement  for  all  the  population. 

A  community-housing  proposition  which  makes  possible 
the  building  of  homes  is  a  most  valuable  means  of  developing 


332  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

a  conscientious  laboring  force  who,  through  property  owner- 
ship, have  a  greater  interest  in  the  permanency  and  the  civic 
and  moral  welfare  of  the  camp. 

Community  gardens  offer  a  means  of  healthful  exercise  in 
the  open  air  and  aid  in  reducing  the  cost  of  living. 

A  co-operative  store  which  is  really  co-operative  in  func- 
tion is  a  great  help  in  making  a  camp  prosperous  and  its 
inhabitants  contented.  Such  a  store,  where  the  profits  are 
shared  by  all  who  patronize  it  in  proportion  to  the  total  of 
their  purchases,  goes  a  long  way  toward  reducing  living  costs. 

Summary 

Mining,  to  take  the  place  it  deserves  along  with  other 
branches  of  industry,  will  be  compelled  to  keep  step  with  the 
progress  of  the  times  and  give  careful  study  and  due  con- 
sideration to  the  development  of  its  labor  efficiency. 

Industrial  medicine  and  health  conservation  can  be  of  mate- 
rial aid  in  building  up  and  maintaining  an  efficient  working 
force. 

Pre-employment  medical  examination  affords  an  oppor- 
tunity for  selecting  a  working  force  physically  and  constitu- 
tionally fit  for  the  strenuous  manual  labor  required  in 
mining. 

Well-planned  camps  having  proper  sanitary  supervision 
safeguard  the  health  of  the  workers  and  eliminate  much  need- 
less time  loss  from  sickness.  Attractive  camps  with  good 
housing  facilities  tend  not  only  to  hold  the  labor  already  living 
there,  but  they  attract  the  better  class  of  labor  from  camps 
less  wholesome.  The  class  of  labor  drawn  to  a  mining  camp, 
whether  thrifty,  industrious  and  stable  or  shiftless,  inefficient 
and  unstable,  is  largely  influenced  by  the  nature  of  the  camp. 

Carefuly  study  of  working  conditions  so  as  to  safeguard 
them  against  accident  and  health  hazards  reduces  lay-offs 
from  such  causes  and  frequently  leads  to  improvements  in 
the  working  environment,  which  markedly  increases  labor 
efficiency. 

The  type  of  medical  service  provided  in  a  camp  has  a  direct 
bearing  on  the  amount  of  time  loss  due  to  accidents  and  ill- 
ness. Prompt  and  efficient  medical  care  usually  reduces  the 
period  of  disability  in  cases  of  injury  and  sickness,  effecting  a 
saving  in  time  loss  to  the  company  and  wage  loss  to  the 


HEALTH   AND  LABOR  EFFICIENCY  333 

worker.  The  medical  service  of  a  camp  should  be  so  organ- 
ized that  its  efforts  in  the  maintenance  of  health  will  be  along 
preventive  lines,  as  well  as  curative. 

The  wholesome  or  unwholesome  influences  of  a  mining  camp 
bear  a  decided  relation  to  production.  Efficiency  and  disorder 
are  never  associated.  Conditions  that  stimulate  efficiency 
and  industry  are  the  same  as  those  that  make  a  community 
wholesome  and  a  desirable  place  in  which  to  live  and  rear  a 
family. 

As  an  incentive  to  thrift,  industry,  and  efficiency,  every  com- 
pany should  recognize  that  its  working  force  is  entitled  to 
good  living  conditions,  an  adequate  water  supply,  sewers, 
light,  medical  care,  community  welfare  endeavor,  and  facilities 
for  healthful  and  wholesome  recreation  as  a  part  of  the  cost 
of  production. 


334  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

A  POWDERLESS  MECHANICAL  PROCESS  FOR  MINING  COAL 

By  D.  VANCE  SICKMAN,  B.  S.  E.  E.,  Denver,  Colorado. 

The  coal  industry  today  is  confronted  with  a  greater  com- 
bination of  difficulties,  and  a  situation  more  critical  as  effect- 
ing its  future  welfare,  than  ever  before  in  its  history.  We  are 
undoubtedly  on  the  threshold  of  an  era  of  great  industrial 
development,  and  to  make  this  possible  we  must  have  a  con- 
stant, adequate  and  ever-increasing  supply  of  coal.  Are  the 
present  difficulties  going  to  be  set  aside — the  great  basic  prob- 
lems now  confronting  the  industry  solved — so  that  the  pro- 
duction of  coal  in  the  near  future  will  meet  this  new  demand  ? 

Troubles  of  the  Coal  Industry 

The  coal  industry  has  bound  up  in  it  all  the  combined 
difficulties,  annoyances  and  jeopardy  of  every  other  business 
or  industry.  In  addition,  it  is  so  hazardous,  in  respect  to  life, 
property  and  capital  that  our  Government  spends  more  time, 
effort  and  money  in  protecting  and  safeguarding  it  than  all 
other  industries  combined.  The  coal  operator,  in  addition  to 
combating  the  combined  difficulties  inherent  in  all  other  indus- 
tries, has  to  comply  with  numerous  State  and  Federal  laws, 
rules  and 'regulations,  enacted  and  promulgated  to  protect  life 
and  property.  Practically  every  one  of  these  laws,  rules  and 
regulations,  although  in  their  general  application  necessary 
and  for  the  public  welfare,  they  nevertheless  are  an  annoy- 
ance and  result  in  burdening  the  coal  operator  with  additional 
costs,  regulations  and  restrictions  from  which  the  ordinary 
industry  or  business  is  relieved.  Also  the  coal  industry  suf- 
fers from  a  more  pernicious,  ignorant  and  unjust  public  criti- 
cism and  antagonism  than  does  any  other  industry.  The 
politician  who  wishes  to  attract  notice  has  but  to  shout  from 
the  house-tops,  "Down  with  the  Coal  Trust !"  and  he  instantly 
springs  into  public  favor.  This  very  spirit  of  public  con- 
demnation of  our  most  important  industry  may  result  in  new 
State  and  Federal  laws  being  enacted  in  the  near  future,  which 
will  further  jeopardize  the  -welfare  of  the  industry.  Beset 
on  every  side  with  handicaps,  burdens,  legal  restrictions  and 


MINING   COAL   WITHOUT   EXPLOSIVES  335 

difficulties  of  every  conceivable  nature,  such  as  no  other  indus- 
try has  had  to  endure  and  withstand,  these  very  forces  that 
now  seem  about  to  crush  it  may  be  the  cause  of  binding  the 
discordant  factions  together,  and  this  unity  of  purpose  and 
effort  result  in  stabilizing  the  industry,  insuring  it  against 
future,  pernicious,  legal  restrictions  and  the  harmful  con- 
demnation of  an  uninformed  and  misinformed  public. 

It  takes  more  brains,  more  nerve,  initiative  and  executive 
ability  to  operate  a  coal  mine  successfully  than  any  other 
business.  An  explosion,  a  serious  accident,  a  mine  fire,  an 
error  in  engineering  judgment,  a  labor  strike,  a  shortage  of 
cars,  an  unfavorable  market,  or  even  a  mild  winter,  may  con- 
vert a  paying  mine  into  a  financial  burden,  or  in  an  instant 
destroy  entirely  the  result  of  years  of  investment  and  develop- 
ment. 

The  greatest  difficulty  in  the  coal  industry  is,  however,  not 
external,  but  internal.  It  has,  in  general,  become  stagnant 
within  itself.  It  needs  rejuvenation — a  new  life,  new  effi- 
ciency. It  must  throw  off  its  old  bonds,  its  restrictions,  its 
old  subjections  to  the  "human  element"  and  adopt  a  new,  more 
modern  and  more  efficient  method  of  extraction  and  operation. 

Machinery  and  American  Progress 

America's  great  industrial  development  is  primarily  due  to 
the  use  of  mechanical  appliances.  In  this  we  excel  the  world. 
And,  further,  in  the  -introduction  of  mechanical  appliances, 
we  have  but  followed  one  of  the  great  generative  and  creative 
instincts  of  man.  When  God  created  the  world  and  turned 
it  over  to  man,  He  also  gave  him  "dominion  over  the  fish  of 
the  sea,  and  over  the  fowls  of  the  air,  and  over  all  the  earth," 
and  this  includes  all  the  forces  of  nature.  In  exercising  our 
dominion  over  these  forces  we  have  invented  and  perfected 
our  marvelous  mechanical  devices.  This  instinct  is  today  so 
fully  developed  that  we  have  evolved  what  may  be  briefly 
termed  the  "psychology  of  the  machine."  The  perfecting  of 
the  automobile  and  the  aeroplane,  and  their  effect  on  the 
human  instincts,  illustrates,  perhaps,  more  forcibly  than  any 
other  modern  mechanical  achievement,  the  application  of  this 
"psychology  of  the  machine"  to  industrial  development.  When 
a  man  buys  an  automobile,  the  first  few  months  are  devoted  to 
mastering  control  of  its  forces,  but  the  moment  he  has  mas- 


336  PROCEEDINGS    OF   AMERICAN    MINING    CONGRESS 

tered  those  forces  arid  has  confidence  in  his  ability  to  control 
them  his  natural  instinct  is  to  drive  those  forces  to  their 
utmost  limit.  He  is  but  following  his  God-given  instincts, 
and  the  result  is  that  we  have  the  speed  demon  of  the  auto- 
mobile and  the  dare-devil  of  the  air.  And  right  here  is  where 
a  second  phenomenon  occurs,  and  it  is  due  to  this  one  thing, 
perhaps,  more  than  to  any  other  that  America  dominates  the 
industrial  world.  It  is  the  fact  that  the  moment  the  operator 
learns  to  manipulate,  control  and  direct  the  forces  of  the 
machine,  he  subconsciously  becomes  dominated  by  those 
forces. 

The  machine,  for  the  moment  at  least,  becomes  master  of 
the  man! 

Machinery  and  Operatives 

Observe  any  highly  developed,  labor-saving  machine  in  the 
hands  of  a  skillful  operator,  and  as  long  as  the  machine  does 
not  require  any  undue  amount  of  physical  effort  in  its  manipu- 
lation, you  will  observe  that  the  operator  will  drive  it  to  its 
work  to  the  limit  of  its  capacity,  that  he  is  captivated  by  the 
forces  he  controls,  and  that  he  becomes  temporarily  and 
unconsciously  the  employe  of  the  machine.  He  is  no  longer 
the  servant  to  the  machine.  He  is  the  director  and  dictator — 
the  employe  of  the  forces  controlled. 

Due  to  the  development  of  these  instincts  for  several  genera- 
tions by  the  universal  use  of  mechanical  appliances  in  our 
American  industries,  we  have  reached  the  stage  where  labor- 
saving  appliances  and  machines  are  now  demanded  by  the 
American  workman.  He  no  longer  opposes  their  introduc- 
tion— he  demands  it  as  his  right.  He  demands  appliances 
and  equipment,  which  he  merely  puts  in  motion,  controlling 
the  forces  of  nature,  and  refuses  to  use  his  own  physical 
effort  as  a  substitute  for  the  machine  as  he  has  in  the  past. 

Machinery  and  Efficiency 

There  is  also  a  third  consideration  in  the  "psychology  of 
the  machine,"  and  that  is  the  increase  in  general  efficiency 
resulting  from  the  installation  of  labor-saving  devices.  The 
miner,  using  the  pick  and  shovel,  of  which  he  is  the  servant, 
may  shirk  his  work  and  refuse  or  neglect  to  do  more  than  he 
feels  he  ought  to  do,  but  under  the  impulse  resulting  from  the 


MINING   COAL  WITHOUT   EXPLOSIVES  337 

introduction  of  the  machine,  he  is  unconsciously  stimulated  in 
his  efforts.  The  machine  itself  decides  the  speed  at  which 
the  work  shall  be  done,  and  the  laborer  who  follows  after  or 
who  directs  its  operation  has  no  desire  to  see  it  lag.  The 
machine  sets  the  pace — labor  co-ordinates  and  co-operates 
with  it.  The  mechanical  efficiency  of  the  machine  breeds  a 
like  efficiency  in  the  man.  The  skilled  and  efficient  workman 
will  seek  employment  in  the  highly  developed,  mechanically 
operated  mine,  and  will  shun  the  mine  that  neglects  to  provide 
efficient  appliances. 

In  attempting  to  apply  these  same  general  principles  to 
the  present  methods  of  extraction  in  the  coal  mine,  the  effi- 
ciency engineer  is  immediately  confronted  with  insurmount- 
able difficulties.  This  is  due  to  the  fact  that  present  methods 
of  mining  are  not  a  complete  mechanical  process,  and  the 
frailties  of  the  "human  element"  are  injected  into  such  a  large 
number  of  the  operations  that  the  advantages  incident  to  the 
use  of  such  mechanical  appliances  as  are  now  employed  are, 
in  a  large  measure,  neutralized. 

The  great  panacea  for  the  coal  industry  is  to  perform  every 
operation  in  the  entire  process  of  extraction  by  purely  mechan- 
ical means.  Ever  since  coal  has  been  mined  this  has  been 
the  dream  of  every  coal  operator,  every  engineer  and  every 
miner. 

The  most  important  operation  in  mining  coal — in  fact,  the 
actual  mining  function  itself — is  now  done  by  an  agency  over 
which  the  efficiency  engineer  not  only  has  no  control,  but  use 
of  such  agency  interferes  with  and  practically  prevents  any 
advantages  due  to  the  use  of  mechanical  appliances  being 
attained. 

This  disturbing  and  efficiency  destroying  element  is  powder. 

The  Effect  of  Powder  on  Coal  Mining 

Abolish  the  use  of  powder,  perform  all  the  operations  in 
the  process  of  extraction  by  purely  mechanical  means,  and 
the  coal  mine  becomes  subject  to  the  same  general  laws  and 
principals  that  have  made  our  great  factories  such  models 
of  efficiency.  Every  operation  in  the  entire  process  of  extrac- 
tion becomes  entirely  under  the  control,  direction  and  super- 
vision of  the  efficiency  engineer,  and  the  production  of  coal  is 
placed  on  a  par  with  the  efficiency  of  the  factory.  All  the 


338  PROCEEDINGS   O'F   AMERICAN    MINING   CONGRESS 

disturbing  factors  due  to  the  "human  element"  are  set  aside 
and  coal  is  produced  by  a  routine  of  mechanical  operations 
that  ensure  constant  and  uniform  results.  All  the  uncer- 
tainties, the  jeopardy  and  hazard  to  capital  and  property,  the 
toll  of  death  and  accidents,  are  forever  eliminated. 

All  the  restrictions  and  regulations  imposed  by  existing  and 
all  future  laws  are  entirely  set  aside.  The  coal  industry  is 
at  once  and  forever  freed  from  its  bonds  and  its  greatest 
burdens. 

The  process  of  extraction  in  the  coal  mine  of  the  future  will 
consist  of  three  mechanical  operations :  First,  the  use  of  under- 
cutting machines;  second,  the  use  of  mechanical  appliances 
for  breaking  the  coal  down  after  it  has  been  undercut;  and, 
third,  loading  it  into  the  pit  cars  by  efficient,  mechanical, 
labor-saving  loading  machines.  The  use  of  the  pick  and  the 
shovel  will  become  a  "lost  art." 

All  the  elements  of  a  purely  mechanical  process  of  extrac- 
tion are  now  in  general  use,  except  the  breaking  down  appli- 
ances. In  performing  this  function  we  have  not  made  a  single 
advance  in  a  hundred  years  of  coal  mining.  We  still  use 
powder. 

Mining  Coal  Without  Powder 

After  more  than  14  years  of  experimenting,  developing  and 
perfecting,  the  mechanical  appliances  for  breaking  the  coal 
down  after  it  has  been  undercut  are  now  ready  to  take  their 
place  in  this  ideal  process  of  extraction,  making  the  dream  of 
a  century  a  reality,  in  that  coal  can  now  be  mined  practically 
and  commercially  without  the  use  of  powder. 

It  is  not  my  purpose  to  describe  fully  the  details  of  mechan- 
ical construction,  the  operating  characteristics,  or  the  method 
of  application  of  these  breaking-down  appliances.  Nor  is  it 
possible  to  discuss  fully  the  economical  and  operating  advan- 
tages that  result,  or  the  relative  costs  of  using  a  mechanical 
process  of  extraction,  as  compared  with  the  use  of  powder. 
These  are  big  subjects  in  themselves,  and  as  they  all  have 
been  so  fully  discussed  and  illustrated  in  published  articles, 
pamphlets,  etc.,  they  are,  no  doubt,  more  or  less  familiar,  at 
least,  to  the  operators  and  engineers  of  this  territory. 

Briefly  stated,  however,  the  principle  employed  is  a  dupli- 
cation of  that  found  in  nature  in  every  coal  mine,  in  that  the 


MINING  COAL  WITHOUT   EXPLOSIVES  339 

coal  is  broken  down  by  developing  and  applying  what  may  be 
termed  an  "artificial  squeeze."  We  have  all  witnessed  the 
effect  of  roof  pressure  on  a  "pillar"  or  an  old  "stump"  and 
observed  that  the  application  of  the  enormous  pressure  of  the 
slowly  closing-in  roof  has  completely  broken  and  shattered 
the  mass  of  coal  along  its  natural  "cleavages"  or  "slips." 
This  same  effect  is  obtained  in  the  application  of  the  breaking- 
down  appliances,  with  the  added  advantages  that  the  coal  is 
first  undercut  and  the  forces  applied  in  a  more  scientific  and 
practical  manner  to  produce  certain  definite  results. 

Preparation  for  Breaking  Down  Coal 

The  coal  is  first  prepared  for  breaking  down  by  cutting 
rectangular  slots  into  the  body  of  coal,  one  slot  near  each 
"rib"  and  one  in  the  center  of  the  "room."  These  slots  are 
cut  as  near  the  "roof"  as  possible  and  parallel  with  the  roof. 
Those  on  the  "rib"  are  cut  parallel  with  the  "rib"  wall  and  as 
close  up  in  the  corner  as  possible.  Where  the  coal  is  reason- 
ably well  stratified,  that  is,  having  the  usual  cleavage  planes 
and  "slips,"  the  center  slot  is  not  necessary,  as  the  coal  will 
break  down  from  "rib"  to  "rib"  without  using  the  center  slot. 
The  slotting  machine  used  for  cutting  these  slots  is  self-con- 
tained and  self-propelled.  It  consists  of  a  traveling  bed-plate 
of  the  "caterpillar"  or  "chain-track"  type,  which  can  be  driven 
from  place  to  place  in  the  mine  just  as  tractors  are  driven  on 
the  farm.  It  can  also  be  run  on  the  rails  when  desired.  The 
slots  are  cut  by  a  cutter  bar  of  standard  design,  mounted  on 
this  traveling  bed-plate,  and  arranged  so  that  it  can  be  easily 
raised  or  lowered,  adjusted  in  position  for  cutting  the  slots 
and  then  locked  in  position. 

The  cutter  bar  is  simply  inserted  and  withdrawn,  cutting 
the  slot  in  less  than  three  minutes  after  the  machine  is 
locked  in  position.  The  slots  are  cut  to  a  depth,  approxi- 
mately, the  same  as  the  depth  of  the  undercut.  The  standard 
width,  or  "kerf,"  is  4%  inches  and  the  length  of  the  slot  is 
varied  to  fit  condition,  simply  by  changing  the  width  of  the 
cutter  bar.  On  the  standard  slotting  machine  cutter  bars 
18,  24  or  32  inches  wide  can  be  used.  This  slotting  machine  is 
simply  the  combination  of  two  old  and  very  highly  developed 
machines,  the  "chain-track"  type  tractor,  converted  into  a 
traveling  bed-plate,  making  the  machine  self-contained  and 


340  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

self-propelled,  and  the  old-style  under-cutting  machine,  simpli- 
fied and  modified  for  cutting  a  slot  near  the  roof  instead  of 
underneath  the  coal.  It,  therefore,  embodies  no  new  or 
untried  mechanical  ideas  or  construction.  Both  of  these  old 
elements  have,  however,  a  great  many  new  and  special  opera- 
ting characteristics,  all  of  which  have  been  carefuly  worked 
out,  ensuring  great  rapidity  and  ease  in  operation  and  manipu- 
lation. 

Description  of  New  Coal-Mining  Machine 

Into  these  rectangular  slots,  using  one  slot  at  a  time,  is 
inserted  a  rectangular,  hydraulic  expanding  bar  made  in  two 
sections,  each  section  containing  pistons  which  are  expanded 
by  water  pressure.  The  bar  is  rectangular  in  cross-section, 
being  4%  inches  in  depth  by  5Va  inches  wide,  the  length  of 
each  section  depending  on  the  number  of  pistons  used.  The 
shorter  section  bar,  containing  from  three  to  six  pistons, 
depending  on  the  size  used,  is  inserted  into  the  slot  first.  The 
slot  is  cut  of  proper  length,  18  to  32  inches,  permitting  this 
section  to  be  shoved  to  the  back  of  the  slot  and  placed  parallel 
to  the  back  wall  of  support  immediately  above  the  termina- 
tion of  the  undercut.  The  longer  section  of  the  bar,  contain- 
ing from  five  to  eight  pistons,  is  then  inserted  into  the  slot  and 
placed  at  right  angles  to  the  first  section  and  parallel  to  the 
rib  wall,  directly  above  the  termination  of  the  undercut,  at  the 
"rib."  The  water  for  ejecting  the  pistons  is  conveyed  from 
a  high-pressure  hydraulic  pump  to  the  bar  through  folding 
steel  tubing,  each  section  of  the  tubing  being  22  inches  long 
and  joined  together  by  means  of  a  specially  designed,  flexible, 
universal  joint.  This  tubing  is  folded  up  like  a  clothes  rack. 
Connection  from  the  high-pressure  pump  to  the  bar  can  be 
made  any  distance,  from  a  few  inches  up  to  24  feet.  This 
folding  steel  tubing  is  practically  indestructible,  and  solves 
one  of  the  big  problems  in  this  process  of  mining,  as  it  per- 
mits of  water  being  conveyed  at  very  high  pressure  from  the 
pump  to  the  bar.  The  pump  is  of  standard  design,  suitable 
for  delivering  a  constant  volume  of  water  to  bars  of  proper 
size  for  developing  the  necessary  expanding  forces.  A  24-foot 
length  of  this  folding  tubing  weighs  approximately  42  pounds, 
and  will  withstand  30,000  pounds  per  square  inch  water  pres- 
sure. The  normal  water  pressure  used  is  10,000  pounds  per 


MINING   COAL  WITHOUT   EXPLOSIVES  341 

•v 

square  inch.  The  entire  equipment,  however,  is  designed  for 
using  water  at  15,000  pounds  per  square  inch  if  this  pressure 
should  ever  be  required.  All  parts  have  a  factor  of  safety  of 
two  to  one.  The  expanding  bars  are  furnished  in  four  sizes. 
The  smallest  size  develops  a  total  expanding  force  of  1,000,000 
pounds  and  the  largest  size  2,500,000  pounds.  The  pistons 
have  large,  flat  bearing  surfaces  to  prevent  indentation.  The 
thickness  of  vein,  character  of  coal  and  other  local  conditions 
determine  the  size  of  bar  used.  Under  normal  conditions  the 
bar,  developing  1,500,000  pounds  of  expanding  force,  will  break 
down  coal  nine  to  ten  feet  in  thickness  with  uniform  results. 
The  ejection  of  each  piston,  or  sets  of  pistons,  in  the  two  sec- 
tions of  the  bar  is  controlled  by  means  of  external  valves,  so 
that  the  ejection  of  certain  pistons,  or  sets  of  pistons,  can  be 
retarded  relative  to  the  others  or  ejected  progressively,  thus 
producing  a  combination  of  fracturing  forces  at  will  to  meet 
local  conditions  and  in  breaking  and  shattering  the  mass  of 
coal  to  the  extent  desired.  The  expanding  bars  are  com- 
paratively light  in  weight,  the  longest  section  of  the  smallest 
bar  weighing  only  145  pounds,  while  the  longest  section  of 
the  2,500,000-pound  bar  weighs  but  192  pounds.  As  each  sec- 
tion is  placed  in  the  slot  separately,  these  weights  are  easily 
handled. 

To  develop  such  enormous  expanding  forces  in  bars  of  these 
light  weights  necessitates  special  construction  of  the  pistons 
and  piston  chambers.  With  the  ordinary  type  of  piston  and 
piston  chamber,  subjected  to  10,000  pounds  per  square  inch 
water  pressure,  there  are  developed  such  enormous  internal 
stresses,  reactions  and  bending  moments  that  the  bar  is  dis- 
torted to  such  an  extent  as  to  become  entirely  inoperative.  To 
overcome  this  each  piston  chamber  contains  in  reality  two 
pistons,  one  telescoping  within  the  other,  but  traveling  in  oppo- 
site directions,  one  piston  being  ejected  upward  against  the 
"roof"  rock  and  the  other  downward  against  the  coal  to  be 
broken  down.  The  effect  of  this  construction  is  to  neutralize 
all  the  internal  reactions  which  tend  to  distort  the  bar ;  in  fact, 
the  bar  itself  is  subjected  to  a  maximum  internal  reaction 
equal  to  but  18  per  cent,  of  the  total  expanding  force  exerted. 
The  bar,  all  parts  of  which  are  made  of  chrome-vanadium 
steel,  has  sufficient  rigidity  to  withstand  this  reaction  without 
distortion.  Engineers  who  have  examined  this  type  of  tele- 


342  PROCEEDINGS   OF   AMERICAN    MINING   CONGRESS 

scoping  piston  pronounce  it  a  most  ingenious  design,  yet  it  is 
simple  in  construction  and  extremely  powerful.  It  represents 
the  final  step  in  the  solution  of  the  problem  of  mining  coal  by 
mechanical  means.  It  is  the  result  of  years  of  experimenting 
and  designing.  It  permits  of  the  use  of  expanding  bars  of 
small  size  and  sufficiently  light  in  weight  to  be  practical,  and 
also  of  the  use  of  water  pressures  that  develop  forces  hitherto 
undreamed  of  in  any  former  appliance  used  for  this  purpose. 

Effect  of  the  New  Machine 

As  the  enormous  forces  exerted  are  slowly  applied,  those 
exerted  by  the  short  section  of  the  bar,  which  lies  parallel  to 
the  back  wall  of  support,  shear  off  the  body  of  coal  squarely  at 
the  termination  of  the  undercut,  while  those  exerted  by  the 
long  section  of  the  bar  shear  off  the  body  of  coal  squarely  at 
the  rib  wall.  At  the  same  time  these  forces  follow  the  general 
law  of  forces  applied  to  a  non-homogeneous  mass,  as  they  are 
shunted  off  along  the  paths  of  least  resistance  throughout  the 
mass  and  along  the  natural  cleavage  planes  and  "slips,"  dis- 
sipating themselves  throughout  the  entire  body  of  coal,  so 
that  when  it  finally  falls  it  is  broken  into  large  lumps,  readily 
handled  and  loaded  out.  By  manipulation  of  the  external 
valves,  controlling  the  ejection  of  the  pistons,  the  operator 
can  produce  definite  shearing  stresses  along  and  parallel  to 
the  walls  of  support,  and  also  cause  the  body  of  coal  to  be 
broken  up  and  shattered  to  almost  any  degree  desired.  The 
effect  and  the  result  is  analogous  to  that  of  the  "roof  squeeze," 
with  the  advantages  of  being  scientifically  applied  and  within 
the  control  of  the  operator. 

The  crucial  requirement  of  a  successful  mechanical  appli- 
ance for  breaking  down  coal  is  to  shear  off  the  coal  squarely 
at  the  termination  of  the  undercut  and  also  along  the  "ribs," 
maintaining  uniform  width  of  "rooms"  and  "entries."  The 
failure  of  all  previous  attempts  to  solve  this  problem  has  been 
due  to  the  fact  that  heretofore  no  form  or  type  of  mechanical 
appliance  has  ever  developed  adequate  forces  to  perform  this 
function.  The  type  of  expanding  bars  used  in  this  process  of 
mining  will  develop  not  less  than  two  times  the  required 
forces  necessary  to  shear  coal  off  squarely  in  veins  at  least 
10  feet  in  thickness  at  their  point  of  application  and  at  the 
termination  of  the  underminings. 


MINING   CO4L  WITHOUT   EXPLOSIVES  343 

The  breaking-down  equipment,  consisting  of  the  high-pres- 
sure hydraulic  pump,  the  folding  steel  tubing  and  the  hydrau- 
lic bar,  are  also  mounted  on  a  traveling  bed-plate  of  the  "cater- 
pillar" type  and  rapidly  conveyed  about  the  mine,  thus  per- 
mitting the  breaking-down  process  to  follow  up  and  co-ordi- 
nate with  the  slotting  machine. 

Advantages  of  Elimination  of  Powder 

The  economical  and  operating  advantages  resulting  from 
the  elimination  of  the  use  of  explosives  in  coal  mining  is  a 
subject  on  which  volumes  could  be  written.  It  effects  econo- 
mies in  production  and  operation  that  are  simply  astounding. 
The  possibility  of  its  ever  being  accomplished  has,  in  the  past, 
been  so  remote  that  few  engineers  have  ever  seriously  con- 
sidered the  great  economical  revolution  and  evolution  it  would 
effect  in  the  coal  industry.  The  saving  in  life  and  property, 
the  preventing  of  accidents  in  general,  and  other  humane  and 
altruistic  features  are  apparent.  The  roof  fall  is  the  greatest 
death-dealing  and  accident-producing  element  in  coal  mining. 
Its  toll  is  greater  than  that  of  all  others  combined.  Eliminate 
the  shattering  effect  of  powder  explosions  to  the  roof  strata 
and  you  have  made  the.  mine  as  safe  as  the  factory.  Also, 
remove  the  health  and  efficiency  destroying  powder  smoke  and 
fumes,  and  the  sanitary  and  working  conditions  become  so 
pleasant  and  healthful  as  those  of  any  other  industry. 

The  economic  and  operating  advantages  affect  every  item  of 
production  cost,  resulting  in  a  saving  of  timbering;  the  pre- 
venting of  timbering  being  blown  out  and  the  subsequent  loss 
in  output  and  cost  of  cleaning  up  the  roof  fall;  the  saving  in 
costs  by  the  elimination  of  the  "shot-firers"  and  other  highly 
paid  labor;  the  saving  in  installing  and  maintaining  "shot" 
firing"  apparatus  and  equipment;  the  saving  in  timbering 
costs  due  to  the  "roof"  strata  not  being  disturbed  or  shat- 
tered, and  many  other  similar  cost  reducing  and  operating 
advantages. 

Great  as  these  savings  are,  however,  the  one  great  opera- 
ting advantage  that  overtops  any  and  all  other  considera- 
tions, and  which  effects  such  an  increase  in  efficiency  in  every 
operation,  severs  the  bonds  and  sets  aside  the  handicaps  inher- 
ent in  present  methods,  is  that  resulting  from  continuous,  unin- 
terrupted extraction.  It  requires  a  very  careful  study  and 


344  PROCEEDINGS   OF   AMERICAN    MINING   CONGRESS 

analysis  of  underground  operations  to  grasp  even  partly  what 
this  really  means  in  effecting  economies  in  the  whole  art  of 
coal  mining. 

Effect  on  the  Industry 

A  very  brief  resume  of  what  it  does  in  the  coal  industry 
"is  as  follows : 

(1)  The  output  is  constant  and  uniform  for  every  hour 
the  mine  is  operated,  resulting  in  at  least  25  per  cent,  to  30 
per  cent,  increase  in  tonnage  over 'present  methods,  with  no 
increase  in  overhead  or  burden  costs. 

(2)  Coal  can  be  continuously  produced  24  hours  per  day 
if  desired,  instead  of  only  8  hours  as  under  present  methods. 
The  operator  can  take  care  of  "peak  demand"  by  simply  run- 
ning the  mine  16  hours  or  24  hours  per  day  instead  of  having 
to  develop  and  maintain  territory  from  which  coal  is  extracted 
but  a  few  months  each  year.     This  saves  an  immense  invest- 
ment in  development,  interest  and  maintenance  charges.  Con- 
ceive the  great  advantages  that  would  have  resulted  had  this 
been  possible  during  our  recent  war,  or,  even  now,  in  meeting 
our  present  demands.    Increase  the  present  daily  tonnage  25 
per  cent,  as  a  result  of  constant,  uniform  output  per  hour,  and 
then  operate  16  hours  per  day  for  such  period  of  the  year  as 
necessary  to  take  care  of  an  unusual  or  "peak  demand,"  and 
it  would  be  unnecessary  to  open  up  a  single  new  mine  for  at 
least  a  quarter  century.     We  have  enough  mines  opened  up, 
and  in  them  sufficient  tonnage  developed  and  ready  for  extrac- 
tion, which,  if  properly  mined,  would  produce  in  excess  of  a 
billion  tons  annually  for  many  years  to  come. 

(3)  A    50    per   cent,    increase    in    the    amount    of   coal 
extracted  from  a  given  developed  territory.     Rooms  can  be 
driven  up  in  less  than  half  the  time  now  required,  and  the  coal 
extracted  twice  as  rapidly.     The  concentration  of  operations 
into  a  comparatively  small  area  for  a  given  output  will  prevent 
the  development  of  "squeezes'*  on  both  room  and  chain  pil- 
lars.   Our  present  percentage  of  extraction  is  approximately 
66  per  cent.     We  are  now  producing  650,000,000  tons  of  bitu- 
minous coal  annually.     We  develop  in  our  mines,  ready  for 
extraction,  not  less  than  970,000,000  tons  in  order  to  produce 
650,000,000  tons.    One-half  as  much  as  we  produce,  or  320,- 


MINING   COAL  WITHOUT   EXPLOSIVES  345 

000,000  tons,  is  forever  and  irrecoverably  lost  by  reason  of  the 
inefficiency  of  our  present  methods  of  mining.  A  concen- 
trated, continuous  process  of  extraction  will  save  more  than 
one-half  of  this  enormous  loss,  equal  to  more  than  the  entire 
output  of  our  greatest  coal-producing  State — Pennsylvania. 
How  much  is  the  saving  of  160,000,000  tons  every  year  worth 
to  the  coal  operators  of  this  country?  And  further,  what  is  it 
worth  to  future  generations? 

(4)  The  concentration  of  operations  also  permits  of  bet- 
ter supervision,  prevents  accidents,  results  in  greater  output 
per  dollar  invested,  and  other  savings  due  to  increased  effi- 
ciency, all  of  which  result  in  material  reductions  in  produc- 
tion costs. 

(5)  New  territory  can  be  developed  with  great  rapidity. 
If  the  new  development  work  is  fairly  well  concentrated  and 
three  eight-hour  shifts  employed,  entries  and  narrow  places 
can  be  driven  four  times  as  fast  as  under  present  methods. 
A  great  many  coal  companies  would  be  in  existence  today  and 
paying  dividends  had  this  been  possible  in  the  past. 

Slack  Coal  May  be  Reduced  by  Fifty  Per  Cent. 

(6)  A  reduction  of  at  least  50  per  cent,  in  the  amount  of 
slack  coal  produced.    In  the  West  and  Middle  West  slack  coal 
is  more  or  less  a  "by-product,"  often  sold  fot  much  less  than 
the  cost  of  production,  and  at  certain  seasons  of  the  year 
"dumped."      As  the  average  per  cent,  of  slack  coal,  using 
powder,  is  40  per  cent,  of  the  total  output,  the  lump,  nut  and 
other  prepared  sizes  must  carry  the  burden  of  costs  and  pay 
profits,  if  any.     A  reduction  in  the  amount  of  slack  coal  pro- 
duced, therefore,  very  materially  increases  the  "mine  run" 
value.   This  mechanical  process  of  extraction  will  reduce  the 
amount  of  slack  to  less  than  20  per  cent,  of  the  output,  effect- 
ing an  increase  in  the  mine-run  value,  at  present  prices,  of 
not  less  than  an  average  of  $1  per  ton  in  all  the  mines  of  the 
West  producing  coal  primarily  for  domestic  use. 

There  are  at  least  six  other  important  advantages.  The 
above,  however,  are  sufficient  to  indicate  the  possible  scope  of 
the  system. 

How  much  are  all  these  advantages  worth  in  dollars  and 
cents  to  the  coal  operator? 


346  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

A  number  of  the  best  engineers  in  the  West  have  tried  to 
figure  this  out.  When  you  get  into  the  problem,  however, 
you  find  that  there  are  so  many  local  conditions,  so  many  un- 
known and  inestimable  factors,  that  it  is  impossible  to  arrive 
at  even  a  reasonable  estimate.  The  figures  pyramid  into  an 
amount  that  seems  unbelievable  to  anyone  who  has  not  ana- 
lyzed them.  It  can,  however,  truly  be  said  that  the  perfecting 
of  the  appliances  used  in  this  process  of  mining,  making  it 
now  possible  to  mine  coal  by  a  purely  mechanical  means,  effects 
a  saving  in  production  costs  and  an  increase  in  operating  effi- 
ciency to  a  greater  extent  than  has  ever  occurred  in  any  other 
American  industry. 

The  basic  principles  necessary  to  a  practical,  commercial 
and  efficient,  powderless,  mechanical  process  of  extraction 
have  been  solved.  The  mechanical  principles  involved  are  as 
old  as  civilization. 

The  appliances  used  are  simply  modifications  of  those  in 
use  for  the  past  quarter  century,  developed  and  modified  to 
meet  conditions  found  in  the  coal  mine,  and  given  operating 
characteristics  that  fit  in  with  modern  standard  practice, 
completing  the  present  mechanical  operations  without  retard- 
ing, interrupting  or  interfering  with  any  other  operation  or 
with  transportation. 

In  this  connection  it  may  be  well  to  recall  the  statement 
made  only  a  few  years  ago  by  our  own  great  scientist  and 
mathematician,  Dr.  Simon  Newcomb,  for  many  years  profes- 
sor of  mathematics  in  the  United  States  Naval  Academy.  In 
commenting  on  the  possibilities  of  developing  the  flying 
machine,  Dr.  Newcomb  said:  "We  must  admit  that  if  any 
hope  for  the  flying  machine  can  be  entertained  it  must  be  based 
on  the  discovery  of  some  way  of  reversing  the  laws  of  gravi- 
tation, so  that  matter  will  be  repelled  instead  of  attracted; 
then  we  may  have  a  flying  machine." 

A  few  years  after  this  scientific  opinion  was  expressed  the 
flying  machine  was  perfected.  No  new  mechanical  or  scien- 
tific principle  was  discovered  or  used.  Orville  Wright  simply 
developed  and  applied  known  forces  and  agencies  in  a  proper 
and  scientific  manner.  So  in  this  new,  modern  and  more 
scientific  process  of  mining  coal  old  principles,  old  ideas,  old 
appliances  and  old  forces  are  employed,  but  developed  and 
applied  in  a  proper  and  scientific  manner  to  meet  the  require- 


MINING  COAL  WITHOUT  EXPLOSIVES  347 

ments.  Like  the  flying  machine,  its  solution  is  the  result  of 
years  of  study  and  analysis  of  what  was  required,  and  then  the 
employment  of  known  forces  and  mechanical  principles  in 
appliances  developed  and  perfected  to  perform  the  necessary 
functions  and  to  meet  these  requirements,  co-operating,  co- 
ordinating and  completing  the  mechanical  operations  already 
performed  by  existing  machines. 

Today  we  must  recognize  that  philosophy  which  is  the 
foundation  of  all  modern  creative  effort,  namely,  that  there 
are  few  border-line  limits  to  science  and  invention,  and  prac- 
tically no  finality  to  sanely  directed  human  effort.  This  is  the 
philosophy  that  has  solved  the  flying  machine  and  which  in 
the  future  will  take  powder  out  of  the  mine  and  make  its  toll 
of  human  suffering,  jeopardy  and  hazard  a  thing  of  the  past. 


348  PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

STATE  TAXATION  OF  METAL  MINES 
By  JAMES   G.  FITCH,   Socorro,   New  Mexico 

The  essential  differences  between  the  utilization  of  mineral 
and  of  other  classes  of  lands  logically  require  different  methods 
of  determining  the  valuation  upon  which  taxation  is  based. 
The  use  and  occupation  of  other  classes  of  lands  do  not  involve 
any  destruction  or  depletion  of  their  values  where  the  prin- 
ciples of  conservation  are  observed.  The  value  of  such  lands 
can  be  determined  with  almost  scientific  accuracy  by  applying 
the  doctrine  of  economic  rent.  The  value  of  such  lands 
increases  with  the  growth  and  development  of  the  community 
usually  termed  "unearned  increment."  The  anticipation  of 
this  unearned  increment  leads  to  speculative  prices  in  all 
growing  communities,  but  they  are  usually  too  fluctuating 
and  uncertain  to  form  a  proper  basis  for  taxation,  and,  as  a 
matter  of  fact,  are  rarely  taxed.  It  would  seem  that  it  is  only 
when  this  unearned  increment  has  actually  accrued  that  it 
becomes  properly  subject  to  taxation. 

Depletion  of  Mineral  Lands 

Mineral  lands,  however,  apart  from  their  surface  value, 
present  none  of  these  characteristics.  From  the  very  nature 
of  the  case  their  use  involves  the  destruction  of  their  mineral 
values.  These  values  can  be  taken  but  once,  and  when  taken, 
are  gone  forever,  so  far  as  the  land  is  concerned.  Every  pound 
of  mineral  extracted  diminishes  the  value  and  brings  nearer 
the  day  when  the  last  pound  that  can  be  profitably  extracted 
has  been  taken  and  the  land  ceases  to  have  any  value  as  min- 
eral land.  With  quantity  production,  such  as  is  demanded  by 
our  modern  methods,  the  coming  of  this  day  is  hastened.  It 
is  true  that  in  most  metalliferous  mines  the  arrival  of  this 
cannot  be  foretold  long  in  advance,  owing  to  the  impossibility 
of  ascertaining  the  amount  or  value  of  the  mineral  content, 
and  of  foreseeing  the  future  rate  of  production,  which  is  nec- 
essarily dependent  upon  the  state  of  the  market  and  of  other 
contingencies.  It  is,  nevertheless,  certain  and  inevitable. 

Unlike  other  classes  of  lands,  whose  values  of  soil  or  loca- 


STATE    TAXATION    OF    METAL    MINES  349 

t  tion  are  inherent  in  the  properties  themselves,  and  can  only 
be  used  and  enjoyed  while  they  remain  in  the  land,  mineral 
values  cannot  be  utilized  as  long  as  they  remain  in  and  form 
a  part  of  the  land.  It  is  only  by  severing  them  from  the  land 
that  they  can  be  made  to  serve  human  needs  or  desire.  In  an 
economic  sense,  these  mineral  values  are  as  truly  products  of 
the  land  as  are  the  products  of  the  farm  and  of  the  range. 
But  while  the  latter,  in  the  form  of  food  and  clothing,  soon 
reach  the  ultimate  consumer  and  cease  to  have  any  taxable 
value,  the  former — at  least  the  metallic  products — in  large 
part  enter  into  the  construction  of  buildings  and  other  struc- 
tures, machinery  and  equipment  of  various  kinds,  all  of  which 
are  of  a  more  or  less  permanent  character,  and  thus  become 
subject  to  taxation  for  considerable  periods  of  time.  The  doc- 
trine of  economic  rent,  as  applied  to  other  classes  of  land, 
cannot  be  made  applicable  to  mineral  values ;  and  the  doctrine 
of  the  unearned  increment  appears  to  be  applicable  only 
partly,  since  the  growth  and  development  of  the  community 
seems  to  affect  these  values  only  in  so  far  as  it  may  afford 
better  or  cheaper  means  of  transportation.  The  speculative 
prices  at  which  mining  property,  especially  if  undeveloped,  is 
usually  held  are  not  due  to  attempt  to  anticipate  the  unearned 
increment,  but  to  the  uncertain  and  unascertained  values. 
Such  speculative  prices  are  based  upon  hope  and  expectation, 
not  upon  demonstrated  facts. 

No  mining  man  can  afford  to  ignore  these  underlying  but 
all-important  facts.  And  it  would  seem  that  the  State,  in  pre- 
scribing a  just  and  adequate  system  of  taxation  for  mineral 
lands,  should  take  into  consideration  these  essential  differences. 

Estimation  of  Mineral  Values 

There  is  another  difference  of  great  practical  importance, 
due  to  the  fact  that  the  mineral  values,  of  metalliferous  mines 
at  least,  throughout  our  region  are,  for  the  most  part,  unas- 
certained and  practically  unascertainable  at  the  time  when 
any  particular  tax  is  imposed.  In  the  case  of  prospects,  and 
nearly  all  unproductive  mines,  this  unascertainability  is  well- 
nigh  absolute :  In  the  case  of  productive  mines  it  is  only  partly 
so,  due  to  the  fact  that  the  value  of  the  product  for  the  year 
or  other  period  for  which  the  tax  is  imposed  can  be  accurately 
ascertained.  And  this  difference  between  productive  and  non- 


350  PROCEEDINGS   O'P  AMERICAN   MINING   CONGRESS 

productive  mines  is  directly,  or  impliedly,  recognized  either 
by  statute  or  by  administrative  regulations  in  all  the  States  of 
our  region. 

Idaho,  Montana,  Utah  and  Wyoming  assess  unproductive  as 
well  as  productive  patented  claims  at  the  Government  price  of 
$5  per  acre ;  Nevada,  at  $500  per  claim,  in  the  absence  of  $100 
annual  expenditure ;  while  Colorado,  Arizona  and  New  Mexico 
attempt  to  assess  unproductive  claims  like  other  property; 
that  is,  upon  their  supposed  mineral  values.  In  the  last- 
named  State  the  assessed  valuation  was  originally  about  the 
Government  price  of  the  land;  but  it  has  been  increased,  and 
now  varies  in  different  counties  and  in  different  years,  accord- 
ing to  the  needs  for  revenue  or  the  whims  of  county  officials, 
from  $15  to  $50  per  acre  or  more. 

Patented  Locations  and  Productive  Mines  in  New  Mexico 

In  this  State,  out  of  more  than  40,000  recorded  locations, 
less  than  5  per  cent,  have  been  patented,  and  only  one-quarter 
of  1  per  cent,  are  productive  mines  today,  or  have  produced 
commercially  in  the  past  five  years.  I  do  not  know  how  far 
these  percentages  hold  good  in  the  other  States,  but  they  illus- 
trate conditions  with  which  we  are  all  familiar.  It  matters 
not  whether  the  value  of  these  claims  remains  undetermined, 
because  they  were  not  sufficiently  promising  to  interest  the 
capital  necessary  for  their  adequate  exploration  and  develop- 
ment; or  whether  the  necessary  capital  has  been  forthcoming 
and  their  worthlessness  has  been  demonstrated ;  or  whether  a 
rich  and  productive  mine  has  been  developed,  but  in  which 
production  has  ceased  owing  to  the  exhaustion  of  the  ore 
bodies,  or  to  one  of  those  many  casualties,  below  or  above 
ground,  to  which  the  mining  industry  is  subject.  In  all  these 
cases  they  have  never  realized  the  hopes  and  expectation  of 
their  owners,  or  they  have  ceased  to  realize  them.  They  are 
today,  from  an  economic  or  practical  business  viewpoint,  fail- 
ures. The  Supreme  Court  of  the  State  of  Washington  has 
said: 

"Mining  properties,  as  such,  have  no  market  value. 
The  value  lies  not  in  a  certainty  of  a  return  of  a  fair 
interest  or  income,  but  in  dreams  and  hopes.  They  are 
merely  tables  upon  which  cards  are  turned,  and  courts  are 
not  disposed  to  hold  that  a  prospect  which  was  the  sub- 
ject-matter of  a  contract  was  a  borrowing  asset." 


STATE   TAXATION    OF    METAL   MINES  351 

But  neither  do  dreams  and  hopes  or  a  gambler's  chance  con- 
stitute much  of  an  asset  for  taxation.  The  dreams  and  hopes 
of  the  owners  of  unproductive  mining  property  are  usually 
very  persistent,  but  unless  realized  they  fade  sooner  or  later, 
and  the  property  is  sold  for  taxes.  In  some  instances  I  have 
known  the  fortunate  purchaser  to  acquire  a  valid  title  to  a 
patented  claim  for  less  than  50  cents  per  acre,  but  whether  he 
ever  realized  upon  his  investment  is  another  story. 

On  the  whole  it  is  quite  evident  that  the  States  have  been 
realizing  by  taxation  about  all  that  they  could  reasonably 
expect  to  realize  upon  this  class  of  property,  and  that  the 
amount  has  been  comparatively  insignificant.  The  possible 
injustice  to  the  owners  owing  to  over-valuation  is  of  no  eco- 
nomic importance,  for  the  taxes  have  been  small  and  have  not 
contributed  to  the  failure. 

Productive  Mines  the  Fairest  to  Tax 

We  are  obliged  to  turn  to  productive  mines  as  the  only  ones 
from  which  the  State  can  derive  any  considerable  revenue, 
and  the  taxation  of  which  is  of  any  real  importance  to  the 
mining  industry.  The  number  of  these,  as  we  have  seen,  is 
quite  small.  It  is  evident  that  the  assessment  at  a  uniform 
valuation  per  acre,  even  at  the  highest  valuation  that  has  been 
attempted,  is  absurdly  inadequate  where  the  value  of  the  min- 
erals underlying  even  a  small  fraction  of  an  acre  is  being 
demonstrated  yearly  by  actual  production  running  into  the 
thousands  of  dollars.  Assessment  on  an  acreage  basis  is 
indeed  absurd,  for  the  adjoining  acres  are  usually  entirely  bar- 
ren, the  orebodies  commonly  underlying  only  a  very  small 
portion  of  the  surface  of  the  claim. 

But  the  difficulty  of  determining  the  value  or  extent  of  the 
ore  in  the  mine  still  remains.  Even  a  true  fissure  vein,  about 
which  the  old-timers  talked  so  much,  had  an  inconvenient  way 
of  petering  out.  Now,  in  many  of  the  large  producers,  the 
ore  bodies  are  not  situated  in  any  vein  or  lode,  but  are  irregu- 
larly distributed  throughout  certain  strata.  The  only  method 
of  adequate  exploration  is  by  the  slow  and  expensive  one  of 
underground  working.  This,  even  for  an  approximate  deter- 
mination of  the  entire  mineral  value,  is  very  expensive  and  is 
the  work  of  years.  The  opinion  of  experts  is  of  assistance  in 
suggesting  where  and  how  this  work  should  be  undertaken, 


352  PROCEEDINGS   OF  AMERICAN    MINING   CONGRESS 

but  is  not  a  substitute  for  it.  Nor  are  borings  of  much  assist- 
ance, except  in  the  rather  unusual  cases  of  large  surface 
deposits  or  of  comparatively  continuous  blanket  veins. 

Exploration  and  Production 

Theoretically,  it  would  seem  possible  to  complete  the  work 
of  exploration  before  incurring  the  large  expense  incident  to 
quantity  production.  But  from  a  business  viewpoint  this,  in 
most  cases,  is  not  possible.  Capital,  in  any  considerable 
amount,  cannot  be  tied  up  for  many  years  without  the  possi- 
bility of  dividends.  The  tendency  is  quite  the  other  way. 
Inexperienced  concerns,  with  a  view  to  early  dividends,  often 
incur  the  large  expense  necessary  for  commercial  production 
before  sufficient  ore  has  been  developed  or  the  proper  method 
of  treating  it  has  been  ascertained.  The  result  is  quite  uni- 
formly disastrous.  Companies  with  the  requisite  experience 
and  capital  rarely  make  such  a  mistake ;  but,  even  with  them, 
as  soon  as  the  existence  of  sufficient  ore  to  warrant  the 
expense  and  the  method  of  treating  it  has  been  ascertained, 
production  must  be  undertaken.  And  during  the  period  of 
production,  in  a  great  majority  of  cases,  exploration  and 
development  is  seldom  more  than  a  year  or  two  ahead  of 
extraction.  Beyond  this,  the  extent,  value,  or  even  the  exist- 
ence of  the  ore  bodies,  is  largely  problematical. 

Coal  veins  present  a  somewhat  different  aspect.  Given  an 
undisturbed  strata  of  considerable  extent,  it  is  possible,  by  a 
study  of  geological  conditions  and  by  borings,  to  determine 
with  approximate  accuracy  the  continuity,  thickness  and 
quality  of  the  vein.  But  such  ideal  conditions  are  rarely 
found  in  our  region.  The  coal  strata  are  more  or  less  irregu- 
lar, distorted  and  intercepted  by  dikes  and  faults,  and  occa- 
sionally the  coal  is  burned  out.  Under  such  conditions,  the 
designation  of  any  area  by  the  Geological  Survey  as  coal  land 
only  means  that  coal  may  be  reasonably  looked  for  there ;  not 
that  it  actually  exists  in  commercially  workable  quantity  or 
condition.  And  the  work  of  exploration  is  rendered  more 
costly,  and  at  the  same  time  less  effective. 

It  seems,  therefore,  that  mineral  values,  whether  contained 
in  ore  or  coal,  can  be  ascertained  with  the  requisite  degree  of 
certainty  only  when  and  as  they  are  produced,  and  that  is  the 
proper  time  to  tax  them. 


STATE  TAXATION  OF  METAL  MINES  353 

Tax  Systems  in  Western  States 

Idaho,  Montana,  Nevada,  Utah  and  Wyoming  pursue  this 
method  by  a  straight  tax  on  the  net  value  of  the  product  at 
the  same  rate  as  on  other  properties;  to  this  they  add  the 
Government  or  other  price  of  the  land  as  fixed  by  statute.  In 
Idaho  this  is  termed  a  tax  on  net  profits,  but  a  reading  of  the 
deductions  allowed  shows  that  it  is  essentially  a  tax  on  the 
net  product. 

New  Mexico  arrives  at  the  same  result  with  more  elaborate 
statutory  provisions,  dividing  all  mining  property  into  two 
classes  productive  and  non-productive,  and  in  the  case  of  pro- 
ductive mines  adding  the  surface  value  of  the  land.  It  is 
provided  also  that  the  tax  upon  the  net  value  of  output  each 
year  is  "in  lieu  of  the  assessable  value  of  the  mineral"  in  the 
mine,  and  the  taxes  are  made  a  lien  upon  the  mineral  land, 
just  as  taxes  assessed  upon  all  other  real  property.  But  it  is 
wholly  immaterial  whether  the  tax  is  viewed  as  merely  a  tax 
upon  the  product  or  a  tax  upon  mineral  values  in  the  mine, 
measured  and  determined  each  year  by  the  value  of  the  prod- 
ucts during  that  year. 

The  method  followed  in  these  six  States  is  the  one  I  am  con- 
tending for.  If  my  premises  are  correct,  and  the  mineral  can- 
not be  utilized  as  long  as  it  remains  in  and  forms  part  of  the 
land,  but  only  by  severing  it  from  the  land,  it  constitutes  at 
best  potential,  not  actual  wealth.  Until  it  becomes  the  subject 
of  human  use  and  enjoyment  it  does  not,  in  the  economic 
sense,  constitute  wealth  at  all.  It  is  not  perceived  why  it 
should  be  taxed  any  more  than  the  future  increases  of  the 
herds  of  the  stockmen;  of  the  two,  the  future  increase  can 
probably  be  counted  on  and  estimated  with  the  greater  degree 
of  certainty.  Then  there  is  the  practical  difficulty,  or  rather, 
in  most  cases,  the  impossibility  of  assessing  mineral  values 
with  even  approximate  certainty  while  they  remain  part  of 
the  land.  The  method  I  am  advocating  does  away  with  this 
uncertainty,  and  at  least  provides  a  way  by  which  the  value 
can  be  ascertained  with  almost  absolute  accuracy — something 
which  can  scarcely  be  said  of  the  assessment  of  other  kinds 
of  property  under  present  methods.  It  requires  the  mining 
industry  to  bear  its  fair  proportion  of  the  burden  of  taxation 
as  compared  with  other  industries,  while  at  the  same  time 


354  PROCEEDINGS  OF  AMERICAN   MINING   CONGRESS 

it  is  not  unduly  burdensome  to  the  miner,  as  it  requires  him 
to  pay  each  year  a  tax  proportionate  to  his  prosperity  and  to 
the  actual  wealth  produced. 

Results  in  New  Mexico 

Five  years'  experience  under  our  New  Mexico  Statute,  in 
spite  of  some  minor  defects  in  the  law  and  in  some  details  of 
administration,  confirms,  I  believe,  the  conclusion  at  which  I 
have  arrived.  Certainly  it  has  yielded  a  revenue  from  produc- 
tive mines  many  times  greater  than  was  ever  obtained  under 
our  old,  absurd  method  of  attempting  to  tax  them  upon  an 
acreage  basis.  • 

The  law  has,  nevertheless,  been  the  subject  of  much  con- 
troversy and  criticism,  and  was  one  of  the  local  issues  in  the 
late  political  campaign,  the  main  objection  urged  being  that 
although  these  mineral  values  remain  in  the  mine  year  after 
year  until  the  mineral  is  extracted,  they  are  taxed  but  once; 
that  they  should  be  taxed  every  year  like  all  other  real  prop- 
erty. We  have  considered  the  reasons  for  taxing  them  but 
once.  This  objection  has  been  strenuously  urged  against  our 
larger  coal  companies  which  own  many  thousands  of  acres  of 
coal,  or  supposedly  coal  lands,  lying  contiguous  to  but  outside 
of  the  areas  workable  through  their  present  openings.  It  is 
contended  that  these  contiguous,  but  at  present  non-workable 
coal  lands,  should  be  classified  and  taxed  as  non-productive 
mineral  lands.  From  an  economic  standpoint  this  contention 
is  invalid.  Suppose  all  the  coal  underlying  a  considerable  dis- 
trict could,  by  some  miracle,  be  brought  to  the  surface  and 
placed  on  cars  in  a  single  year ;  what  would  be  the  value  of  the 
immense  surplus  left  after  supplying  the  maximum  market 
demand,  bearing  in  mind  that  in  our  Western  country  markets 
are  quite  strictly  limited  by  the  cost  of  transportation?  It 
could  not  be  given  away,  as  no  one  would  be  willing  to  incur 
the  expense  of  hauling  it  off.  It  would  be  as  worthless  as  the 
dirt  alongside  of  the  track.  How  then  can  it  have  any  present 
value  if  it  be  left  in  the  ground?  Surely  the  cost  and  risk  of 
mining  does  not  give  it  any  value.  Estimates  as  to  the  time 
for  the  consumption  of  all  known  workable  coal  in  the  United 
States  vary  considerably,  but  the  shortest,  I  believe,  is  some- 
thing like  400  years.  At  present  the  entire  world  is  crying 
for  coal;  but  we  cannot  see  far  into  the  future.  Those  who 


STATE  TAXATION  OF  METAL  MINES  355 

ought  to  know  tell  us  that  within  the  next  few  decades  white 
coal,  wherever  it  can  be  made  available,  will  take  the  place  of 
the  black  diamond  variety  throughout  the  United  States  and 
throughout  the  world.  And  scientists  are  now  grouping  (not 
altogether  blindly  it  seems  to  me)  for  methods  to  harness  the 
sun's  rays  and  the  ocean's  tides,  and  to  tap  the  heat  stored  in 
the  earth,  all  for  a  like  purpose.  Who  can  say  that  unmined 
coal  will  have  any  value  50  or  100  years  hence?  If,  then,  it 
has  no  present  value,  and  there  is  no  certainty  that  it  ever  will 
have  any  value,  how  can  it  be  just  or  economically  wise  to 
attempt  to  tax  it? 

Gross  Value  Urged  as  Basis  for  Taxation 

It  is  also  urged  that  the  gross  rather  than  the  net  value  of 
the  product  should  be  taken  as  the  basis  of  taxation.  But  the 
value  of  the  ore  or  coal  in  the  mine  is  their  market-value  less 
the  cost  of  producing,  preparing  and  placing  it  upon  the  mar- 
ket. This  is  the  rule  that  has  always  been  applied  by  the 
courts  in  determining  the  value  of -a  crop  or  other  product. 
A  tax  upon  the  gross  value  would  operate  very  unequally, 
since  the  ratio  of  the  cost  of  production  to  gross  value  varies 
greatly  in  different  mines,  especially  metalliferous  mines,  and 
even  with  the  different  classes  of  ore  in  the  same  mine.  A 
mine,  for  instance,  in  which  the  necessary  costs  of  production 
are  90  per  cent,  of  the  gross  value,  leaving  net  value  of  10  per 
cent.,  would  be  taxed  nine  times  as  heavily  as  another  mine 
where  conditions  were  reversed  and  cost  of  production  was  10 
per  cent.,  leaving  net  value  of  90  per  cent.  A  tax  based  on 
gross  values  would  in  many  cases  operate  oppressibly,  and  in 
some  instances,  disastrously.  It  would  certainly  tend  to  pre- 
vent further  production  of  the  lowest  grades  of  ore  that  are 
now  being  produced. 

State  Participation  in  Mineral  Values  Urged 

Again  it  is  urged  that  since  mine  operators  are  depleting 
the  natural  resources  of  the  State — doing,  indeed,  what  neces- 
sarily must  be  done  to  render  mineral  values  available  at  all, 
and  convert  them  into  actual  wealth — such  values  should  be 
taxed  at  a  much  higher  rate  than  other  property;  in  effect, 
that  the  State,  under  the  guise  of  taxation,  should  appropriate 
a  considerable  share  of  these  mineral  values.  Such  a  course 


356  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

would  be  both  unwise  and  unjust.  Capital  cannot  be  induced 
to  engage  in  any  hazardous  business,  such  as  mining  undoubt- 
edly is,  unless  there  is  a  possibility,  at  least,  of  large  returns. 
Were  it  once  known  that,  if  the  venture  proved  successful,  the 
State  would  step  in  and  appropriate  a  considerable  portion  of 
these  returns,  the  mining  industry  would  begin  to  languish 
and  would  tend  ultimately  to  disappear,  and  the  State  would 
cease  to  derive  any  appreciable  revenue  from  it.  Unless  and 
until,  therefore,  the  State  is  itself  prepared  to  engage  in  the 
mining  business,  it  would  seem  that  it  must  be  content  to  take 
only  such  proportion  of  these  values  as  it  takes  from  other 
property.  In  other  words,  it  must  observe  the  rule  of  equality 
and  uniformity  in  taxation  prescribed  by  its  Constitution.  It 
must  be  borne  in  mind,  also,  that  the  States  never  owned  these 
mineral  values.  They  were  the  property  of  the  Federal  Gov- 
ernment and  were  granted  upon  conditions  prescribed  by  acts 
of  Congress,  designed  to  promote  the  mining  industry  in  the 
Western  States  and  Territories.  By  compliance  with  these 
conditions  they  have  become  the  property  of  the  present 
owners.  The  State  has  never  had  any  proprietary  interest  in 
them.  Its  interest  in  and  control  over  them  is  that  of  a  sov- 
ereign only.  It  has  neither  the  moral  nor  the  legal  right  to 
confiscate  these  values  under  the  guise  of  taxation. 

Tax  Assessments  in  Colorado 

In  Colorado,  producing  mines  of  coal,  iron,  asphaltum  and 
quarries  are  attempted  to  be  assessed  in  the  same  manner  as 
other  property.  Presumably  this  is  because  their  mineral 
values  are  more  nearly  susceptible  of  ascertainment  than  those 
of  gold,  silver  and  other  valuable  metals  or  minerals.  The  lat- 
ter are  valued  for  taxation  at  one-fourth  of  their  gross  pro- 
duction, unless  their  net  output  exceeds  one-fourth,  in  which 
case  the  net  is  taken.  This  provision  seems  to  be  based  upon 
the  proposition  that  the  cost  of  production  ought  never  to 
exceed  three-fourths  of  the  gross.  There  would  seem  to  be 
no  warrant  for  indulging  in  any  such  assumption. 

In  Arizona,  the  State  Tax  Commission,  under  the  broad  but 
somewhat  vague  powers  vested  in  it  by  the  Constituton  or 
statute,  has  undertaken  to  divide  producing  mines  into  no  less 
than  eight  classes  and  two  sub-divisions ;  and  it  then  capitalizes 
the  net  earnings  of  each  class  upon  a  percentage  basis  ranging 


STATE  TAXATION  OF  METAL  MINES  357 

from  20  to  33%  per  cent,  for  the  purpose  of  determining 
mineral  values.  This  method  seems  to  be  not  only  cumber- 
some, but  arbitrary  and  unjust.  It  certainly  taxes  the  mineral 
values  remaining  in  the  mine,  upon  the  assumption  that  such 
values  in  each  class  and  sub-division  bear  a  fixed  proportion 
to  the  net  production.  Such  an  assumption  cannot  be  true  in 
the  case  of  many  mines  of  any  class  and  is  probably  true  of 
none. 

It  would  seem  that  Colorado  and  Arizona,  while  they  have 
adopted  partly,  at  least,  the  method  of  determining  mineral 
values  from  production  for  the  purpose  of  taxation,  have  not 
done  so  as  fully  and  as  logically  as  have  their  sister  States. 


358  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


THE  ADMINISTRATION  OF  LAW  AFFECTING  THE  MINING 

INDUSTRY 

By  EDWARD  C.  FINNEY,  Board  of  Appeals,  Department  of  the  Interior, 

Washington,  D.  C. 

The  existing  mining  laws  of  the  United  States  as  applicable 
to  mineral  deposits  in  the  public  lands  and  reservations  may 
be  divided  into  two  classes : 

Existing  Mining  Laws 

1.  The  general  mining  law,  so  called,  which  has  been  in 
force  for  more  than  40  years,  and  under  which  the  prospector 
or  discoverer  of  mineral  deposits,  by  making  location,  per- 
formance of  a  specified  amount  of  development  work,  and 
payment  of  a  nominal  price  per  acre  for  the  land  containing 
the  deposits,  receives  a  patent  in  fee  simple  from  the  United 
States  for  the  lands  or  deposits.    These  laws  still  govern  the 
acquisition  of  public  lands  containing  mineral  deposits  rang- 
ing from  gold  to  building  stone,  and  are  administered  by  the 
Department  of  the  Interior  through  the  General  Land  Office 
and  94  local  land  offices  scattered  throughout  the  public-land 
area. 

2.  The  so-called  leasing  laws,  applicable  to  various  deposits 
in  the  public  lands  and  reservations,  and  covering  deposits  of 
oil,  gas,  coal,  phosphate,  sodium  and  potash. 

There  is  also  a  leasing  law  governing  the  development  of 
metalliferous  minerals  in  Indian  reservations  in  certain 
Western  States.  The  leasing  laws  generally  provide  for  the 
issuance  of  a  lease  or  leases  to  citizens  of  the  United  States, 
associations  of  such  citizens,  or  to  corporations  organized  under 
the  laws  of  the  United  States  or  one  of  the  States,  of  known 
or  proved  lands  or  deposits ;  and  are  designed  to  encourage  the 
search  for  deposits  not  known  to  exist  through  prospecting 
by  granting  prospecting  permits,  giving  to  the  permittee  the 
exclusive  right  of  possession  for  a  limited  period  of  areas 
within  which  he  desires  to  explore  for  minerals,  his  reward 
for  discovery  being  a  lease  for  all  or  part  of  the  lands  or 
deposits. 


ADMINISTRATION  OF  MINING  LAW  359 

With  the  exception  of  the  metalliferous  mining  leases 
authorized  in  Indian  reservations,  the  line  of  demarcation 
between  the  laws  which  permit  of  the  acquisition  of  fee-simple 
title  and  those  which  extend  a  leasehold  only  may  be  stated  as 
follows:  Mineral  deposits  producing  fuels  and  fertilizers  are 
now  disposed  of  under  a  leasing  system.  Other  minerals  are 
disposed  of  under  the  old  mining  laws,  or  the  fee-simple  title 
system. 

Time  will  not  permit  of  an  extended  statement  of  the 
reasons,  but  in  passing  it  may  be  said  that  the  old  laws  were 
not  adapted  either  to  protect  the  prospector  during  explora- 
tion or  to  secure  the  best  development  of  the  fuels  and  fertil- 
izer minerals.  On  the  other  hand,  up  to  the  present  time  it 
has  been  the  general  view  that  the  search  for  and  development 
of  the  precious  metals  and  of  the  minerals  other  than  those 
covered  by  the  leasing  law  would  be  best  secured  under  the 
old  form  of  location  and  patent. 

Departmental  Organizations 

The  Department  of  the  Interior  touches  and  deals  with  the 
mining  industry  primarily  through  three  of  its  Bureaus:  the 
Geological  Survey,  the  General  Land  Office,  and  the  Bureau 
of  Mines.  The  Geological  Survey  deals  with  topographical 
and  geological  surveys  of  the  country,  with  the  classification 
of  lands,  the  collection  of  mineral  statistics,  and  its  records 
and  reports  are  constantly  consulted  by  those  engaged  in  ex- 
ploration for  and  development  of  our  minerals.  The  General 
Land  Office,  under  the  Secretary  of  the  Interior,  deals  with  the 
disposition  of  the  public  lands  and  resources  through  patent 
or  lease,  investigates  the  various  claims  presented,  passes 
upon  controversies  arising  between  claimants,  and  collects  the 
purchase  moneys  or  royalties  derived  from  the  lands  sold  or 
leased.  The  function  of  the  Bureau  of  Mines  is  largely  to  deal 
with  the  mine;  that  is,  to  study  and  suggest  mining  methods; 
to  prevent  waste,  to  look  out  for  the  safety  and  welfare  of 
mines  and  miners,  and  to,  in  every  way  possible,  foster,  en- 
courage and  advance  the  mining  industry. 

In  the  execution  of  the  general  mining  or  patent  laws,  the 
Geological  Survey  aids  by  classification  and  expert  advice,  but 
the  principal  work  of  disposition  is  through  the  General  Land 
Office.  Applications  for  patent  are  filed  in  the  local  land  office 


360  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

of  the  district  where  the  lands  or  deposits  are  located,  and 
after  notice  arid  other  required  preliminary  proceedings  are 
transmitted  to  the  General  Land  Office  for  examination  and 
disposition.  If  found  regular  and  free  from  contest,  patent 
issues  to  the  applicant,  and  the  function  of  the  Interior  Depart- 
ment ceases,  except  as  it  may,  through  the  Bureau  of  Mines, 
aid  the  mine  operator  in  his  work. 

The  leasing  laws  being  of  comparatively  recent  date,  the 
practice  is  perhaps  not  so  well  defined  or  known;  but  the 
Department  will  deal  with  permits  and  leases  to  a  greater  or 
less  extent  through  all  three  of  the  Bureaus  named.  Applica- 
tions for  prospecting  permits  and  leases,  like  applications  for 
patent,  are  filed  in  the  local  land  office  of  the  district,  thence 
forwarded  to  the  Commissioner  of  the  General  Land  Office. 
If  in  proper  shape  and  free  from  conflict,  a  recommendation 
is  made  to  the  Secretary  of  the  Interior  for  the  issuance  of  the 
permit  or  lease.  If  conflicts  or  controversies  arise,  decision  is 
rendered  by  the  Commissioner,  from  which  an  appeal  may  be 
taken  by  the  aggrieved  party  to  the  Secretary  of  the  Interior. 

The  Department  has  a  keen  appreciation  of  the  importance 
of  prompt  action  in  these  matters,  particularly  in  dealing  with 
such  substances  as  oil,  gas,  and  coal,  and  has  endeavored,  so 
far  as  its  limited  force  would  permit,  to  expedite  action  thereon 
in  every  way.  It  realizes  that  the  operator  who  is  seeking  to 
develop  our  mineral  resources  looks  upon  time  with  an  oppo- 
site view  from  that  of  the  hog  in  Secretary  Payne's  story.  A 
Yankee  was  traveling  through  North  Carolina  arid  observed  a 
lank  razorback  near  a  mountaineer's  cabin.  How  old  is  that 
hog,  he  asked  the  native?  Two  years  old.  My  friend,  do  you 
know  that  if  you  had  a  Poland  China  or  Berkshire  hog  he 
would  have  been  twice  the  size  of  that  razorback  in  two  years  ? 
The  native  replied,  "Well,  that  may  be,  stranger,  but  what's 
time  to  a  hog?" 

Owing  to  the  wide  demand  for  oil,  gas,  and  coal  prospecting 
permits,  and  to  the  fact  that  relief  leases  under  the  oil  and 
gas  act  had  to  be  filed  before  August  25,  1920,  the  Department 
is  now  struggling  with  7500  applications  for  permits,  and  a 
large  number  of  applications  for  leases,  but  every  effort  is 
being  made  to  expedite  action  and  to  put  the  applicants  in  a 
position  where  they  may  begin  prospecting  or  production. 


ADMINISTRATION  OF  MINING  LAW  361 

The  Geological  Survey  has,  in  this  connection,  the  duty  of 
advising  as  to  the  character  of  lands  sought,  so  far  as  dis- 
closed by  geologic  conditions  and  developments,  and  as  under 
the  oil  and  gas  leasing  law  the  geologic  structure  of  producing 
oil  or  gas  fields  is  required  to  be  defined,  is  charged  with  the 
duty,  subject  to  the  approval  of  the  Secretary,  of  designating 
such  areas  throughout  the  public-land  States.  When  permits 
or  leases  have  been  issued  and  exploratory  or  development 
work  begun,  the  operations  are  supervised  and  the  lessees 
advised  and  helped  by  the  field  and  office  force  of  the  Bureau 
of  Mines,  a  bureau  particularly  fitted  to  be  of  service  to  the 
operators  and  to  the  public  in  this  field.  Supervisors  and 
deputy  supervisors  are  appointed  to  act  for  the  Secretary  of 
the  Interior  in  the  field  and  are  required  to  visit,  inspect,  and 
supervise  operations  with  a  view  to  preventing  waste  and  to 
aid,  if  possible,  in  the  economic  development  of  the  deposits. 
It  is  confidently  expected  that  the  work  will  be  carried  on  with 
the  hearty  co-operation  of  the  operators  and  of  the  State  min- 
ing bureaus.  In  fact,  much  assistance  has  already  been  had 
from  those  sources,  and  such  co-operation  cannot  fail  to  be  of 
mutual  benefit. 

Laws  Designed  to  Prevent  Holding  Lands  and  Deposits  Idle 

The  general  mining  laws  required  work  to  be  done  upon 
each  location  annually  and  authorized  re-location  by  others  as 
a  penalty  for  the  failure  to  perform  such  work.  The  leasing 
laws  continue  this  policy  and  extend  it.  They  require  a  spe- 
cific amount  of  work  to  be  done  each  year  until  discovery, 
authorize  the  Secretary  to  insert  conditions  in  leases  issued 
after  discovery  to  insure  the  reasonably  continuous  extraction 
of  the  minerals;  also  to  distribute  opportunity  as  far  as 
possible  and  prevent  monopoly.  The  leasing  laws  contain 
restrictions  upon  the  areas  that  may  be  held  by  a  single  indi- 
vidual or  corporation.  In  the  case  of  oil  or  gas,  but  one 
lease  may  be  held  within- the  geologic  structure  of  the  same 
producing  field,  and  not  more  than  three  leases  at  any  one 
time  in  the  same  State.  Not  more  than  one  coal,  phosphate 
or  sodium  lease  may  be  held  in  the  same  State.  But  one  potash 
lease  may  be  had  in  any  area  50  miles  square.  In  the  case  of 
coal,  provision  is  made  for  acquiring  additional  coal  areas 
as  the  coal  deposits  in  the  leasehold  are  worked  out. 


3(32  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

The  prospecting  features  of  the  leasing  act  as  to  oil  and  gas 
give  the  prospector  an  exclusive  right  in  the  United  States  to 
prospect  for  two  years  upon  the  land  covered  by  his  permit, 
but  require  that  he  shall  begin  drilling  operations  within  six 
months  and  do  a  specified  amount  of  drilling  annually.  In  the 
case  of  coal  prospecting,  permits  will  be  issued  for  such  unde- 
veloped lands  as  require  prospecting  or  exploratory  work  to 
determine  the  existence  or  workability  of  the  deposits.  These 
permits  also  run  for  two  years.  Permittees  are,  by  the  regu- 
lations, required  to  begin  work  within  90  days  from  issuance 
of  the  permit,  and  to  continue  such  work  with  diligence. 

Changes  in  the  Mining  Laws 

The  general  mining  laws  as  applied  to  the  substances  not 
covered  by  the  leasing  act  have  worked  very  well.  Their  pro- 
visions are  so  well  known  to  the  prospector,  and  so  many  of 
the  doubtful  legal  points  have  been  settled  by  decisions  of  the 
courts  and  of  the  Department,  that  it  is  my  opinion  that  no 
radical  changes  in  those  laws  should  be  made.  Improvements 
and  modifications  could,  however,  be  profitably  made.  Those 
laws  require  the  actual  discovery  of  mineral  as  a  pre-requisite 
to  valid  location.  In  case  of  deep-seated  deposits  covered 
by  non-mineral  material  this  is  practically  impossible,  and 
a  law  which  would  give  the  prospector  the  exclusive  right  to 
a  limited  area  for  a  reasonable  period  of  prospecting,  with  the 
right  to  a  patent  after  discovery,  would  encourage  the  search 
for  and  development  of  this  class  of  mineral  deposits.  I  be- 
lieve it  would  be  a  good  thing  for  the  prospector  as  well  as  for 
the  Government  if  the  law  could  be  changed  to  require  the 
recording  of  location  notices  in  the  district  local  land  offices, 
possibly  with  the  additional  requirement  that  application  for 
patent  should  be  made  within  five  or  seven  years.  At  present 
these  notices  are  recorded  in  the  county  records,  and  the  land 
officials  and  those  who  consult  the  land-office  records  with  a 
view  to  entering  lands  have  no  notice  thereof.  It  sometimes 
results  in  the  patenting,  under  other  laws,  of  lands  which 
include  valid  mining  locations. 

Policy  Should  Be  to  Encourage  Mining 

The  mining  law  of  1872  was  entitled,  "An  Act  to  promote 
the  development  of  the  mining  resources  of  the  United  States." 


ADMINISTRATION  OF  MINING  LAW  363 

The  general  Leasing  Act  of  February  25,1920,  bears  a  like  title. 
The  provisions  of  the  various  laws  show  that  Congress  in- 
tended that  this  important  industry  should  receive  encourage- 
ment. In  my  opinion,  the  administration  of  all  of  these  laws 
should  be  both  reasonable  and  liberal.  Any  doubt  should  be 
resolved  in  favor  of  the  miner.  Requirements  made  upon  him 
in  connection  with  the  acquisition  of  a  patent  or  lease,  or  in 
connection  with  the  operation  of  the  mine,  should  be  reason- 
able, and  no  unnecessary  or  hampering  restrictions  placed 
upon  his  royalties  under  the  leasing  act  should  be  fair  and 
moderate.  The  exaction  of  unreasonable  royalties  would  de- 
feat the  very  purpose  of  the  statute  by  discouraging  explora- 
tion and  production.  The  risks  and  uncertainties  connected 
with  prospecting  and  mining  are  so  great  that  those  who  are 
successful  in  discovering  mineral  should  not  be  denied  their 
reward.  The  uninformed,  hearing  of  the  occasional  great 
fortunes  that  have  been  made  in  mining,  are  apt  to  be  like  the 
Irishman  who  landed  in  New  York,  and  on  his  way  up  the 
street  from  the  pier  found  a  $20  gold  piece.  As  soon  as  he 
could  get  pen,  ink  and  paper  he  wrote  to  his  relatives  in  Ire- 
land to  come  to  America,  because  it  was  a  place  where  you  did 
not  have  to  work  for  money,  but  could  pick  it  up  off  the  street. 
Moreover,  unnecessary  burdens  placed  upon  the  producer 
are  quite  likely  to  be  passed  on  to  the  consumer  in  the  form  of 
higher  prices  for  the  product  of  the  mines.  Shortage  of  fuels 
and  other  needed  minerals  can  best  be  averted  and  the  supply 
for  the  public  at  reasonable  prices  secured  by  stimulating  pro- 
duction, and  that  can  and  should  be  brought  about  by  a  liberal 
administration  of  the  law  and  fair  treatment  of  the  mining 
operators. 

Prevention  of  Waste — Important  Methods  of  Mining  and  Reduction 

It  is  sensible  and  right  that  none  of  our  resources  shall  be 
wasted,  and  this  is  particularly  true  of  limited  and  exhaustible 
minerals,  such  as  oil,  gas  and  coal,  and  to  this  end  it  is  the 
duty  of  the  Department  to  prevent  waste  and  to  encourage 
better  methods  of  mining,  handling  and  reduction.  His  in- 
terest will  ordinarily  prompt  the  producer  to  take  care  of  his 
mineral  product,  but  experience  has  shown  that  ignorance  of 
methods,  lack  of  facilities  or  a  desire  to  take  the  cream  and 
leave  the  milk  has,  in  many  cases,  resulted  in  a  waste  of 


364  PROCEEDINGS  OF  AMERICAN   MINING  CONGRESS 

material  that  should  have  been  saved  and  utilized.  In  this 
work  of  discovering  and  putting  into  effect  improved  methods, 
the  American  Mining  Congress  and  the  operators  can  perform 
a  valuable  service  in  aiding  the  Department,  with  resultant 
bentfit  to  themselves  as  well  as  the  nation. 

Constructive  Suggestions  Welcome 

Captious  criticism  and  petty  fault-finding  are  of  no  benefit 
to  the  Department,  the  public  or  .the  operators.  Constructive 
suggestions  or  criticisms  cannot  fail  to  be  of  advantage  to  all 
concerned,  and  will  greatly  aid  the  Department  in  its  adminis- 
tration of  the  mining  laws. 

American  Mining  Congress  Service  to  Mining 

The  American  Mining  Congress  occupies  a  peculiarly  favor- 
able position  to  be  of  service  both  to  the  Government  and  the 
mine  operators.  Its  organization  permits  it  to  gather  infor- 
mation promptly  from  the  entire  mining  area,  to  use  that 
information  for  the  general  good,  to  thresh  out  and  harmonize 
differences  of  opinion,  and  to  render  a  real  and  lasting  service 
to  the  people. 

On  the  occasion  of  its  twenty-third  annual  convention  it 
merits  and  receives  our  esteem  and  congratulations. 


WHAT  THE  BUREAU   OF  MINES   IS  DOING  365 


THE  BUREAU  OF  MINES  AND  THE  INDUSTRY 

By  F.   G.   COTTRELL 

Director  (until  end  of  1920).  U.  S.  Bureau  of  Mines,  Washington. 

The  Bureau  of  Mines  has  now  been  in  existence  for  ten 
years.  This  seems  an  opportune  time  and  place  to  take  account 
of  stock ;  to  look  over  the  ground  already  covered,  and  to  note 
the  direction  in  which  we  are  headed.  It  is  right,  also,  to  give 
to  the  mining  and  to  the  general  public  an  accounting  for  the 
moneys  spent,  and  to  gain  from  them  ideas  and  suggestions  as 
to  how,  within  our  funds  and  organic  powers,  present  and 
probable  future  needs  can  best  be  met. 

Briefly,  the  Bureau  receives  from  Congress  for  the  present 
fiscal  year  a  total  of  $1,302,000.  Of  this,  $77,000,  or  approxi- 
mately 6  per  cent.,  is  spent  for  general  operating  charges 
including  the  salaries  and  expenses  of  the  administrative 
officials,  clerks,  accountants  and  other  necessary  overhead 
expenses.  This  compares  favorably  with  the  percentage  for 
overhead  found  in  commercial  corporations. 

Mine-Rescue  Cars  and  Stations 

One  of  the  oldest  and  perhaps  the  best-known  division  of 
the  Bureau's  work  is  that  of  the  Mine-Rescue  Cars  and  Sta- 
tions. Briefly,  the  Bureau  operates  and  maintains  ten  mine- 
rescue  railroad  cars,  which,  with  personnel,  travel  from  mine 
to  mine  in  the  different  mining  districts,  giving  training  in 
first-aid  and  mine-rescue  work,  and  assisting  in  times  of  mine 
disasters  and  fires.  In  addition,  there  are  eight  fixed  mine- 
rescue  stations,  seven  of  which  are  equipped  with  motor  mine- 
rescue  trucks  available  as  in  the  case  of  the  cars.  This  service 
to  the  mines  and  miners  has  been  a  real  and  a  paying  one, 
counted  only  in  the  number  of  lives  and  in  the  value  of  prop- 
erty saved.  Its  by-products  have  been  an  awakened  sense  of 
responsibility  of  miners  and  operators  alike,  resulting  in  a 
decided  decrease  in  the  miner  of  non-fatal  as  well  as  fatal 
accidents. 

The  allotment  for  this  mine  car  and  station  work  is  about 
$240,000  per  year,  or  18  per  cent,  of  our  funds.    This  sum  is 


366  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

arrived  at  by  taking  $126,000  of  the  Congressional  appropria- 
tioiTof  $155,000  for  operating  mine-rescue  cars  and  combin- 
ing with  this  $112,000  from  the  mine  accident  appropriation. 

Mine  Accidents  Investigations 

The  largest  single  allotment  of  the  Bureau  is  for  the  so- 
called  Mine  Accidents  Investigations,  amounting  to  $409,065, 
or  about  31  per  cent,  of  the  total.  As  noted  above,  $112,000  of 
this  is  used  through  mine  rescue  cars  and  stations,  leaving 
$297,065,  or  23  per  cent.,  of  our  yearly  moneys  for  other  pro- 
visions of  the  appropriation.  It  has  been  inferred  by  some 
that  the  Bureau  expends  this  much  money  for  the  purpose  of 
simply  gathering  facts  and  statistics  on  accidents  as  they 
occur  in  the  industry.  As  a  matter  of  fact,  the  term 
mine  accidents  is  an  abbreviated  title  for  an  appropriation 
that  is  used,  not  only  to  collect  mine-accident  statistics  and 
investigate  mine  accidents,  but  "for  investigations  as  to  the 
cause  of  mine  explosions,  methods  of  mining,  especially  in 
relation  to  the  safety  of  miners ;  the  appliances  best  adapted 
to  prevent  accidents,  the  possible  improvement  of  conditions 
under  which  mining  operations  are  carried  on,  the  use  of 
explosives  and  electricity,  the  prevention  of  accidents,  and 
other  inquiries  and  technologic  investigations  pertinent  to  the 
mining  industry" ;  and  this  covers,  as  does  the  Rescue  Car  and 
Station  appropriation,  both  the  coal  and  metal  mining  indus- 
tries. Thus,  out  of  this  fund  come  the  expenses  for  testing 
and  research  studies  of  explosives;  the  use  of  electricity  and 
mechanical  appliances  underground;  ventilation;  coal  and 
metal  mine  dusts  and  their  relation  to  the  health  and  safety  of 
the  miners ;  the  operation  and  maintenance  of  the  15  Bureau 
schedules  of  approval  for  explosives  and  safe  equipment  under- 
ground, and  the  extensive  field  and  experimental  mine  investi- 
gations relating  to  the  prevention  of  explosions  from  coal  dust 
and  gas.  In  short,  this  appropriation  supports  the  basic 
investigations  which  bear  not  only  on  the  fundamental  prob- 
lems pertaining  to  the  improvement  of  health  and  safety 
conditions  in  the  whole  mineral  industry,  but  have  also  the 
widest  economic  significance. 


WHAT  THE  BUREAU  OF  MINES   IS  DOING  367 

Safety  First  and  its  Economic  Aspect 

Thus,  although  the  appropriation  for  Mine-Rescue  Cars 
and  Stations,  and  for  Mine  Accidents,  together  totalling  about 
43  per  cent,  of  our  appropriations,  had  "Safety  First"  as  their 
original  inception,  in  reality  they  cover  a  wide  range  of  eco- 
nomic interest  as  well. 

The  records  show  that  in  the  beginning  the  American  Min- 
ing Congress  was  vitally  interested  in,  and,  as  an  organization, 
helped  very  prominently  in  the  creation  of  the  Bureau.  From 
its  continued  co-operation,  I  am  led  to  believe  the  results  have 
been  reasonably  successful  and  at  least  encouraging. 

The  movement  for  safety  in  the  mines  is  rapidly  outgrowing 
its  original  position  as  something  quite  apart  from  operating 
management,  and,  in  fact,  often  in  conflict  with  it,  to  be  used 
only  when  sentiment  dictated;  rather,  it  is  proving  itself 
closely  interwoven  in  the  economic  structure  of  mining,  a  part 
of  every  drift,  every  machine,  and  every  man's  work,  and,  best 
of  all,  it  is  furnishing  a  common  meeting  ground  and  common 
direction  of  humanitarian  effort  for  the  miner,  the  operator, 
the  Government  and  the  public. 

The  mine-rescue  and  first-aid  training  work  will  be  con- 
tinued with  the  principle  in  mind  that  the  Bureau  organization 
acts  as  a  teacher  and  standardizer,  not  to  take  the  place  of 
self -preparedness  and  self-help  on  the  part  of  the  individual 
mine  in  time  of  disaster  or  fire,  but  rather  to  help  organize, 
encourage  and  train  local  men  and  companies  to  help  them- 
selves. However,  that  part  of  our  safety  work  which  deals 
with  investigations  of  safe  and  dangerous  practices,  develop- 
ment, use  and  approval  of  underground  explosives,  ventilation 
methods,  mechanical  and  electrical  appliances,  and  health  and 
working  conditions  of  the  miner  must  grow  in  proportion  to 
the  growth  of  the  industry  and  the  use  of  more  complicated 
machinery  and  appliances. 

Technologic  Investigations 

The  Bureau  received  last  year  $125,000,  or  10  per  cent,  of 
its  appropriation,  for  "inquiries  and  scientific  and  technologic 
investigations  concerning  the  mining,  preparation,  treatment 
and  utilization  of  ores  and  other  mineral  substances,  with  a 
view  to  improving  health  conditions  and  increasing  safety, 


&68  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

efficiency,  economic  development,  and  conserving  resources 
through  the  prevention  of  waste  in  the  mining,  quarrying, 
metallurgical  and  other  industries."  This  is  a  field  so  broad 
that  it  recognizes  the  need  for  economic  work  in  the  whole  of 
mineral  mining  —  metallic  and  non-metallic  —  ore-dressing, 
metallurgical,  and  inorganic  chemical  and  alloy  fields.  In  com- 
mercial work  this  field  today  employs  many  thousands  of  min- 
ing engineers,  metallurgists  and  chemists.  Its  locale  is 
nation-wide,  its  field  is  the  whole  of  industry,  and  in  its  inten- 
sive development  we  see  as  a  parallel  the  basis  which  made 
modern  industrial  Germany  possible.  A  considerable  number 
of  the  larger  metallurgical  and  chemical  companies  in  the 
United  States  each  spend  yearly  for  research  on  their  own 
particular  problems  considerably  larger  sums  than  the  yearly 
appropriation  of  the  Bureau  for  corresponding  work  which  is 
expected  to  reach  and  benefit  the  whole  industry. 

It  is  evident  that  with  its  present  resources  the  Bureau  will 
be  doing  well  if  it  can  influence  and  benefit  even  a  smaller 
number  of  the  many  problems  whose  solution  would  build  up 
the  industry.  Frankly,  the  Bureau  takes  this  attitude :  Work 
likely  soon  to  be  successfully  undertaken  by  private  labora- 
tories is  left  untouched  unless  there  is  some  special  reason 
why  work  by  the  Bureau  itself  would  be  of  probable  general 
benefit  to  the  whole  industry.  On  the  other  hand,  there  is  a 
great  deal  of  fundamental  research  that  can  most  properly 
and  efficiently  be  undertaken,  either  by  the  Bureau  itself  or 
through  co-operation  between  it  and  the  industrial  concerns, 
either  individually,  or,  best  of  all,  in  groups  or  associations. 
Any  industry  advances  in  direct  proportion  as  the  amount  and 
quality  of  the  new  fundamental  information  is  put  at  the  dis- 
posal of  the  whole  industry.  Excessively  secretive  industries 
do  not  develop  to  their  full  possibilities.  Considerable  good  is 
coming  and  will  continue  to  come  from  the  Bureau  as  a  non- 
partisan  body,  putting  at  the  disposal  of  the  industry  facts 
and  data  discovered  or  compiled  under  its  direction. 

Moreover,  there  is  a  growing  recognition  of  the  number  of 
research  problems,  the  solution  of  which  would  benefit  the 
whole  industry  to  a  marked  degree,  yet  the  value  of  which,  to 
an  individual  concern,  is  not  great  enough  to  justify  commer- 
cially the  expense  involved.  This  is  a  vast  and  proper  field  in 
which  the  Bureau  may  grow.  Familiar  examples  are  the 


WHAT  THE  BUREAU  OF  MINES  is  DOING  369 

Bureau's  work  in  radium  and  the  rare  metals  on  the  one  hand, 
and  with  the  household  and  small  plant  fuel  on  the  other. 

Patents 

We  hear  much  today  about  the  economic  aspects  of  mining, 
of  the  business  problems  of  mining,  treating  and  selling  min- 
erals as  apart  from  the  problems  of  pure  technology.  During 
the  war  the  Bureau  instituted  a  service  that  frequently 
placed  before  the  Government,  the  producers,  the  consumers, 
and  the  interested  public,  reports  and  information  as  to  a 
particular  metal;  the  developments  in  mines  and  mining  dis- 
tricts producing  it ;  and  as  to  supplies  available,  conditions  of 
markets  and  conditions  from  a  world- wide  point  of  view  of  its 
political  and  commercial  control.  That  this  work  rendered 
service  is  attested  by  the  attention  it  received.  However,  it 
was  necessary  to  discontinue  this  at  the  close  of  the  war.  I 
hope  that  before  long  the  Bureau  can  again  undertake  at  least 
certain  features  of  this  work,  combining  these  necessary  engi- 
neering and  business  factors  from  a  non-partisan  viewpoint. 
This  is  one  of  the  possible  fields  for  the  Bureau's  activity  which 
borders  most  closely  upon  that  of  other  bureaus  in  the  Gov- 
ernment.  service,  and  where  cordial  co-operation  and  intelli- 
gent and  friendly  delimitation  of  functions  to  the  end  of 
maximum  public  service  and  minimum  of  unnecessary  duplica- 
tion must  be  most  earnestly  striven  for. 

Non-Metallics  and  Chemistry 

We  have  also  to  consider  the  research  in  and  aid  to  the  non- 
metallic  and  chemical  industry's  field.  The  public  generally 
does  not  recognize  that  the  stupendous  and  nation-wide 
programs  of  building  and  highway  construction  rest  on  an 
adequate  production  of  building  stone,  road  materials  and,  in 
general,  vast  quantities  of  non-metallic  minerals  and  mineral 
products.  It  is  estimated  that  the  non-metallic  mineral 
requirements  for  1920  for  construction  alone  will  exceed 
$400,000,000.  To  obtain  a  greater  variety  of  products  and 
better  grades  of  materials  by  more  economical  methods  than 
are  now  in  use,  the  Bureau  has  planned  a  program  which  in- 
cludes the  following  specific  problems : 

1.     Dissemination  of  information  as  to  the  most  efficient 


370  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

methods  and  equipment  in  the  sand,  gravel  and  crushed  stone 
industries. 

2.  Aid  the  talc  and  soapstone  industries  in  improving  pres- 
ent practice  and  finding  use  and  markets  for  the  off -color  and 
impure  talc  now  wasted  in  this  country,  but  utilized  abroad. 

3.  In  the  slate  industry,  encouraging  the  manufacture  of  a 
greater  variety  of  products  at  the  individual  plant,  and  better 
utilization  of  the  waste.    Important  branches  of  the  slate  in- 
dustry have  requested  the  Bureau  to  assist  in  these  problems. 

And  again,  problems  similar  to  these  exist  in  the  glass  sand 
industries,  and  in  the  limestone,  mineral  pigment,  gypsum, 
and  in  the  granite  industries. 

The  phenomenal  growth  and  importance  of  the  chemical 
industries,  involving  the  use  of  coal  and  mineral  products,  has 
been  generally  recognized  and  commented  on.  When  the  war 
shut  off  the  chemical  and  chemical  manufacturers'  imports, 
the  chemists  of  this  country  came  forward  and  within  a  few 
years  were  able  to  establish  chemical  industries  of  a  magni- 
tude not  incomparable  with  those  which  it  had  taken  Germany 
many  years  to  build  up.  Many  of  these  industries,  especially 
the  smaller  ones,  will  not  be  able  to  compete  under  peace-time 
conditions  without  some  form  of  assistance.  It  should  not  be 
forgotten  that  most  of  the  chemical  industries  depend  for 
existence  on  the  marketing  of  their  by-products.  In  the  study 
of  this  problem,  and  in  encouraging  and  developing,  especially 
in  the  smaller  units,  lies  a  very  worth-while  field  of  service  for 
the  Bureau.  It  should  be  the  policy  of  the  Government  to  aid 
these  industries  by  fundamental  research,  as  this  is  a  service 
that  would  be  not  only  of  direct  aid  toward  solving  specific 
problems,  but  would  incidentally  furnish  a  broad  general  train- 
ing to  the  personnel  who  gradually  sift  out  into  the  industry, 
and  in  the  dissemination  of  information  would  repay  tenfold 
the  money  invested. 

Alloys 

Again,  the  possibilities  of  help  in  the  alloys  field  are  almost 
without  limit.  Metallurgists  even  claim  that  industrially  we 
are  just  now  entering  into  the  age  of  alloys.  At  any  rate,  the 
technology  of  this  field  is  developing  at  an  astonishing  rate, 
and  the  results  of  our  previous  small  expenditures  along  this 


WHAT  THE  BUREAU  OF  MINES   IS  DOING  371 

line  lead  to  the  belief  that  a  program  of  research  by  the  Bureau 
would  extend  the  field,  lead  to  discovery  and  application  of 
new  alloys,  and  make  for  more  efficient  use  and  cheaper  cost. 

The  work  carried  out  by  the  Bureau  for  the  Army  and  Navy 
in  the  production  of  helium  points  the  way  to  astonishing  pos- 
sibilities in  the  production  of  pure  gases  generally  on  a  cheap 
commercial  scale ;  as  for  example,  the  concentration  of  oxygen 
from  air  at  a  cost  which  would  allow  it  to  be  used  in  gas  pro- 
ducers, metallurgical  furnaces  and  other  industrial  equipment 
in  place  of  air,  as  at  present  used,  and  thereby  effect  some 
remarkable  economies. 

The  possibilities  in  the  whole  field  of  gases  are  great,  but 
the  reorganizaton  of  present  methods  so  fundamental,  and  the 
immediate  returns  so  uncertain,  that  private  capital  naturally 
hesitates  to  take  the  initiative.  What  better  illustration  can 
there  be  of  the  need  of  the  Government  taking  the  lead  and 
fostering  investigations  which  mean  the  supremacy  of  Ameri- 
can industry? 

The  Experiment  Stations 

Besides  the  mineral  mining  appropriation  just  referred  to, 
the  Bureau  received  $200,000,  or  15  per  cent,  of  its  total 
appropriation,  for  the  maintenance  of  eight  field  mining  ex- 
periment stations,  the  object  of  which  is  to  help  the  industry 
by  the  solution  of  technologic  problems  of  mining  and  treat- 
ment of  ores  and  mineral  products.  The  policy  has  been 
adopted  of  placing  these  stations  in  the  important  producing 
regions  and,  if  possible,  to  co-operate  with  the  local  industries 
and  mining  colleges  already  existing  there,  in  order  to  avoid 
duplication  of  effort  and  reduce  overhead  expenses.  Thus,  our 
Ceramics  Station  is  at  Columbus,  Ohio,  in  co-operation  with 
the  Ohio  State  University;  the  Southwestern  Station  at  Tuc- 
son, Arizona,  in  co-operation  with  the  University  and  State 
Bureau  of  Mines  of  Arizona,  and  is  conducting  investigations 
in  copper  leaching  methods.  On  the  other  hand,  our  Petroleum 
Experiment  Station  is  at  Bartlesville,  Okla.,  without  direct 
college  affiliation,  but  in  quarters  made  possible  by  the  support 
and  gift  of  the  Bartlesville  Chamber  of  Commerce. 

The  scattered  stations  gain  much  by  thus  being  in  direct 
contact  with  local  industry  and  local  conditions,  and  are  able 
to  keep  the  central  office  at  Washington  closely  informed  as  to 


372  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 

conditions  and  needs  of  the  industry.  On  the  other  hand,  this 
policy  lacks  the  unity  that  would  come  should  the  stations  be 
centralized,  and  requires  close  supervision  in  order  to  avoid 
duplication  of  effort.  The  Foster  Bill,  under  which  these  sta- 
tions were  established,  called  for  ten  individual  stations, 
eight  of  which  have  already  been  established,  and  the  appro- 
priations for  the  remaining  two  are  included  in  the  estimates 
now  going  to  Congress. 

As  to  future  growth,  the  question  naturally  arises  as  to 
whether  one  or  two  large  experiment  stations  located  at  a 
central  point,  such  as  the  Bureau  maintains  at  Pittsburgh,  and 
where  a  wide  range  of  technical  .equipment  and  talent  are 
immediately  available  on  a  problem,  are  to  be  preferred  to 
smaller  and  more  scattered  stations  as  just  described.  The 
situation  is  complicated  by  the  fact  that  a  local  industry  almost 
invariably  desires,  and  with  some  justification,  to  have  its 
problems  investigated  locally,  even  though  work  that  is  ap- 
plicable to  the  local  problem  might  be  carried  on  at  some  other 
place. 

The  probable  solution  is  the  maintenance  of  a  limited  num- 
ber of  more  or  less  temporary  or  movable  field  stations,  but  to 
supplement  their  work  with  several  large  central  stations,  each 
specializing  on  some  one  major  line,  such  as  our  present  Pitts- 
burgh Station,  which  has  specialized  on  coal  and  its  myriad 
problems.  ' 

Testing  Fuels 

One  of  the  primary  functions  of  the  Bureau  was  the  testing 
of  fuels — work  that  had  been  started  by  the  technologic  branch 
of  the  Geological  Survey  and  transferred  to  the  Bureau  on  its 
formation.  For  carrying  on  this  work  the  Bureau  received 
last  year  $142,510,  or  11  per  cent,  of  its  appropriation.  Out 
of  this  a  large  service  laboratory  is  maintained  which  analyzes 
all  Government  coal  purchases  and,  in  addition,  thousands  of 
samples  each  year  whjch  are  collected  by  Bureau  field  engi- 
neers. Thus,  gradually,  there  is  being  accumulated  exact 
information  as  to  the  nature  and  character  of  every  kind  of 
coal  from  every  district  in  the  country.  In  the  actual  testing 
work  special  attention  has  been  given  to  the  economic  com- 
bustion of  coal  by  the  small  user,  represented  mainly  by  the 
small  hand-fired  boiler  plant,  and  by  the  domestic  consumer. 


WHAT  THE  BUREAU  OF  MINES  IS  DOING  373 

It  has  been  easier  and  cheaper,  also,  to  study  the  small  furnace, 
and  much  fundamental  data  has  been  obtained  and  dissemi- 
nated as  to  what  actually  takes  place  in  the  furnace  during 
combustion  of  the  fuel.  Utilization  of  lower  grade  and  cheaper 
fuels  as  substitutes  for  more  costly  fuels  has  been  demon- 
strated and  put  into  effect  in  many  lines.  Startling  wastes  of 
energy  in  the  ordinary  plants  have  been  proved  and  brought 
to  the  attention  of  the  public.  Today  the  situation  is  more 
alive  and  more  worthy  of  attention  than  ever  before.  In  pre- 
war days,  with  coal  in  many  regions  available  at  about  a  dollar 
a  ton,  care,  refinements  and  possible  saving  of  energy  were 
often  a  matter  of  technical  interest  only,  where  today,  with 
coal  at  several  times  the  above  price,  even  small  percentage 
savings  of  fuel  are  a  dividend-paying  necessity. 

To  the  fuel  engineer,  the  possibilities  for  the  future  are 
almost  without  limit.  To  the  man  who  doubts  the  wisdom  of 
research  with  public  money,  here  is  a  field  where  the  initial 
expenses  of  establishing  and  conducting  real  research  are 
too  great  to  justify  private  individuals  or  corporations  to 
undertake  from  the  standpoint  of  money  returns  to  themselves 
alone ;  yet  because  the  results  of  the  research  affect  thousands 
of  furnaces,  each  in  a  small  way,  the  aggregate  nation-wide 
benefit  is  immeasurably  more  than  the  initial  expenditure. 
The  successful  researches  of  the  Bureau  of  Mines,  with  natural 
gas  heating  and  cooking  appliances,  are  a  case  in  view. 

Smoke  in  Cities 

For  the  future  the  public  must  realize  that  the  serious  city 
smoke  troubles  are  remedial  nuisances,  dependent  for  remedy 
equally  on  the  public,  the  fuel  engineer,  the  consumer  of  coal 
and  the  fireman.  Either  the  fireman  and  the  man  for  whom 
he  works  must  be  taught  to  burn  the  coal  without  smoke,  or 
else  artificially  prepared  fuels  from  which  the  smoke  forming 
tars  and  volatiles  have  been  taken  must  be  used.  In  both 
lines  the  interest  of  the  Bureau  is  paramount.  The  program 
should  be:  First — Investigating,  teaching  and  educating  the 
great  fuel-burning  public  to  the  money  and  health  value  of  the 
right  fuel,  and  the  right  furnace  in  the  right  place,  fired  in 
the  right  way.  Second — Aiding  in  the  development  of  pre- 
paring new  fuels,  especially  from  waste  and  low-grade  fuels, 
such  as  lignites.  If  we  add  to  these  problems  the  host  of  fuel 


374  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

problems  that  are  acute  in  the  petroleum  product  using  or 
internal-combustion  field,  and  the  necessity  for  getting  more 
energy  from  the  national  and  rapidly  wasting  asset,  petroleum, 
we  must  see  that  the  right  use  of  fuel  has  become  a  national 
concern. 

The  final  main  division  of  the  Bureau's  work  is  petroleum 
and  natural  gas,  for  which  $135,000,  or  approximately  11  per 
cent  of  our  money,  is  expended. 

Value  of  Trained  Petroleum  Engineers 

A  few  years  ago  a  trained  petroleum  engineer  would  have 
been  a  curiosity.  The  so-called  oil  man  attended  to  the  loca- 
tion and  drilling  of  the  wells,  and  usually  had  charge  as  well 
of  the  marketing  of  the  product.  It  was  considered  essentially 
a  game  for  the  practical  man  who  usually  had  spent  a  lifetime 
in  the  work  in  the  older  Eastern  fields.  Today  we  find  the 
developed  industry  separating  into  a  number  of  distinct  fields, 
in  each  of  which  years  of  effort  are  required  to  become  effi- 
cient, and  which  are  requiring  increasingly  specialized  tech- 
nical experts.  The  astonishing  increase  in  the  number  of 
producing  districts  and  companies,  the  short  life  of  properties 
and  waste  of  product,  the  tremendously  increased  demand  for 
the  products  of  petroleum,  and  the  universal  dependence  on 
petroleum  products  for  power  and  lubrication  of  the  automo- 
bile has  made  the  question  a  national  one.  In  addition,  the 
Inter-State  relations  in  the  production,  distribution  and  utili- 
zation of  natural  gas,  and  the  immediate  necessity  for  conser- 
vation measures,  bring  the  whole  petroleum  industry  before  the 
public  eye  as  possibly  our  most  active  and  interesting  national 
resource  question.  How  has  this  national  Bureau  helped  the 
industry?  Most  of  all,  by  very  definite  practical  field  work. 
The  efforts,  it  is  true,  have  been  conducted  with  a  small  staff 
and  the  work  spread  over  a  large  territory.  Operating, 
however,  with  a  staff  of  engineers  who  have  had  a  wide  field 
experience  and  free  from  any  local  prejudices,  better  drilling 
practice  has  been  fostered;  for  example,  the  conservation  of 
oil  and  gas  by  the  use  of  mud-laden  fluids  and  other  methods 
has  been  widely  demonstrated,  and  wells  considered  ready  for 
abandonment  have  been  brought  into  production  again  by  the 
operators.  The  Bureau  is  not  necessarily  the  discoverer  or 
first  user  of  the  many  methods  and  processes  it  advocates ;  it 


WHAT  THE  BUREAU   OF  MINES   IS  DOING  375 

oftentimes  is  rather  the  agency  for  quickly  disseminating 
valuable  information  to  the  field  where  the  most  good  will 
result. 

In  the  Bureau's  petroleum  laboratory,  success  has  been  at- 
tained in  developing1  improved  methods  for  analyzing  oil 
and  its  products,  and  in  standardizing  and  reducing  to  exact 
specifications  the  needs  of  the  producer  and  consumer.  Prog- 
ress has  been  made  in  the  working  out  of  processes  designed 
to  recover  greater  percentages  of  gasoline  and  the  other  light 
fractions  from  the  crude  petroleum. 

The  future  of  the  whole  work  is  bright.  The  need  of  a 
national  program  which  will  bring  the  oil-shale  resources  of 
the  West  through  the  trying  experimental  and  semi-commer- 
cial stages  to  the  point  where  operating  companies  can  be 
reasonably  sure  of  success  is  a  necessity.  The  advance  work 
should  be  done  now,  so  that  in  a  few  years,  when  the  failing 
supplies  of  petroleum  begins  to  be  felt,  the  oil-shale  industry 
can  fill  the  gap  without  interruption  in  the  nation's  business. 
No  other  proposed  substitute  for  petroleum  has  the  possibili- 
ties for  quantity  and  cheap  production  as  the  oil-shales. 

There  are  still  great  possibilities  in  our  older  and  supposedly 
exhausted  oil  fields  through  experimentation  and  applied  engi- 
neering. Probably  not  more  than  10  to  20  per  cent,  of  the 
actual  petroleum  in  the  ground  is  recovered  on  the  average 
from  a  well  by  the  ordinary  methods  of  pumping.  Processes 
based  on  introducing  water  and  compressed  air  into  the  ground 
give  enough  promise  when  properly  conducted,  so  that  an 
extensive  campaign  of  experimentation  and  education  should 
be  started. 

Natural  gas,  in  the  past  so  cheap  and  so  common  over  large 
areas  in  this  country,  is  above  all  the  ideal  fuel  for  the  city 
domestic  uses.  When  a  recent  French  official  mission  visited 
Pittsburgh  and  saw  the  wonderful  steel  mills,  coal  mines  and 
other  activities,  the  point  that  interested  them  most  was  a 
pipe  coming  out  of  the  ground  producing  gas  that  burned;  a 
common  thing  to  us  was  to  them  a  wonderful  natural  resource 
without  parallel  in  their  previous  experience.  So  accustomed 
have  many  large  cities  become  to  this  fuel  that  its  actual  early 
forthcoming  exhaustion  is  not  vividly  appreciated.  The  incon- 
venience and  great  cost  of  replacing  this  fuel  with  a  more 
costly  and  inefficient  artificial  gas  should  be  delayed  as  long 


376  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

as  possible.  The  Inter-State  relations  of  supply  and  consump- 
tion are  intricate,  and  an  independent  outside  agency  as  the 
Bureau  of  Mines,  through  ascertaining  facts  and  promoting 
efficient  use,  can  assist  in  prolonging  the  supply. 

Losses  in  Oil  Operations 

Of  late  we  have  realized  the  enormous  losses  by  evaporation 
in  petroleum  and  petroleum  products  between  the  well  and  the 
refinery.  The  annual  loss,  which  may  be  measured  by  the  indi- 
vidual producer  as  a  few  barrels  or  a  few  thousand  barrels 
per  year,  becomes  millions  of  barrels  per  year  for  the  country 
as  a  whole,  and  in  the  face  of  our  declining  supply  demands 
a  vigorous  campaign  in  order  to  lessen  it. 

The  4  per  cent,  of  the  Bureau's  money  not  accounted  for  in 
these  remarks  is  used  for  routine  expenditure,  as  rents  and 
improvements  of  grounds,  etc. 

I  cannot  close  this  discussion  of  the  policies  of  the  Bureau 
without  bringing  to  the  attention  of  the  mining  public  a  novel, 
and  so  far  successful,  phase  of  our  work  whereby  we  have 
endeavored  to  make  one  dollar  of  our  appropriation  do  the 
work  of  two.  It  is  by  means  of  co-operative  agreements  with 
outside  agencies  for  the  conducting  of  investigative  work. 
Thus,  during  the  present  year  the  Bureau  has  in  force  over  40 
such  agreements,  and  is  spending  about  $500,000  of  outside 
money  in  the  work. 

Briefly,  another  governmental  agency,  or  a  State  agency, 
or  a  private  agency,  has  a  problem  in  mining  or  metallurgy  to 
solve.  The  Bureau  of  Mines  has  the  organization  and  equip- 
ment best  fitted  to  do  the  work.  The  facts  to  be  obtained  are 
fundamental  and  widespread  in  application,  and  probably 
will  benefit  the  whole  industry.  The  Bureau  will  have  the 
rights  of  publication  of  any  or  all  phases  of  the  work.  The 
outside  agency  furnishes  part  or  all  of  the  money  for  the  work 
which  is  conducted  under  the  direction  of  the  Bureau. 

The  apparent  success  and  increasing  call  on  the  Bureau  for 
co-operative  work  of  this  character  leads  me  to  the  belief  that 
its  expansion  will  go  far  to  answer  the  question  so  frequently 
asked,  "What  is  the  Government  going  to  do  to  foster  re- 
search ?"  May  not  the  answer  be,  "As  much  as  the  industries 
themselves  have  enough  demand  for  and  confidence  in  to  share 
part  of  the  burden  of  the  work." 


THE   MINERAL    LEASING    ACT  377 


THE  MINERAL  LEASING  ACT 

By  CLAY  TALLMAN 
Commissioner  of  the  General  Land  Office,  Washington,  D.  C. 

I. 
A  New  Policy 

The  mineral  leasing  act  of  February  25,  1920,  may  be 
regarded  as  epochal  in  the  history  of  our  public  land  legisla- 
tion, for  with  this  act  we  have  an  entirely  new  governmental 
policy  introduced  into  our  public  land  system.  This  act 
marks  as  wide  a  departure  in  the  administration  of  the  Gov- 
ernment's mineral  lands  as  did  the  homestead  law  of  1862 
with  respect  to  the  Government's  agricultural  lands.  This 
is  all  in  harmony  with  the  changing  public  sentiment  charac- 
teristic of  a  progressive  people.  You  will  recall  that  from  the 
beginning  of  Government  under  the  Constitution  the  general 
public  land  policy  up  to  the  time  of  the  homestead  law  of 
1862  was  to  consider  the  public  domain  primarily  as  a  source 
of  revenue  to  meet  the  national  obligations.  During  that 
period  our  mineral  resources  were  of  comparatively  slight 
importance,  but  during  that  period  there  developed  a  convic- 
tion in  the  minds  of  thinking  men  that  it  was  a  mistake  to 
regard  the  land  and  natural  resources  merely  as  a  source  of 
revenue  without  consideration  of  the  questions  of  the  develop- 
ment and  use  of  such  resources.  The  results  of  the  old  policy 
had  not  been  satisfactory.  It  required  many  years  for  the 
country  to  learn  that  development,  use,  home  building  and 
equitable  distribution  were  far  more  to  be  desired  than  im- 
mediate returns  in  cash,  and  that  the  increased  values  result- 
ing from  a  wide  distribution  of  the  land  resources  among  all 
the  people  furnished  far  greater  sources  of  revenue  with  which 
to  run  the  Government. 

Homestead  and  Mining  Laws  Followed  Same  Principle 

The  same  underlying  principle  was  followed  in  the  mining 
laws  of  1866  and  1872,  and  the  coal-land  law  of  1873.  The  first 
of  these  were  merely  confirmatory  of  the  customs  of  miners  that 
had  developed  by  force  of  circumstances  on  the  public  domain 
in  California  and  Nevada.  Technically,  all  mining  on  the 


378  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

public  domain  prior  to  1866  was  a  trespass.  The  mining 
laws  were  extreme  in  their  liberality;  the  prospector  who 
found  mineral  drove  in  his  stake,  and  the  mine  and  all  the 
proceeds  thereof  were  his.  That  policy  led  to  intensive  explora- 
tion and  development.  The  homestead  law  of  1862  and  the 
mining  acts  of  1866  and  1872  are  generally  looked  upon  as 
among  the  greatest  contributory  factors  to  the  unprecedented 
development  of  the  land  and  mineral  resources  of  the  West 
and  Middle  West  during  the  past  half  century. 

Reluctance  to  Change 

I  mention  these  facts  merely  to  explain  the  reluctance  on 
the  part  of  the  public  and  Congress  to  break  away,  even  to  a 
limited  extent,  from  a  policy  which,  notwithstanding  many 
apparent  abuses  and  defects,  on  the  whole  had  been  pro- 
ductive of  such  tremendous  results.  It  required  10  years  or 
more  of  constant  agitation  in  and  out  of  Congress  to  inaugu- 
rate the  homestead  law ;  it  took  about  the  same  length  of  time 
to  get  through  this  leasing  act.  Though  it  seems  strange  to 
us  now,  the  homestead  policy  was  seriously  attacked  on  con- 
stitutional grounds;  some  were  disposed  to  view  this  leasing 
act  as  unconstitutional,  or  at  least  not  in  harmony  with  the 
theory  of  the  Constitution  to  admit  new  States  on  a  parity 
with  those  already  in  the  Union;  but  the  absolute  power  of 
Congress  over  the  public  lands  had  been  so  completely  settled 
by  decisions  of  the  Supreme  Court  that  the  main  considera- 
tion in  the  passing  of  the  leasing  bill  was  that  of  governmental 
policy. 

Change  of  Conditions  Requires  Change  of  Laws 

But  as  time  went  on  radical  changes  took  place;  the  time 
came  when  the  land  and  mineral  resources  were  no  longer 
unlimited  as  compared  with  the  country's  necessities  for  the 
use  and  products  of  such  resources.  The  great  virgin  forests, 
regarded  in  the  early  days  as  an  obstacle  to  development, 
became  largely  destroyed  or  consumed;  no  longer  was  there 
available  a  quarter  section  of  fertile  land  which  the  settler 
could  have  for  the  taking;  the  reclamation  of  arid  lands  at 
heavy  expense  became  a  necessity;  an  ample  supply  of  cer- 
tain mineral  resources  became  vital  in  the  world  competition 
for  national  supremacy;  the  control  of  certain  natural  re- 


THE   MINERAL    LEASING    ACT  379 

sources  by  particular  groups  became  incompatible  with  the 
public  interest  generally;  the  time  arrived  when  further 
development  and  additional  production  must  come  from  a  bet- 
ter use  and  conservation  of  the  resources  already  discoyered 
or  partly  developed,  rather  than  by  merely  expanding  over 
virgin  territory.  In  a  word,  changing  conditions  rendered 
some  of  our  laws  and  policies  impractical  and  unadapted  to 
the  necessities  of  the  present.  The  American  people  are  for- 
ward looking;  they  are  not  prone  to  worship  idols  or  dream 
of  the  past  in  dealing  with  problems  of  the  present;  they  are 
disposed  to  test  out  the  efficacy  of  any  measure  on  the  basis 
of  the  cold  facts  rather  than  to  be  controlled  by  a  policy  sim- 
ply because  it  is  what  we  have  always  done.  This  mental 
attitude  explains  the  enactment  of  the  mineral  leasing  law. 

Defects  in  Coal  Laws. 

The  mineral  leasing  act  provides  a  new  method  for  the 
disposition  of  coal,  oil,  oil-shale,  phosphates  and  sodium  de- 
posits. The  forerunner  of  this  act  was  a  coal-leasing  act  for 
Alaska  and  a  potash-leasing  act.  First,  let  us  consider  for  a 
moment  the  reasons  for  a  new  plan  for  the  disposition  of 
these  minerals.  The  coal  land  law  was  passed  in  1873,  and 
subsequently  incorporated  into  Sees.  2347  to  2352,  inclusive, 
of  the  Revised  Statutes.  Briefly,  it  provided  that  any  citizen 
of  the  United  States  could  acquire  one  quarter  section  of 
coal  land  at  a  minimum  price  of  $10  or  $20  per  acre,  depend- 
ing on  the  distance  from  railroad;  an  association  of  persons 
could  take  not  exceeding  320  acres,  and  an  association  of  not 
less  than  four,  who  had  expended  not  less  than  $5000  in  work- 
ing and  improving  the  mines  sought  to  be  purchased,  could 
get  640  acres — that  was  the  limit.  The  theory  seemed  to  be 
that  a  quarter  section,  or  at  the  most  a  section,  was  sufficient 
for  a  mine,  and  that  individuals  or  groups  of  individuals  in 
the  areas  where  coal  existed  would  be  able  to  supply  their 
own  necessities  and  that  of  the  country  by  making  possible  a 
large  number  of  little  mines.  But  the  coal-mining  business  is 
not  handled  in  that  way.  The  nation's  needs  for  coal  many 
years  ago  became  so  great  that  coal  mining  had  to  be  con- 
ducted on  a  large  scale  with  large  equipment  and  ample 
transportation  facilities,  all  necessitating  heavy  investment, 
otherwise  the  coal  could  not  be  economically  taken  out  and 


380  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

marketed;  the  little  operator  could  not  compete  with  the  big 
operator ;  it  was  hardly  practical  even  for  a  farmer  to  operate 
his  own  coal  mine  on  the  back  lot ;  he  Could  buy  his  coal  from 
the  big  producer  cheaper  than  he  could  mine  it  himself,  par- 
ticularly if  he  had  to  mine  at  any  depth.  This  led  to  the  coal 
land  frauds  with  which  the  Land  Office  records  have  been 
replete  for  the  last  25  years.  The  primary  cause  of  these 
frauds  was  the  desire  to  get  enough  coal  land  to  justify  the 
development  of  a  real  mine  that  could  produce  coal  in  competi- 
tion with  the  general  market  and  with  other  mines  on  private 
lands.  The  coal  land  frauds  resulted  not  so  much  from  an 
unwillingness  to  pay  a  fair  price  for  the  land  or  fair  royalty 
for  the  right  to  mine  as  from  the  absolute  inability  otherwise 
to  get  together  enough  coal  land  to  make  a  mine.  It  is  unnec- 
essary for  me  to  comment  on  the  importance  of  making  that 
supply  available  at  a  fair  price.  The  concentration  of  the 
coal  supply  and  the  control  thereof  by  private  interests  con- 
stitutes one  of  our  principal  economic  and  industrial  ques- 
tions of  the  day.  There  is  still  an  enormous  amount  of  coal 
on  the  public  domain.  The  old  law  was  inadequate,  either 
from  the  standpoint  of  practical  operation  or  public  control; 
hence  coal  was  a  fit  subject  for  the  new  legislation. 

The  Placer  Law 

But  with  the  placer  law  applied  to  oil,  we  had  a  worse  mis- 
fit than  in  the  case  of  the  coal  laws.  The  first  placer  law  was 
passed  in  1870,  and  now  appears  as  Sees.  2339  and  2330  R.  S. 
It  provided  that 

"Claims  usually  called  'placers/  including  all  forms  of 
deposit,  excepting  veins  of  quartz,  or  other  rock  in  place, 
shallbe  subject  to  entry  and  patent,  under  like  circum- 
stances and  conditions,  and  upon  similar  proceedings,  as 
are  provided  for  vein  or  lode  claims." 

Everybody  knows  that  "claims  usually  called  placers"  was 
understood  by  the  public  and  Congress  at  the  time  this  act 
was  passed  to  refer  to  the  loose  gold  deposits  found  in  the 
gravel  beds  of  certain  rivers  in  California.  Congress  had 
already  provided  for  lode  locations  on  a  different  theory ;  that 
is  to  say,  the  location  was  of  the  lode  or  vein  in  place;  some 
other  law  was  necessary  to  cover  mineral  deposits  not  in 
place,  hence,  originally,  the  principal  distinction  between  lode 


THE   MINERAL  'LEASING    ACT  381 

and  placer  claims  was  whether  or  not  the  mineral  was  found 
in  rock  in  place.  But  Congress  and  the  Department  have 
long  disregarded  this  distinction;  by  legislation  or  depart- 
mental construction,  the  application  of  the  placer  law  has 
been  extended  to  a  variety  of  deposits,  both  as  to  composi- 
tion and  occurrence.  If  the  Department  refused  to  extend  it, 
Congress  would  extend  it.  The  placer  law  was  made  applica- 
ble to  petroleum  deposits  by  the  Act  of  February  11,  1897, 
because  the  Department  had  refused  to  patent  an  oil  claim 
under  the  placer  law.  A  closely  related  question  was  whether 
oil  is  a  mineral  within  the  meaning  of  that  term  as  used  in  the 
mining  law,  and  this  was  not  finally  settled  until  a  decision  in 
the  United  States  Supreme  Court  in  the  Burke  case  in  1914 
(234  U.  S.,  669,  691). 

Why  Unadapted  to  Oil 

The  impracticability  of  trying  to  apply  the  placer  law  to 
oil  has  been  amply  demonstrated.  It  is  fundamental  that 
discovery  of  mineral  within  the  area  of  the  location  is  the 
origin  and  basis  of  all  rights  under  the  mining  law.  The 
prospector  cannot  discover  oil  with  his  pick  and  shovel;  it 
requires  extensive  equipment,  large  expense  and  time,  hence 
the  oil  prospector  found  himself  in  a  precarious  situation 
while  he  was  prosecuting  his  work  of  exploration.  At  the 
most,  he  could  legally  hold  only  the  claim  on  which  he  was 
drilling  if  he  kept  at  it  diligently ;  if  he  struck  oil,  others  would 
have  an  equal  chance  at  adjoining  lands.  To  set  up  a  sepa- 
rate rig  on  each  of  a  number  of  claims  in  an  unproved  field 
and  began  drilling  on  all  of  them  when  one  well  would  prove 
the  structure  was,  of  course,  out  of  the  question.  He,  there- 
fore, had  no  assurance  whatever  of  acquiring  title  to  a  suffi- 
cient area  of  public  land  to  justify  the  expense  of  testing  an 
unproved  field.  These  conditions  led  to  the  practice  of  mak- 
ing so-called  "paper"  locations,  that  is,  stakes  and  notices 
without  discovery.  As  a  matter  of  law  such  "claims"  were 
not  claims  at  all,  and  were  respected  just  enough  to  lay  the 
foundation  for  much  litigation.  Strong-arm  methods  and 
subterfuge  were  frequently  resorted  to  so  as  to  hold  the  land 
pending  discovery.  Yet  titles  of  this  character  were  made  the 
basis  of  enormous  investments.  To  have  a  great  industry 
dealing  in  a  public  necessity  like  the  oil  business  has  come 


382  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

to  be  in  such  a  chaotic,  haphazard  and  uncertain  condition 
was  certainly  not  in  harmony  with  the  genius  of  the  American 
people. 

Changes  in  the  Oil  Industry 

In  the  meantime  there  was  a  tremendous  increase  in  the 
use  of  petroleum  and  its  products,  which  led  to  great  activity 
in  the  attempt  to  secure  claims  on  the  public  domain  and  to 
drill  for  and  produce  oil.  The  desire  to  acquire  territory  led 
to  the  use  of  dummy  locators,  a  species  of  fraud  at  once  diffi- 
cult to  prevent  and  difficult  for  the  good-faith  purchaser  to 
guard  against.  Operations  were  not  conducted  with  the  care 
or  good  judgment  or  subject  to  the  regulations  under  which 
the  business  is  now  conducted.  In  many  instances  operations 
were  so  conducted  as  to  cause  great  damage  to  the  oil  deposits. 
It  was  evident  that  the  supply  of  oil  in  the  ground  was  limited. 
Though  fortunes  were  being  made  out  of  oil  production,  the 
Government  was  selling  the  land  for  $2.50  an  acre.  Every- 
thing pointed  to  the  necessity  of  a  more  practical  law,  closer 
supervision  and  conservation  of  the  oil  deposits.  It  was  for 
the  purpose  of  holding  the  public  oil  lands  in  status  quo  pend- 
ing such  legislation  that  the  withdrawals  were  made. 

The  Withdrawals 

The  withdrawals  precipitated  the  oil-land  controversy  which 
has  continued  in  the  courts,  the  Land  Department,  Congress 
and  the  press  for  the  last  10  years.  Millions  of  dollars'  worth 
of  property  were  involved.  The  large  and  widely  distributed 
use  of  petroleum  products  interested  the  whole  public,  and  the 
problem  was  aggravated  by  the  vital  need  of  such  products 
during  the  war.  So  much  misinformation  and  misunder- 
standing as  to  the  real  facts  in  this  controversy  and  the  real 
issues  to  be  determined  seemed  to  prevail,  that,  in  one  of 
my  annual  reports,  I  endeavored  to  summarize  in  a  simple  and 
comprehensive  way  the  main  points  in  the  public  oil  land 
situation  as  then  presented,  as  follows: 

The  Oil  Land  Controversy 

As  to  the  matter  of  proceedings  now  pending,  there 
are  in  the  main  three  general  classes:  (1)  Land  Office 
hearings  on  Government  contests  against  applications 
for  patents;  (2)  what  are  commonly  known  as  the  with- 


THE   MINERAL    LEASING    ACT 

drawal  suits  in  the  courts  to  quiet  title  in  the  Govern- 
ment to  unpatented  lands,  for  an  accounting  and  dam- 
ages, with  ancillary  receiverships,  and  (3)  what  are 
commonly  known  as  the  Southern  Pacific  suits,  which  are 
to  cancel  patents  for  alleged  frauds  committed  in  the 
acquirement  of  title. 

*It  should  be  noted  at  the  outset  that  the  Southern 
Pacific  suits  (the  third  class)  have  no  connection  what- 
ever with  the  withdrawal  suits,  the  facts,  principles  and 
issues  all  being  entirely  different.  The  fraud  alleged  in 
the  Southern  Pacific  suits  is  that  the  lands  were  all  of 
known  mineral  character,  and  so  known  to  the  Southern 
Pacific  officers  and  agents  at  the  time  the  company  filed 
and  received  approval  and  patent  of  its  selection  list.  In 
all  of  these  Southern  Pacific  suits,  except  one,  an  im- 
portant question  of  law  is  involved,  in  that  the  fraud  was 
not  discovered  or  suits  filed  for  more  than  six  years  after 
the  issuance  of  patent.  One  suit,  commonly  known  as 
the  Elk  Hills  case,  involving  6,109.17  acres,  was  com- 
menced before  the  statute  had  run.  This  case  was  won 
by  the  Government  in  the  trial  court,  and  is  now  pend- 
ing on  appeal.  The  evidence  in  the  other  Southern  Pacific 
cases,  eight  in  number,  and  embracing  163,654.09  acres, 
has  practically  all  been  taken.  Some  of  the  lands  in- 
volved in  the  Southern  Pacific  suits  are  among  the  most 
valuable  oil  lands  in  California,  and  the  suits  involve 
many  millions  of  dollars. 

Coming  to  the  so-called  withdrawal  cases,  classes  1  and 
2,  it  is  first  to  be  noted  that  some  years  ago  practically 
all  the  known  public  oil  lands  were  withdrawn  from 
entry  and  selection  "in  aid  of  proposed  legislation  affect- 
ing the  use  and  disposition  of  the  petroleum  deposits  on 
the  public  domain."  The  two  principal  withdrawal  or- 
ders around  which  the  present  controversy  hangs  were 
made  on  September  27,  1909,  and  July  2,  1910,  both  cov- 
ering substantialy  the  same  lands.  The  effect  of  the  first 
withdrawal  order  was  to  cut  off  everything  but  valid,  per- 
fected, legal  claims.  At  this  time  there  was  great  activ- 
ity in  certain  sections  in  the  location,  development  and 
exploitation  of  new  fields.  Manifestly  this  order  caught 
the  claimants  in  every  conceivable  stage  of  development, 
from  those  who  had  only  "paper  location"  to  those  who 
had  drilled  nearly  to  oil.  In  this  connection  there  was 
not  a  little  argument  and  difference  of  opinion  as  to  the 
validity  of  this  withdrawal  order  of  September  27,  1909, 
and  some  of  the  lower  courts  held  that  the  order  was 


*But  cases  subsequently  disposed  of  the  Elk  Hills  in  favor  of  the 
Government  and  the  other  in  favor  of  the  claimant 


384  PROCEEDINGS   OF  AMERICAN  MINING'  CONGRESS 

without  authority  of  law  and  void,  but  the  Supreme 
Court  of  the  United  States  in  February,  1915,  settled  the 
question  in  what  was  known  as  the  Midwest  case,  hold- 
ing that  the  order  was  lawful,  valid  and  effective. 

In  the  meantime,  however,  Congress  took  a  hand  in 
the  matter,  and  on  June  25,  1910,  the  so-called  Pickett 
Act  was  approved.  The  principal  purpose  of  this  act 
was  to  remove  any  doubt  as  to  the  authority  of  the  Presi- 
dent to  make  withdrawals  by  expressly  giving  him  that 
authority.  At  the  instance  of  the  oil  men,  who  com- 
plained that  they  had  been  treated  unfairly,  in  that  they 
had  been  taken  unawares  after  the  expenditures  of  large 
sums  on  the  basis  of  the  ten  existing  laws  and  conditions,  a 
proviso  was  inserted  to  the  effect  that  "a  bona  fide  occu- 
pant or  claimant"  who  at  the  date  of  any  withdrawal 
order  "heretofore  or  hereafter  made"  was  in  diligent 
prosecution  of  work  leading  to  discovery,  and  continued 
same  with  diligence,  would  not  be  affected  by  the  with- 
drawal; but  Congress  expressly  disclaimed  any  intention 
of  validating  or  invalidating  the  withdrawal  therefore 
made,  i.  e.,  that  of  September  27,  1909. 

So  the  whole  question,  so  far  as  the  effect  of  the  with- 
drawals is  concerned,  is :  Was  the  claim  perfected  by  the 
discovery  of  oil  before  the  withdrawal;  and  if  not,  was 
the  claimant  in  diligent  prosecution  of  work  leading  to 
discovery  on  that  date,  which  diligence  was  continued 
to  discovery,  and,  incidentally,  of  course,  what  consti- 
tutes diligence  under  all  the  varied  and  complicated  facts 
and  circumstances  of  the  many  cases  that  have  arisen, 
for  it  now  apears  probable  that  hundreds  of  thousands  of 
dollars  have  been  expended  in  the  development  of  im- 
mensely valuable  properties  not  covered  or  saved  by  the 
proviso  to  the  Pickett  Act. 

Another  feature  of  the  withdrawal  matter  is  that  of 
the  naval  petroleum  reserves.  By  order  of  September 
2,  1912,  the  President  created  naval  petroleum  reserve 
No.  1,  commonly  known  as  the  Elk  Hills,  consisting  of  a 
gross  area  of  a  little  over  38,000  acres;  by  order  of 
December  11,  1912,  the  President  created  naval  reserve 
No.  2,  sometimes  referred  to  as  the  Buena  Vista  Hills, 
and  covering  a  little  over  29,500  acres ;  by  order  of  April 
30,  1915,  naval  reserve  No.  3,  the  Teapot  Dome,  in 
Wyoming,  was  created,  embracing  9481  acres.  Large 
portions  of  naval  reserves  No.  1  and  2,  in  California, 
are  private  patented  lands;  naval  reserve  No.  2  contains 
some  of  the  most  valuable  producing  oil  lands  in  Cali- 
fornia. The  so-called  Elk  Hills  suit  against  the  Southern 
Pacific  Company  includes  a  considerable  area  in  the  Elk 
Hills  naval  reserve.  It  should  be  understood  that  all  the 


THE   MINERAL  LEASING  ACT  385 

lands  included  in  these  naval  reserves  was  also  included 
in  the  orders  of  withdrawal  of  September  27,  1909,  and 
July  2,  1910.  The  creation  of  the  naval  reserves  only 
operates  to  set  aside  these  areas  for  the  exclusive  use 
of  the  navy.  While  the  principles  of  law  and  the  right 
to  a  patent  on  claims  situated  in  the  naval  reserves  are 
essentially  the  same  as  those  situated  in  withdrawn  areas 
outside  of  the  naval  reserves,  due  to  the  fact  that  the 
navy  has  been  desirous  of  immediately  clearing  the  naval 
reserves  of  all  doubtful  claims,  a  somewhat  different  pol- 
icy has  been  followed  in  the  naval  reserves  from  that 
outside.  There  are  no  patented  lands  in  naval  reserve 
No.  3,  in  Wyoming,  though  there  is  a  small  area  of 
school  sections. 

Injected  into  this  oil-land  situation  in  many  cases  is 
the  issue  of  fraud,  resulting  from  so-called  dummy  loca- 
tors. This  issue,  of  course,  has  no  connection  with  the 
withdrawal  policy  and  would  have  existed  in  any  case 
regardless  of  the  withdrawals.  The  placer-mining  law 
provides  that  a  person  may  locate  a  claim  of  20  acres, 
and  that  an  association  of  persons  up  to  eight  may  locate 
a  claim  equal  to  20  acres  for  each  locator ;  hence  the  great 
majority  of  the  locations  consist  of  160-acre  claims 
located  by  associations  of  eight  persons.  The  courts  and 
the  Department  during  recent  years  have  repeatedly  held 
that  each  locator  in  an  association  claim  must  have  an 
actual  bona  fide  interest  in  the  claim  located,  and  that  he 
cannot  simply  lend  his  name  as  a  locator  for  the  use  and 
benefit  of  somebody  else.  A  corporation  may  locate  any 
number  of  claims  of  20  acres  each,  but  a  group  of  asso- 
ciation locators  cannot  locate  a  claim  for  the  use  and 
benefit  of  a  corporation  or  individual.  The  advantage 
of  the  association  location  is  that  only  one  discovery  and 
the  same  amount  of  expenditure  for  patent  is  required 
on  each  claim,  whether  it  be  a  20-acre  claim  or  a  160-acre 
claim.  A  corporation  whose  title  is  now  bad  because, 
based  on  a  location  made  by  dummies  might  have 
acquired  a  perfectly  legal  title  to  the  land  in  question  by 
locating  it  in  20-acre  claims  by  making  a  discovery  on 
each.  It  is  possible  that  in  the  absence  of  the  inter- 
vening withdrawals  those  defective  locations  might  be 
abandoned  and  proper  locations  made.  The  fraud  in  the 
use  of  dummies  consists  in  one  individual  or  corporatioy 
by  this  device  seeking  to  acquire  a  larger  area  of  publil 
lands  with  a  certain  amount  of  expenditure  and  develop- 
ment than  the  law  allows.  Unfortunately,  the  use  of 
dummy  locators  appears  to  have  been  quite  generally 
resorted  to,  and  dummy  locations  are  void,  at  least  as  to 
all  those  connected  with  or  benefiting  by  the  fraud. 


386  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

Another  class  of  cases  consists  of  those  where  the 
charge  is  non-discovery  by  reason  of  the  fact  that  the 
alleged  discovery  on  which  the  location  is  predicated  con- 
sists of  gypsum  or  fuller's  earth.  This  difficulty  would 
also  have  existed  just  the  same  regardless  of  the  with- 
drawals, except  that  in  the  absence  of  the  withdrawal  a 
proper  and  legal  discovery  of  oil  might  later  be  made. 

The  proceedings  directed  in  all  the  Land  Office  hear- 
ings against  the  applications  for  patent  in  the  oil-land 
cases  consist,  therefore,  of  three  general  classes:  (1) 
Diligence  of  the  claimant  as  against  the  withdrawal;  (2) 
fictitious  locators,  and  (3)  alleged  subterfuge  discovery. 

In  cases  in  the  naval  reserves  and  some  outside,  suits 
have  been  started  to  quiet  title  in  the  Government  or  for 
an  accounting  and  damages  notwithstanding  applications 
for  patent  are  pending,  also  some  other  suits  have  been 
brought  against  claimants  who  have  never  made  any 
application  for  patent.  These  are  the  suits  that  are 
commonly  known  as  the  withdrawal  suits  as  distinguished 
from  the  Southern  Pacific  suits. 

As  soon  as  the  Government  began  actively  to  press 
these  cases,  operators  who  are  producing  oil  from  the 
lands  found  it  difficult  to  sell  same  because  the  purchas- 
ing concerns  refused  to  incur  any  liability  for  damage 
which  might  result  from  having  purchased  oil  taken  in 
trespass.  Consequently  Congress,  by  the  Act  of  August 
25,  1914,  authorized  the  Secretary  of  the  Interior  to 
enter  into  agreements  whereby  the  production  could  go 
on  pending  the  determination  of  the  right  to  title.  Un- 
der this  act  security  is  given,  or  a  certain  portion  of  the 
proceeds  of  the  oil  is  impounded,  to  satisfy  any  claims  of 
the  Government. 

Two  Propositions  Involved  in  Leasing  Act 

It  was  apparent  to  most  everybody  that  a  means  should 
be  found  for  settling  and  compromising  this  litigation,  expen- 
sive alike  to  the  Government  and  the  operators  and  sub- 
versive of  a  normal  program  of  development.  Therefore,  in 
the  enactment  of  this  legislation  Congress  had  to  do,  not  only 
with  the  laying  out  of  a  future  leasing  program,  but  the 
adjustment  of  pending  claims,  and  the  latter  was  by  far  the 
more  difficult  matter  to  handle.  Had  the  former  been  the 
only  question,  the  leasing  law  would  have  been  passed  five  or 
six  years  before  it  was.  The  difficulty  of  working  out  a  basis 
on  which  to  settle  the  existing  claims  was  the  principal  cause 
of  delay  in  the  enactment  of  the  leasing  law. 


THE   MINERAL  LEASING  ACT  387 

General  Character  of  Act 

Like  many  other  laws  passed  under  the  circumstances  above 
indicated,  this  act  is  really  a  series  of  compromises.  Even- 
tually sentiment  in  Congress  became  crystallized  in  favor  of 
a  leasing  law,  and  the  tendency  was  to  give  and  take  until  an 
act  was  agreed  upon.  Several  different  bills  passed  one  House 
or  the  other  in  prior  Congresses.  The  bill  that  was  finally 
passed,  first  passed  the  Senate  and  House  as  entirely  sepa- 
rate and  different  bills  under  the  same  number  and  title  in 
order  to  throw  the  whole  matter  into  conference  where  the 
differences  could  be  adjusted;  after  so  much  difference  of 
opinion  the  House  adopted  the  conference  report  by  a  vote  of 
287  to  13,  and  the  Senate  adopted  it  unanimously.  It  really 
got  to  the  point  where  if  one  member  of  the  conference  com- 
mittee insisted  that  something  be  put  in,  it  went  in ;  if  another 
insisted  on  something  coming  out,  it  went  out,  and  not  infre- 
quently this  was  done  without  anybody  taking  the  trouble 
to  ascertain  how  the  operation  left  the  general  structure  of 
the  bill.  The  law  is  inconsistent  with  itself  in  numerous 
respects;  many  provisions  are  not  clear  or  not  in  harmony 
with  other  provisions ;  still  other  provisions  either  are  mean- 
ingless or  mean  so  much  as  to  be  clearly  beyond  the  intention 
of  Congress.  As  a  rule,  little  attention  was  paid  to  harmon- 
izing this  act  with  the  general  body  of  the  public  land  laws,  as 
the  result  of  which  grave  questions  have  arisen  as  to  the  effect 
of  this  act  on  other  public  land  laws.  You  will  find  in  the 
act  illustrations  of  both  the  radical  and  the  conservative 
tendencies  of  the  times.  But  on  the  whole,  we  have  a  work- 
able foundation  laid  for  the  inauguration  of  a  leasing  system. 
The  inconsistencies  will  be  construed,  parts  that  are  obscure 
will  be  clarified,  some  changes  will  doubtless  be  made  by  Con- 
gress and  many  changes  will  occur  in  the  regulations  as  time 
and  experience  develop  the  necessity  for  them.  The  general 
principles  of  the  act  are  deemed  to  be  sound,  and,  with  the 
use  of  reasonable  judgment  and  good  sense  in  its  administra- 
tion, I  feel  that  it  will  serve  to  place  the  mining  and  market- 
ing of  the  minerals  to  which  it  applies  on  a  sound  business 
basis,  beneficial  alike  to  the  operator,  the  States,  the  United 
States  Reclamation  Service  and  the  public  generally. 


388  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

A  striking  feature  of  the  act,  and,  in  my  judgment,  a  good 
one,  is  that  much  is  left  to  regulation.  This  tends  to  elasticity 
and  gives  the  executive  departments  leeway  in  which  to  exer- 
cise administrative  discretion  on  situations  as  they  may  arise. 

Regulations 

The  act  is  in  a  sense  paternal  in  character;  that  is  to  say, 
there  is  not  so  much  in  it  of  legal  rights,  as  ordinarily  under- 
stood, as  of  privileges  granted  pursuant  to  the  judgment  of 
the  administrative  authority.  To  a  large  extent  the  act  is 
inoperative  in  the  absence  of  regulations.  For  instance,  one 
of  the  few  illustrations  of  a  self -operative  provision  of  the  act 
is  where  in  Section  13  it  is  provided  that  one  may  procure  a 
preference  right  to  a  prospecting  permit  by  posting  a  notice 
on  the  land,  which  preference  must  be  exercised  by  the  filing 
of  an  aplication  within  30  days.  But  the  act  provides  no 
place,  manner  or  form  in  which  to  file  the  application;  that 
is  left  entirely  to  regulation,  and,  in  fact,  the  granting  of  a 
permit  at  all  is  discretionary  with  the  Land  Department. 
Realizing  the  absolute  necessity  of  detailed  regulations,  as 
the  bill  took  definite  and  final  form,  we  in  the  Department 
made  diligent  effort  for  several  weeks  preceding  the  approval 
of  the  act  to  whip  into  shape  a  set  of  regulations ;  this  required 
many  conferences  of  many  hours.  None  of  us  realized  the 
number  nor  the  magnitude  of  the  questions  involved  in  the  act 
until  we  started  in  to  make  concrete  provision  for  its  adminis- 
tration. Fortunately,  the  conference  committee  held  the  bill 
for  some  weeks;  a  few  more  days  elapsed  before  the  confer- 
ence report  was  adopted  by  both  houses,  and  the  President 
held  the  bill  the  full  10  days  before  he  signed  it,  during  which 
last  period,  of  course,  we  knew  exactly  what  the  law  would  be. 
Under  these  circumstances  I  had  the  satisfaction  of  submit- 
ting to  the  Secretary  of  the  Interior  on  the  same  afternoon 
that  the  President  signed  the  bill,  a  complete  set  of  regula- 
tions for  the  administration  of  the  oil  and  gas  provisions  of 
the  act,  which  had  theretofore  been  reviewed  and  criticised 
by  the  legal  force  of  the  Department.  But  as  luck  would  have 
it,  just  at  this  time  we  had  a  change  of  secretaries,  which 
delayed  the  approval  of  the  oil  and  gas  regulations  until  the 
llth  of  March. 


HIE   MINERAL  LEASING  ACT  389 

General  Scope  of  the  Act — Beneficiaries 

Now  let  us  consider  for  a  moment  the  general  scope  of  the 
act.  As  I  have  before  stated,  it  applies  to  coal,  oil,  oil-shale, 
phosphates  and  sodium.  A  leasing  act  for  potash  deposits, 
along  the  same  general  lines  as  the  Act  of  February  25,  1920, 
became  a  law  on  October  2,  1917,  and  a  coal  leasing  act  for 
Alaska  was  passed  in  1914.  First,  it  should  be  noted  that 
those  who  may  exercise  the  privileges  granted  by  the  act  are 
citizens  of  the  United  States,  associations  of  such  citizens  or 
domestic  corporations,  and,  in  case  of  coal,  oil,  oil-shale  or  gas, 
municipalities.  Note  the  recognition  of  corporations  as  a 
necessary  instrumentality  for  the  conduct  of  modern  busi- 
ness. While  corporations  can  acquire  rights  under  the  min- 
ing laws  of  the  United  States,  this  has  not  been  the  general 
rule  under  other  public  land  laws.  The  only  privilege  afforded 
an  alien  under  the  act  is  to  become  a  stockholder  in  an  Ameri- 
can corporation  operating  under  the  act,  and  then  only  in  case 
his  country  grants  the  same  or  similar  privileges  to  Ameri- 
can citizens.  Though  several  cases  are  before  the  Depart- 
ment, it  has  not  yet  been  finally  determined  that  any  particu- 
lar foreign  country  is  a  reciprocating  nation  within  the  mean- 
ing of  this  provision  of  the  act. 

Lands  and  Deposits  to  Which  Applicable 

Another  significant  feature  is  that  the  classes  of  deposits 
to  which  the  act  is  applicable  are  all  such  deposits  and  lands 
containing  same  which  are  "owned  by  the  United  States/' 
except  in  the  Appalachian  forests,  national  parks  and  military 
and  naval  reservations.  The  view  has  been  expressed  that 
the  Department  might  under  this  provision  lease  the  Capitol 
Plaza  for  oil  development  if  it  saw  fit.  This  feature  is  im- 
portant, in  that  ordinarily  the  public  land  laws  are  applicable 
only  to  the  unwithdrawn  and  unreserved  public  lands,  while 
this  act  has  been  construed  by  the  Department  to  be  applicable 
to  withdrawn  lands,  whether  national  forests,  specifically  pro- 
vided for,  or  any  other  withdrawals,  subject  to  the  condition, 
however,  that  the  use  of  withdrawn  lands  for  development 
and  production  of  mineral  under  this  act  shall  not  be  per- 
mitted to  destroy  the  use  or  purpose  for  which  the  withdrawal 
was  made.  We  are,  therefore,  granting  prospecting  permits 


390  PROCEEDINGS   OF   AMERICAN   MINING  CONGRESS 

in  national  forests  and  on  lands  withdrawn  for  power  pur- 
poses, areas  withdrawn  under  the  reclamation  act  and  various 
other  withdrawals,  but  all  in  accordance  with  stipulations 
protective  of  the  uses  and  purposes  for  which  the  reservation 
was  created. 

This  is  a  practical  solution  of  the  matter  which  permits 
the  land  to  be  devoted  to  the  most  useful  purpose,  or  several 
useful  purposes,  of  which  it  is  susceptible.  In  this  connec- 
tion, also,  the  act  applies  to  reserved  deposits  where  the  Gov- 
ernment has  already  disposed  of  the  surface  with  a  reserva- 
tion of  the  mineral.  Conversely,  the  act  authorizes  the 
reservation  from  a  mineral  lease  of  the  right  to  dispose  of 
the  surface.  All  this  is  a  wide  departure  from  the  old  prac- 
tice, for  prior  to  the  so-called  "surface  acts"  now  in  full  opera- 
tion, --public  land  had  to  be  disposed  of  by  a  hard  and  fast  rule 
either  as  mineral  land  or  non-mineral  land.  Now  we  dispose 
of  the  surface  to  the  farmer  and  of  the  mineral  to  the  miner, 
or  different  minerals  even  to  different  miners ;  we  may  reserve 
land  for  various  reclamation  or  power  uses  and  yet,  under 
this  act,  we  are  not  compelled  to  tie  up  withdrawn  lands  from 
mineral  development  and  production,  though  it  may  be  many 
years  before  the  lands  will  actually  be  devoted  to  the  purposes 
for  which  withdrawn. 

Ample  Unit  of  Operation— -Limitations 

Another  feature  of  the  act  is  a  sensible  recognition  of  the 
amount  or  area  of  land  necessary  for  a  practical  unit  of  opera- 
tion. I  called  attention  at  the  beginning  to  the  defect  of  the 
coal  laws  and  the  placer  laws  in  this  respect.  Under  this 
act  one  may  procure  a  lease  to  as  much  as  four  sections  of 
coal  land  or  may  procure  the  exclusive  privilege  for  two  years 
to  prospect  the  same  area  of  oil  land,  and  may  procure  a  lease 
on  5000  acres  of  oil-shale;  he  is  not  restricted  to  individual 
development;  he  may  associate  others  with  him,  either  as  an 
association  or  corporation,  so  as  to  facilitate  the  financing  of 
his  venture.  On  the  other  hand,  there  are  many  limitations 
in  the  act  and  some  severe  penalties  designed  to  prevent 
monopoly,  and  to  procure  an  equitable  distribution  of  its  bene- 
fits among  more  people,  yet  giving  each  person  or  group  a 
sufficient  area  of  land  to  conduct  a  good  business-like  opera- 


THE   MINERAL  LEASING  ACT  391 

tion  on  a  scale  commensurate  with  like  operations  on  private 
lands. 

Co-operative  Use  of  Lands 

Another  important  feature  is  the  reservation  by  the  Gov- 
ernment of  the  right  to  permit  the  use  of  any  lands  leased 
for  rights-of-way  for  pipe-lines,  roads  or  other  equipment  of 
other  operators.  There  will  be  no  opportunity  to  secure  con- 
trol of  a  strategic  location  so  as  to  keep  others  out.  To  the 
same  end  it  is  provided  that  pipe-lines  controlled  by  lessees 
or  occupying  public  lands  shall  be  common  carriers. 

Royalty  Oil 

A  provision  that  will  be  of  great  importance  as  time  goes 
on  is  that  with  respect  to  the  disposition  of  royalty  oil.  As 
we  all  know,  the  supply  and  price  of  oil  has  always  been  very 
largely  controlled  by  the  owners  of  the  pipe-lines  and  refin- 
eries, supplemented  by  long-time  contracts  covering  the  pro- 
duction of  different  producers.  Under  this  act,  the  Secre- 
tary may  offer  the  royalty  oil  at  public  auction,  thus  encour- 
aging independent  or  competing  refineries;  or  he  may  sell  the 
royalty  oil  at  the  market  price  to  other  departments  of  the 
Government,  thereby  enabling  the  Government  to  use  its  por- 
tion of  the  production  to  meet  its  needs.  We  are  all  familiar 
with  the  heavy  demand  that  exists  at  present  for  fuel  oil. 
The  United  States  Shipping  Boasd  has  experienced  the  great- 
est difficulty  in  procuring  a  sufficient  supply  to  meet  the 
requirements  of  its  fleets.  Acting  under  this  provision  of 
the  act,  the  Secretary  of  the  Interior  has  already  entered  into 
a  year's  contract  to  sell  all  the  royalty  oil  coming  to  the  Gov- 
ernment, in  both  Wyoming  and  California,  except  that  from 
naval  reserves,  to  the  Shipping  Board.  This,  in  turn,  made 
possible  the  practical  handling  of  the  royalties  arising  from 
the  inland  fields.  The  Shipping  Board  has  already  entered 
into  contracts  whereby  the  Wyoming  Refineries  take  the  Ship- 
ping Board's  royalty  oil  at  the  well,  in  consideration  for  which 
the  refineries  deliver  agreed  quantities  of  fuel  oil  at  coast 
points  where  the  Shipping  Board  needs  it. 


392  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

Division  of  Proceeds 

One  of  the  problems  presented  by  the  act,  over  which  there 
was  much  discussion  and  diffence  of  opinion  in  Congress,  was 
the  division  of  the  proceeds  arising  from  its  operation.  This 
problem  was  intimately  related  with  the  contention  of  the 
States  that  any  leasing  system  which  contemplated  the  indefi- 
nite retention  in  the  Government  of  the  title  to  public  lands 
must  of  necessity  deprive  the  States  of  the  opportunity  to 
tax  such  lands  for  the  support  of  State  institutions.  It  was 
at  once  apparent  that  if  the  leasing  policy  was  to  be  inaugu- 
rated, the  States  in  which  the  lands  were  situated  must  have 
some  portion  of  the  proceeds  arising  from  operations  under 
such  leases  in  lieu  of  the  taxes  it  might  otherwise  levy.  But 
the  United  States  Reclamation  Service  since  1902  has  received 
the  entire  net  proceeds  arising  from  the  disposition  of  public 
lands.  Practically  all  the  public  lands  that  would  come  under 
the  leasing  act  were  situated  in  the  arid  States.  The  repre- 
sentatives of  the  Reclamation  Service  pointed  to  the  tre- 
mendous benefits  resulting  from  the  great  projects  that  had 
been  built,  resulting  in  heavy  increase  in  the  taxable  property 
of  the  arid  States;  they  pointed  to  the  further  fact  that  the 
Western  States  and  civic  organizations  were  clamoring  for 
Federal  aid  for  more  reclamation  projects,  despite  the  enor- 
mous drain  on  the  Federal  Treasury  resulting  from  the  war ; 
they  argued  that  the  indirect  benefits  to  the  Western  States 
by  using  the  proceeds  for  reclamation  purposes  would  exceed 
the  benefits  to  the  States  from  the  direct  use  of  such  funds. 
Then,  too,  it  appeared  that  the  Federal  Government  would  be 
put  to  considerable  expense  in  the  administration  of  the  act. 
All  of  these  considerations  led  to  the  compromise  which  we 
now  find  in  Section  35,  to  the  effect  that  10  per  cent,  of  all 
royalties  go  to  the  Government ;  that  70  per  cent,  of  past  pro- 
duction and  52!/2  per  cent,  of  future  production  is  appro- 
priated for  use  under  the  Reclamation  Act,  and  20  per  cent, 
of  past  production  and  37%  per  cent,  of  future  production 
shall  be  paid  over  directly  to  the  States  "for  the  construction 
and  maintenance  of  public  roads  or  for  the  support  of  public 
schools  or  other  public  educational  institutions."  In  addition 
to  this,  there  is  reserved  to  the  States  "the  right  to  levy  and 
collect  taxes  upon  improvements,  output  of  mines,  or  other 


THE   MINERAL  LEASING  ACT  393 

rights,  property,  or  assets  of  any  lessee  of  the  United  States." 
Thus  we  see  that  this  act  is  really  a  revolving  development 
and  improvement  proposition  as  well  as  a  so-called  conserva- 
tive measure,  and  that,  except  for  the  10  per  cent.,  the  West- 
ern States  in  which  the  lands  are  situated  will  receive,  directly 
or  indirectly,  all  the  proceeds  arising  from  operations  there- 
under. 

Detailed  Discussion  Impracticable 

Coming  now  to  the  specific  provisions  as  to  permits  and 
leases  and  the  restrictions  and  limitations  thereof,  I  am  a  lit- 
tle at  a  loss  to  know  how  extensively  I  should  go  into  it,  for, 
to  cover  the  subject  with  any  degree  of  thoroughness  would 
take  the  rest  of  the  time  of  all  the  sessions  of  this  meeting  of 
the  Mining  Congress.  Moreover,  many  of  these  details  would 
be  of  little  interest  to  a  general  audience.  I  understand  that 
some  sectional  conferences  will  be  held  where  these  features 
may  be  taken  up  and  questions  asked  if  desired.  I  shall  be 
glad  to  contribute  anything  I  can  in  that  way  that  will  be  at 
all  helpful,  for  I  am* well  aware  of  the  many  difficulties  that 
operators  have  experienced  in  their  endeavor  to  construe 
and  comply  with  the  act  and  the  regulations  thereunder,  and 
the  great  task  we  have  had  in  the  Department  in  construing 
and  applying  it.  I  will,  therefore,  sketch  very  briefly  the 
specific  provisions  with  respect  to  the  minerals  which  may  be 
leased. 

Coal 

As  to  coal,  the  act  provides:  First,  for  leases  for  not 
exceeding  2560  acres  for  an  indeterminate  period,  to  be 
granted  by  competitive  bidding  or  by  such  other  method  as 
may  by  general  regulations  be  provided;  second,  for  a  pros- 
pecting permit,  good  for  two  years,  for  prospecting  areas 
where  the  existence  or  workable  coal  has  not  already  been 
demonstrated,  the  prospector,  on  development  of  workable 
coal  within  the  period  of  his  permit,  having  a  preference 
right  to  a  lease;  and,  third,  the  act  provides  for  a  limited 
revocable  license  to  mine  coal,  without  the  payment  of  rent 
or  royalty  to  supply  domestic  needs  and  not  for  sale. 


394  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

Oil  and  Gas  Permits 

The  oil  and  gas  provisions  of  the  act  contemplate  two 
distinct  classes  of  land  which,  for  want  of  better  terms,  we 
will  refer  to  as  "proven  structures"  and  "wild-cat  lands." 
Proven  structures,  for  the  purposes  of  the  act,  are  those  pro- 
ducing structures,  the  boundaries  of  which  have  been  arbi- 
trarily and  specifically  designated  by  the  Government;  wild- 
cat lands  are  all  lands  outside  such  proven  structures.  This 
line  of  distinction  runs  all  through  the  oil  and  gas  provisions. 
Primarily,  the  act  provides  for  oil  and  gas  permits  on  wild- 
cat lands,  oil  and  gas  lease  on  proven  lands,  and  for  so-called 
relief  permits  and  leases  to  which  I  will  refer  later.  Prospect- 
ing permits  on  wild-cat  lands  are  granted  for  not  exceeding 
2560  acres  for  the  period  of  two  years.  The  permittee  must 
commence  operations  within  six  months,  must  sink  a  hole  500 
feet  during  the  first  year,  and  to  a  depth  of  2000  feet  or  to  oil 
during  the  life  of  the  permit  or  any  extension  thereof.  If  the 
permittee  strikes  oil  within  the  life  of  the  permit  he  is  then 
entitled  to  a  lease  of  a  flat  5  per  cent,  for  one-fourth  of  the 
area  of  the  permit  and  for  not  less  than  160  acres,  unless  the 
entire  area  of  the  permit  shall  be  less  than  160  acres.  As  to 
that  portion  of  the  permit  area  not  included  in  the  5  per  cent, 
lease,  the  permittee  is  given  a  competitive  preference  right 
at  a  royalty  of  not  less  than  12 %  per  cent.,  "the  royalty  to  be 
determined  by  competitive  bidding  or  fixed  by  such  other 
method  as  the  Secretary  may  by  regulations  prescribe."  The 
first  regulations  stated  this  provision  substantially  in  the  lan- 
guage of  the  statute.  It  has  been  the  subject  of  much  con- 
sideration and  criticism.  The  point  is  made  that  royalty  bid- 
ding is  always  an  unsatisfactory  method  of  awarding  a  lease, 
for  it  is  easy  for  one  to  make  bids  of  what  he  is  willing  to 
pay  out  of  future  production.  Again,  it  was  urged  that  for  a 
prospector  to  go  into  a  wild-cat  field  at  large  expense,  taking 
all  the  hazard  of  a  total  loss,  and  then,  if  he  finds  oil,  be  com- 
pelled to  bid  against  others,  who  may  thus  take  advantage  of 
his  discovery,  on  a  royalty  basis,  is  unfair  to  the  prospector 
and  not  conducive  to  his  taking  the  chance  and  going  into  the 
new  field.  Consequently,  in  the  new  regulations,  we  have 
provided  that  as  to  the  three-fourths  area,  the  Secretary  will 
fix  a  reasonable  royalty  at  which  the  permittee  will  be  given 


THE   MINERAL  LEASING  ACT  395 

an  opportunity  to  take  the  lease  of  the  land  or  leave  it,  so  that, 
as  a  practical  matter,  under  present  regulations,  the  permit- 
tee, if  his  exploration  work  is  successful,  gets  a  flat  5  per 
cent,  lease  on  one-fourth  of  the  area,  and,  if  he  wants  it,  a 
lease  on  the  balance  at  a  fair  royalty  fixed  by  the  Department. 

Preference  Right  of  Surface  Claimant 

While  discussing  the  subject  of  permits,  it  may  be  well  to 
refer  to  Section  20.  I  think  that  section  contains  a  sample 
of  every  iniquity  that  can  be  found  in  the  whole  act.  Without 
discussing  the  questionable  policy  of  disposing  of  mineral 
under  the  homestead  laws,  suffice  it  to  say,  that  this  section, 
as  finally  construed  and  interpreted,  grants  a  preference  right 
to  a  prospecting  permit  to  a  non-mineral  owner  or  entryman 
of  an  entry  made  prior  to  the  leasing  act  without  a  reserva- 
tion of  the  mineral  at  the  time  of  entry.  The  theory  of  this 
section  apparently  is  that  where  one  made  a  land  entry  with- 
out a  reservation  of  the  mineral  and  thereafter  was  con- 
fronted with  the  fact  that  he  could  only  get  the  surface,  for 
some  reason  or  other,  he  should'  have  a  preference  right  to  an 
oil  permit. 

Leases  By  Competitive  Bidding 

Straight  leases  under  the  act  are  provided  for  by  Section 
17.  They  apply  only  to  lands  in  proven  structures.  They 
will  be  granted  as  the  result  of  competitive  bidding  on  a  bonus 
basis.  Notice  will  be  given  that  at  such  a  time  a  lease  on 
described  land  will  be  offered  at  a  fixed  royalty  and  awarded 
to  the  highest  responsible  bonus  bidder.  Thus  far,  we  have 
been  unable  to  offer  any  proven  lands  for  lease  under  this  sec- 
tion, for  the  reason  that  practically  all  proven  lands  are  cov- 
ered with  some  sort  of  claim  under  the  relief  sections  to  which 
I  will  later  refer.  In  the  course  of  a  short  time,  however, 
these  claims  will  be  cleared  up,  when  we  will  know  what,  if 
any,  lands  in  proven  structures  the  Government  has  left  to 
lease  by  competitive  bidding. 

Conflicting  Views  As  to  Relief 

This  brings  me  to  the  relief  provisions,  that  is  to  say,  provi- 
sions of  the  act  for  the  adjustment  of  the  controversy  with 
the  existing  claimants,  to  which  I  have  heretofore  referred, 
and  to  bridge  over  the  gap  from  the  old  law  to  the  new  law. 


396  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

As  before  stated,  the  problem  presented  by  the  relief  claim- 
ants was  much  more  difficult  of  solution  than  was  the  matter 
of  mapping  out  a  general  future  leasing  policy.  The  rights 
and  equities  of  the  claimants  and  the  treatment  which  should 
be  accorded  them  were  the  subject  of  a  wide  difference  of 
opinion  in  and  out  of  Congress.  Among  some  there  was  a 
disposition  to  view  the  oil-land  claimants  whose  rights  had 
been  cut  off  by  the  withdrawals  as  rank  trespassers  who 
should  be  given  nothing  except  what  a  strict  interpretation 
and  application  of  the  law  would  allow  them,  and  who  had 
already  been  given  everything  that  they  were  entitled  to  in 
the  way  of  equitable  consideration  by  the  so-called  "Pickett 
Act"  of  June  25,  1910.  On  the  other  extreme  the  conten- 
tion was  made  that  the  oil-land  claimants  were  merely  the 
unfortunate  victims  of  the  withdrawal,  the  legality  of  which 
was  seriously  questioned  by  good  lawyers  and  some  courts 
at  the  time ;  that  at  large  expense  they  had  developed  proper- 
ties of  great  value  by  the  acceptance  of  the  Government's 
offer  expressed  through  the  mining  law,  and  that  as  a  result 
they  should  be  placed  in  identically  the  same  status  that  they 
would  have  been  had  there  been  no  withdrawal  made,  with  the 
right  to  absolute  patent.  It  was  clear  that  neither  of  these 
extreme  views  could  prevail.  A  reasonable  middle  ground 
must  be  found,  and  that  ground  must  be  such  that  not  only 
would  it  effect  a  fair  compromise  of  the  contention  stated, 
but  which  would,  when  finally  worked  out,  place  the  oil  pro- 
duction business  on  a  better  basis  and  in  harmony  with  the 
general  scheme  of  the  proposed  new  legislation.  Many  at- 
tempts were  made  to  classify  the  claimants  in  the  various 
groups  on  the  basis  of  their  relative  rights  and  equities. 

Possibility  of  fraud. 

Of  course,  these  classifications  were  always  unsatisfactory  to 
those  who  would  thereby  be  cut  out  or  reduced  in  the  amount 
and  character  of  relief  to  be  received.  The  oil  men  were  by 
no  means  unanimous  on  the  kind  of  legislation  they  wanted 
which  it  was  possible  for  them  to  get ;  finally  they  became  con- 
vinced that  the  only  thing  to  do  was  to  leave  it  to  Congress 
and  take  what  they  could  get  without  further  advocacy  of 
their  various  interests.  The  question  of  fraud,  actual  or  con- 
structive, was  involved  in  all  these  considerations,  as  a  result 


THE   MINERAL   LEASING  ACT  397 

of  which  we  find  in  every  relief  section  a  strict  anti-fraud 
clause  providing  that 

"No  claimant  for  a  lease  who  has  been  guilty  of  any 
fraud  or  who  had  knowledge  or  reasonable  grounds  to 
know  of  any  fraud,  or  who  had  not  acted  honestly  and 
in  good  faith  shall  be  entitled  to  any  of  the  benefits  of 
this  section." 

It  will  be  noted  that  this  anti-fraud  clause  differs  somewhat 
from  the  general  principles  applicable  to  fraud  in  the  loca- 
tion of  mining  claims,  in  that  under  the  mining  law  an  inno- 
cent purchaser  in  fact  of  a  fraudulent  location  is  not  pro- 
tected, whereas  under  this  act  he  is  protected,  though  doubt- 
less the  language  I  have  quoted  is  more  strict  against  an 
innocent  purchaser  than  are  the  general  principles  of  real 
property  law  on  this  subject. 

Conditions  For  Relief  Under  Section  18 

The  principal  relief  sections  are  18,  19  and  22,  the  last  of 
which  is  applicable  only  to  Alaska.  Section  18  applies  only  to 
lands  in  .the  withdrawals  of  September  27,  1909,  and  is, 
therefore,  the  section  that  is  applicable  to  the  valuable 
developed  properties.  The  principal  conditions  for  relief 
under  Section  18  are  these:  (a)  The  land  must  be  included  in 
the  executive  order  of  withdrawals  of  September  27,  1909; 
(b)  the  claim  on  which  the  right  to  relief  is  predicated  must 
have  been  initiated  under  the  placer  mining  laws  prior  to  July 
3,  1910 ;  (c)  the  claimant  must  have  drilled  an  oil  or  gas  well 
on  the  claim  to  discovery;  (d)  the  claimant  must,  within  six 
months  from  the  date  of  the  act,  relinquish  his  claim  under 
the  mining  law  to  the  Government;  (e)  the  claimant  must 
pay  the  Government  one-eighth  of  the  value  at  the  time  of  pro- 
duction of  all  oil  and  gas  produced  up  to  the  date  of  filing 
the  relinquishment  and  application  for  relief. 

Relief  Granted  Under  Section  18 

The  relief  granted  under  Section  18  is  of  two  classes:  If 
the  land  is  not  in  naval  reserve,  the  claimant  who  is  entitled 
to  relief  gets  a  20-year  lease  under  the  general  provisions  of 
the  act  at  a  royalty  fixed  by  the  Secretary  of  the  Interior,  but 
not  less  than  12%  per  cent.  If  the  land  is  in  a  naval  reserve, 
then  the  relief  claimant  is  entitled  only  to  a  lease  on  the  pro- 


398  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

ducing  wells  which  he  has  drilled,  provided  that  permission 
to  drill  additional  wells  may  be  granted  by  the  President. 
Thus  it  will  be  seen  that,  speaking  generally,  the  theory  of 
relief  under  Section  18  is  that  the  claimant  settles  for  his  past 
production  on  the  basis  of  an  innocent  trespass,  computed  by 
a  very  liberal  rule  of  damages,  and  becomes  a  lessee  of  the 
Government  for  future  operations. 

Relief  Under  Section  19 

Section  19  performs  a  double  function.  It  provides  a  basis 
of  relief  for  claimants  affected  by  other  withdrawals  than  that 
of  September  27,  1909,  and  also  provides  a  basis  of  relief  for 
those  claimants  who  had  expended  some  money  in  the  explor- 
ation of  unwithdrawn  lands,  but  who  had  not  made  discovery 
at  the  date  this  act  would  otherwise  have  cut  them  off  by  the 
repeal  of  the  placer  law.  Omitting  details,  this  section  pro- 
vides that  one  who  initiated  an  oil  placer  location  on  public 
lands  when  same  were  not  withdrawn,  and  who  has  subse- 
quently complied  with  all  the  requirements  of  the  placer  law 
except  to  make  discovery,  and  has  performed  work*  or  made 
improvements  on  the  claim  to  the  extent  of  $250,  may  have 
a  relief  prospecting  permit  if  he  has  not  yet  made  discovery, 
or  if  he  has  made  discovery  he  may  have  a  relief  lease.  If 
the  land  is  in  a  proven  structure,  the  lease  granted  will  be  at 
a  royalty,  fixed  by  the  Secretary  at  not  less  than  12%  per 
cent.  If  the  permit  granted  is  in  "wild-cat"  territory,  the 
permit  is  subject  to  the  same  conditions  and  followed  by  the 
same  reward  for  discovery  as  if  granted  under  Section  13 
of  the  act.  One  important  provision  of  Section  19  is  that  the 
claimant  in  such  a  case  must  not  be  entitled  to  relief  under 
Section  18,  but  it  does  not  follow,  under  the  construction  of 
the  Department,  that  lands  in  the  September  27,  1909,  with- 
drawal may  not  be  the  subject  of  relief  under  Section  19.  Sec- 
tion 19  is  not  applicable  to  naval  reserves  at  all. 

Alaskan  Provisions 

The  provisions  of  Section  22  for  Alaska  are  substantially 
the  same  as  those  for  the  States,  except  for  a  variation  in 
the  periods  of  time  within  which  the  various  steps  must  be 
taken  and  the  areas  that  may  be  embraced  in  the  permits  and 
leases. 


THE   MINERAL  LEASING  ACT  309 

Relief  By  Compromise  Agreement 

Section  18a  may  also  be  deemed  a  relief  section.  In  brief, 
it  authorizes  the  President  to  adjust  any  claim  for  relief  in 
the  September  27,  1909,  withdrawal,  the  validity  of  which  has 
been  drawn  into  question  in  most  any  way  he  and  the  claim- 
ants may  agree.  Primarily,  this  section  was  designed  to 
place  in  the  President  authority  to  re-segregate  lands  within 
naval  reserves,  to  the  end  that  the  Government  might  pro- 
cure thereby  a  solid  block  of  producing  land  in  which  the  oil 
could  be  held  in  the  ground  indefinitely  if  desired.  A  number 
of  claimants  have  made  application  under  Section  18a,  prob- 
ably in  the  belief  that  they  could  get  quicker  action  under  that 
section,  and  thus  far,  where  relief  has  been  granted  under 
Section  18a,  in  nearly  every  case  it  has  been  on  the  same  basis, 
as  under  Section  18. 

Conflicting  Claims  and  Contractual  Interests 

An  aspect  of  the  relief  claims  under  which  a  multitude  of 
questions  have  arisen  is  that  of  adverse  and  conflicting  claims, 
and  various  contractual  interests  in  claims  of  every  class  and 
description.  The  only  specific  provisions  in  the  act  on  this 
subject  are  found  in  Sections  18  and  19;  that  in  Section  18 
reading  as  follows: 

"In  case  of  conflicting  claimants  for  leases  under  this 
section,  the  Secretary  of  the  Interior  is  authorized  to 
grant  leases  to  one  or  'more  of  them  as  shall  be  deemed 
just.  All  leases  hereunder  shall  inure  to  the  benefit  of 
the  claimant  and  all  persons  claiming  through  or  under 
him  by  lease,  contract,  or  otherwise,  as'  their  interests 
may  appear,  subject,  however,  to  the  same  limitations  as 
to  the  area  and  acreage  as  is  provided  for  claimant  in 
this  section." 

It  will  be  noted  that  this  language  presents  two  distinct 
classes  of  claims :  First,  those  which  are  entirely  adverse  and 
conflicting  and  having  a  different  origin,  that  is,  the  ordinary 
case  of  conflicting  mining  claims  where  two  or  more  persons 
claim  the  right  to  possession  of  the  same  ground  under  sepa- 
rate and  different  locations.  The  other  class  is  not  strictly 
an  adverse  or  conflicting  claim,  but  rather  a  claim  of  one  who 
is  entitled  to  a  contractual  interest  or  benefit  in  the  same 
claim  on  which  application  is  being  made  for  relief.  Settle- 


400  PROCEEDINGS   OF   AMERICAN   MINING  CONGRESS 

ment  and  disposition  of  the  first  class  is  entirely  within  the 
jurisdiction  of  the  Land  Department,  and  in  this  connection 
the  Department  holds  that  an  adverse  or  conflicting  claimant, 
to  have  his  claim  considered  at  all,  must  either  present  a  com- 
plete claim  for  relief  in  his  own  behalf,  or  must  show  a  supe- 
rior right  to  the  land  under  some  other  public-land  law.  The 
provision  covering  the  second  class  was  inserted  in  the  act  by 
reason  of  the  fact  that  oil  properties  were  commonly  held 
and  worked  under  various  forms  of  leases  and  development 
contracts.  Under  the  act  the  party  whom  the  Government 
considers  entitled  to  relief  is  the  one  who  turns  in  the  legal 
title.  But  to  take  an  ordinary  case:  Suppose  another  party 
is  operating  the  land  under  lease,  and  perhaps  has  a  much 
larger  investment  than  the  party  holding  the  legal  title.  To 
remove  any  doubt  as  to  the  possibility  of  the  holder  of  th'e 
legal  title  procuring  relief  to  the  exclusion  of  the  lessee,  or 
those  holding  other  contractual  interests,  this  provision  was 
inserted  to  enable  the  persons  holding  such  contractual  inter- 
ests to  protect  their  rights  in  the  courts.  The  Land  Depart- 
ment will  not,  ordinarily,  concern  itself  with  the  determina- 
tion of  such  interests,  which  range  all  the  way  from  grub- 
stake contracts  to  heirship,  but  when  determined  by  courts 
of  competent  jurisdiction  they  will  be  duly  recognized  by 
the  Land  Department.  In  practice,  in  most  cases  where  such 
contractual  interests  exist,  all  the  parties  have  adjusted  their 
relative  interests  among  themselves  and  joined  in  the  applica- 
tions for  relief.  Some  idea  may  be  gained  of  the  importance 
of  these  questions  and  the  difficulties  arising  thereunder  from 
the  fact  that  probably  four-fifths  of  the  Salt  Creek  field  in 
Wyoming  has  been  covered  by  applications  for  relief  by  from 
two  to  five  claimants. 

The  matter  of  conflicts  generally  with  various  non-mineral 
applications,  locations,  selections  and  entries  under  other 
public-land  laws,  gives  rise  to  numerous  complicated  ques- 
tions which  I  shall  not  attempt  to  go  into  in  this  general  talk. 
Oil-Shale 

An  important  section  of  the  act  is  that  relating  to  oil-shale, 
the  deposits  of  which  are  supposed  to  contain  an  almost 
unlimited  reserve  supply  of  oil  to  meet  the  world's  necessities 
when  the  supply  in  the  earth  in  ordinary  liquid  form  becomes 
exhausted  or  greatly  depleted.  The  issuance  of  numerous 


THE   MINERAL  LEASING  ACT  401 

official  and  unofficial  reports  disclosing  the  enormous  pro- 
spective value  of  oil-shales  led  at  once  to  the  widespread  loca- 
tion of  such  deposits  under  the  mining  law,  and  the  use  of 
such  locations  as  the  basis  of  all  manner  of  promotions — 
fake  and  otherwise — and  as  a  means  of  getting  money  out  of 
the  unsuspecting  public.  There  is  no  doubt  about  the  oil 
being  in  the  shale,  and  little  doubt  that  it  will  ultimately  be 
extracted  on  a  commercial  basis,  but  from  all  I  can  learn  as  to 
the  progress  that  has  been  made  in  this  country  in  the  develop- 
ment of  processes  of  reduction,  this  industry  must  be  con- 
sidered as  yet  in  an  entirely  experimental  stage.  The  pre- 
liminary investigations  we  have  made  disclose  the  fact  that, 
to  a  large  extent,  the  oil-shale  placer  locations  have  been  made 
for  the  purpose  only  of  getting  something  to  sell.  By  this 
statement  I  do  not  mean  to  discredit  in  any  way  several  con- 
cerns that  are  proceeding  along  legitimate  lines  with  the  best 
engineering  and  chemical  advice  to  work  out  this  oil-shale 
problem ;  in  fact,  they  are  deserving  of  much  credit  for  their 
pioneer  work.  The  provisions  of  the  leasing  act  applicable  to 
oil-shale  are  designed  to  give  every  possible  encouragement 
to  real  development,  and  the  Department  is  disposed  to  co- 
operate in  every  reasonable  and  proper  way  in  the  aid  of  such 
enterprises.  As  to  the  shale  locations,  the  Department  has 
ruled  that  where  they  are  in  all  respects  legal  and  regular, 
they  may  go  to  patent,  but  knowing  the  general  character 
of  these  locations  it  follows  that  claimants  seeking  patent  to 
such  claims  must  come  strictly  within  the  law,  and  it  seems 
to  us  that  in  the  long  run  it  would  be  preferable  for  those  who 
contemplate  good  faith  development  on  a  large  scale  to  trans- 
mute their  claims  into  a  lease  as  they  are  authorized  to  do 
under  the  act. 

Phosphate  and  Sodium 

Thus  far  though  there  has  been  some  activity  looking  to 
securing  phosphate  and  sodium  leases,  they  are  so  few  that 
I  will  not  take  the  time  now  to  discuss  the  provisions  of  the 
act  relating  thereto. 

Operations  Under  the  Leasing  Act 

In  conclusion,  let  us  note  for  a  moment  the  activity  that  has 
taken  place  under  this  act  since  February  25,  1920.  On  that 


402  PROCEEDINGS   OF   AMERICAN  MINING  CONGRESS 

day,  both  in  the  Washington  office  and  in  numerous  local  of- 
fices, we  commenced  to  get  applications  for  permits  and  leases, 
particularly  for  oil  in  great  numbers.  Such  applications  as 
came  in  before  the  regulations  were  available,  no  matter  in 
what  form,  were  returned  to  the  applicants  who  were  given 
opportunity  to  file  a  new  application  in  accordance  with  the 
regulations.  Our  records  show  that  since  the  passage  of  the 
act  there  have  been  filed  over  7500  applications  of  all  classes 
and  descriptions.  True;  many  of  them  were  in  conflict  and 
many  were  abandoned.  Probably  5000  or  6000  are  being 
seriously  followed  up.  We  have  already  taken  action  on  about 
2700  applications  for  oil  prospecting  permits,  and  more  than 
600  permits  have  already  been  granted.  In  fact,  under  at 
least  one  permit  oil  has  already  been  discovered,  and  applica- 
tion for  lease  filed;  under  the  Section  18  relief  provision,  my 
last  figures  showed  that  an  aggregate  of  $8,633,524  (Cali- 
fornia, $6,488,207;  Wyoming,  $2,145,317)  had  been  tendered 
the  Government  either  in  cash  or  secured  by  satisfactory 
bonds  in  payment  of  back  royalties.  There  are  only  a  few 
cases  of  claimants  who  were  in  litigation  with  the  Govern- 
ment who  have  failed  to  avail  themselves  of  the  relief  provi- 
sions of  the  act.  We  feel,  therefore,  that  we  are  beginning 
to  see  the  dawn  of  a  new  day  in  the  development  and  opera- 
tion of  the  public  mineral  lands  affected  by  this  legislation. 


THE  KANSAS    INDUSTRIAL    LAW  403 

THE  KANSAS  INDUSTRIAL  LAW 

By  Senator  F.  DUMONT  SMITH,  Hutchinson,  Kansas. 

No  one  knows  the  exact  authorship  of  this  law.  I  had  some- 
thing to  do  with  it,  and  my  presence  here  is  due  to  the 
fact  that  I  collaborated  in  the  preparation  of  the  bill.  The 
growing  interest  in  this  Kansas  experiment  has  caused  many 
demands  upon  the  time  of  Governor  Allen,  and  it  has  fallen 
upon  me  to  fill  some  of  his  dates.  That  is  the  reason  why  he 
sent  me  here  tonight.  I  know  more  as  a  lawyer,  perhaps, 
about  the  legal  phases  of  this  law  than  Governor  Allen,  but 
if  he  were  here  tonight,  he  could  add  a  human  touch  to  its 
history.  I  suppose  that  all  of  you  are  more  or  less  familiar 
with  its  origin.  About  a  year  ago  there  was  a  general  strike 
in  the  bituminous  coal  mines  of  the  country,  and  we  had  our 
own  special,  individual  and  peculiar  strike  in  Kansas.  We 
have  a  man  there  named  Alexander  Howatt,  who  is  the  "boss" 
of  that  large  district,  comprising  the  bituminous  mines  of 
Kansas,  Oklahoma  and  Arkansas.  He  has  the  distinction  of 
having  called  304  strikes  in  30  months,  of  which  300  involved 
broken  contracts,  solemnly  made.  The  people  of  Kansas  were 
freezing,  and  industry  slowed  down.  Governor  Allen  pro- 
ceeded to  take  possession  of  the  mines  under  a  receivership, 
called  out  the  militia,  and  called  upon  volunteers  to  work 
these  mines.  They  were  amateurs,  but  they  produced  enough 
coal  to  keep  the  people  warm  until  the  strike  was  broken.  Out 
of  that  condition  grew  the  Kansas  Industrial  Court  Law. 

Controversies  Considered  Not  Actionable 

At  the  outset  we  were  met  by  the  legal  jurists,  who  tell  us 
that  the  controversies  are  not  "justiciable,"  that  is,  such  dis- 
putes are  not  actionable  in  the  ordinary  courts,  like  the  Dis- 
trict Courts  in  Colorado.  We  admit  that,  but  this  Industrial 
Court  is  not  a  court.  We  call  it  a  court,  but  the  name  means 
nothing.  It  is  simply  an  administrative  body  exercising  a 
certain  portion  of  the  police  power  of  the  State. 

We  were  confronted  with  the  problem  whether  to  make 
this  a  real  court,  or  whether  we  should  make  it  an  administra- 


404  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

live  body.  But  there  is  this  distinction  that  the  ordinary 
layman  perhaps  does  not  appreciate  between  a  court  and  an 
administrative  body.  A  court  cannot  move  until  its  process 
is  invoked  by  an  appropriate  formula.  On  the  other  hand, 
this  administrative  body  moves  of  its  own  initiative.  It  re- 
quires no  complaint.  It  can  move  upon  suspicion;  it  has 
broad  inquisitorial  powers;  that  is,  it  may  go  out  and  sub- 
poena witnesses  and  put  them  under  oath,  and  compel  them 
to  testify  and  to  produce  books  and  papers.  So,  while  there 
are  advantages  in  having  a  real  court,  we  decided  that  be- 
cause you  cannot  confer  administrative  functions  upon  a 
court,  you  can  confer  judicial  powers  upon  an  administrative 
body,  and  we  chose  the  administrative  body.  Police  power, 
which  is  so  effective,  is  the  power  under  which  we  have  estab- 
lished the  Industrial  Court. 

Public  Health  and  Peace 

But  the  two  great  functions  of  police  power  are  the  safe- 
guarding of  public  health  and  the  preservation  of  public  peace. 
You  have  an  Industrial  Commission  in  the  Esch-Cummins 
bill;  they  have  tried  compulsory  arbitration  in  New  Zealand, 
Australia,  and  in  some  of  the  provinces  of  the  Dominion  of 
Canada,  but  they  have  been  more  or  less  failures  because  they 
have  not  been  founded  upon  these  two  fundamental  rocks  of 
the  power  of.  the  public  to  protect  health  and  to  preserve  its 
peace.  There  are  other  faults  with  arbitration,  but  the  prin- 
cipal vice  of  arbitration  is  that  its  final  conclusion  does 
not  establish  the  justice  of  the  controversy.  It  marks  simply 
the  farthest  line  that  the  weakest  party  to  the  controversy 
will  go  to  end  the  existing  dispute.  It  is  the  peace  of  victory, 
imposed  by  the  stronger  party  upon  the  weaker.  The  Kansas 
law  starts  by  declaring  that  food,  fuel  and  clothing  are  the 
necessities  of  human  life.  It  merely  recognizes  an  existing 
fact,  not  making  it  a  legislative  fiat,  but  this  is  one  of  the 
foundation  stones  of  the  Kansas  Industrial  Court  law.  This 
law  says,  whenever  any  strike  is  threatened,  or  a  combination 
of  men  threaten  to  strike,  which  shall  impair  the  production 
or  distribution  of  these  three  necessities  of  life  so  as  to  en- 
danger the  public  health,  the  State  shall  intervene  through 
the  Industrial  Court.  Then  it  begins  to  function. 

Some  of  the  powers  of  the  court  are  doubted  by  lawyers, 


THE  KANSAS  INDUSTRIAL  LAW  405 

but  if  they  examine  the  bill  they  will  find  that  every  separate 
power  of  this  court  is  segregated  and  set  apart  in  a  separate 
section,  so  that  if  the  United  States  Supreme  Court,  beyond 
which  there  is  no  appeal,  should  decide  that  this  power  or 
that  power  is  beyond  the  constitutional  limits  of  the  State,  all 
the  other  powers  would  remain.  But  even  if  we  had  only  the 
inquisitorial  powers,  its  powers  to  investigate  the  dispute  and 
tell  the  truth  about  it,  that  would  be  worth  the  cost. 

Results  From  the  New  Law 

Before  this  law  went  into  effect,  Kansas  had  one  strike 
after  another,  but  in  10  months  there"  hasn't  been  one  strike. 
During  the  outlaw  switchmen's  strike  in  May,  in  the  Kansas- 
Missouri  section  the  men  were  out  in  Missouri,  but  in  Kan- 
sas they  did  not  dare  strike  because  of  this  law.  The  local 
switchmen  at  Topeka  and  the  local  trackmen's  association  have 
apealed  to  this  court,  and  a  number  of  other  union  labor  bodies 
have  appealed  directly  to  it.  They  have  been  satisfied  with  its 
award,  and  have  expressed  their  approval.  The  court  is  grad- 
ually gaining  the  confidence  of  the  workingmen,  as  well  as  the 
employer,  not  because  it  is  the  workingman's  friend. 

It  has  been  said  that  like  all  other  arbitration,  this  will  fail. 
The  public  is  never  considered.  In  the  great  debate  by  Sam- 
uel Gompers  and  Governor  Allen  in  New  York,  the  latter 
asked  the  former,  where  there  is  a  dispute  between  labor  and 
capital  that  threatens  a  strike  that  decreases  the  production 
or  distribution  of  the  necessities  of  life,  or  threatens  a  breach 
of  the  public  peace,  has  the  general  public  any  rights  in  that 
controversy?  Mr.  Gompers  has  not  answered  that  question 
yet,  and  no  one  has  answered  it  yet,  because  if  he  had  said 
we  had  no  rights,  he  would  have  brought  upon  himself  the 
condemnation  of  the  general  public.  If  he  admitted,  as  he 
must  honestly  do,  that  we  have  a  right  in  it,  then  he  would 
admit  the  right  of  some  sort  of  a  court  representing  the  gen- 
eral public — the  whole  State — to  f  unction  -  in  these  disputes. 
We  in  Kansas  say  there  is  nothing  unique  in  these  disputes, 
between  labor  and  capital.  They  are  to  be  judged  by  the 
same  principles  of  right  and  justice  as  every  other  dispute 
between  man  and  man,  so  we  have  established  there  a  court 
of  distinguished  men,  paid  an  a4equate  salary,  with  long  terms, 
not  dependent  upon  popular  favor,  functioning  all  the  time, 


406  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

with  the  door  swinging  with  every  touch  of  labor  or  capital. 
We  have  gone  further  than  that.  We  have  said  to  the  labor- 
ing man :  "If  you  have  a  complaint,  if  your  hours  are  too  long 
or  your  wages  too  low,  or  labor  conditions  bad,  write  a  letter 
to  this  Industrial  Court,  and  the  attorney  for  the  court  will 
file  your  complaint  without  a  cent  of  expense  to  you;  the 
court  will  have  its  experts  investigate  these  conditions  with- 
out any  expense  to  you;  your  employer  will  be  cited  to  the 
bar  of  that  court  to  defend  himself,  and  an  order  will  be 
made,"  and  very  gradually  the  laboring  man  is  beginning  to 
believe  in  this  court. 

In  Kansas  we  recognize  the  fact  that  it  is  only  by  labor 
combinations,  chiefly  by  strikes,  that  labor  has  brought  itself 
out  of  the  long  night  of  servitude  and  has  come  out  into  the 
full  light  of  manhood.  We  refused  to  outlaw  the  strike  or 
to  condemn  it  until  we  had  given  the  laboring  man  a  forum 
where  he  could  go  with  his  grievance  and  get  redress. 


THE  U.  S.  GEOLOGICAL  SURVEY  407 


GEOLOGY  AND  METAL  MINING,  WITH  PARTICULAR 

REFERENCE   TO  THE   WORK   OF  THE 

U.   S.   GEOLOGICAL   SURVEY 

By  F.  L.  RANSOME 

The  work  of  the  Geological  Survey  that  pertains  particu- 
larly to  metal  mining  falls,  for  the  most  part,  into  four  main 
classes.  These  are  (1)  detailed  geologic  work  in  well- 
developed  mining  districts  ;  (2)  preliminary  or  reconnais- 
sance geologic  work  in  newly  .opened  and  slightly  developed 
districts;  (3)  summary  reports  on  the  geology  and  ore  de- 
posits of  entire  States,  and  (4)  statistics  of  metal  production. 
There  has  been  and  probably  will  continue  to  be  some  kinds 
of  work  done  that  do  not  come  under  any  of  these  groups ;  the 
classification  is  not  intended  to  be  exhaustive.  Examples  of 
the  first  class,  detailed  work  in  developed  districts,  are  the 
well-known  Leadville  monograph  and  the  professional  papers 
on  the  Cripple  Creek,  Clifton,  Coeur  d'Alene,  Ely,  Ray  and 
Miami  and  Bisbee  districts.  Examples  of  the  second  class, 
preliminary  work  in  new  districts,  are  less  numerous  and  per- 
haps less  well  known.  Among  them  may  be  mentioned,  how- 
ever, some  of  the  early  reports  on  Goldfield,  Tonopah  and 
other  districts  in  Nevada,  including  one  now  in  press  [issued 
Feb.,  1921]  on  Divide,  and  one  in  preparation  on  the  Simon 
district,  both  in  Nevada.  Examples  of  the  third  class,  the 
State  reports,  are  the  professional  papers  on  the  geology  and 
ore  deposits  of  New  Mexico  and  Utah.  Other  similar  reports 
are  in  preparation  for  Arizona  and  Idaho,  but  the  one  for  the 
latter  has  unfortunately  been  set  back  indefinitely  by  the  resig- 
nation and  separation  from  the  service  of  the  geologist  who 
was  engaged  upon  it.  The  fourth  class  is  represented  by  the 
well-known  annual  statistical  reports  on  each  metal. 

It  is  my  purpose  to  speak  particularly,  but  briefly,  about 
the  first  two  classes  of  work  and  to  try  to  show  the  essential 
relation  between  them. 

Both  Developed  and  New  Districts  Should  Be  Studied 

Men  dealing  with  the  practical  side  of  mining,  especially 
those  interested  in  prospecting  and  legitimate  promotion, 


408  PROCEEDINGS   OF   AMERICAN   MINING  CONGRESS 

have  sometimes  been  inclined  to  find  a  little  fault  with  the 
Geological  Survey  for  giving  so  much  attention  to  the  study 
of  developed  districts,  and  have  suggested  that  more  emphasis 
should  be  laid  on  the  study  of  new  districts,  in  order  that  the 
results  might  be  available  to  guide  those  engaged  in  prospect- 
ing and  development.  I  strongly  believe  that  both  kinds  of 
work  should  be  done,  and  I  hope  in  the  present  address  to 
present  the  case  for  each,  so  that  the  mining  man  can  see  that 
the  second  type  of  work  cannot  be  pursued  successfully  if  the 
first  type  be  neglected. 

There  can  be  no  question  that  to  the  mining  geologist,  the 
study  of  a  district  at  the  height  of  its  activity  is  far  more 
interesting  and  gives  him  greater  opportunities  than  does  the 
study  of  one  in  which  mining  has  barely  begun.  The  de- 
veloped district,  with  its  miles  of  underground  working, 
enables  him  not  only  to  study  the  rocks  visible  at  the  surface, 
but  to  examine  them  at  various  depths,  and  to  make  out  their 
structure  far  more  satisfactorily  than  can  ordinarily  be  done 
from  the  surface  alone.  The  mines  in  such  a  district  permit 
him  to  see  the  ore  bodies  themselves,  not  merely  their  out- 
crops, and  to  study  the  variations  in  their  form  and  character 
at  various  depths  and  in  different  kinds  of  rock.  He  is  able 
to  trace  the  changes  from  the  original  ore,  perhaps  through  a 
zone  of  enrichment,  to  the  oxidized  material  that  appears  at 
the  surface,  or  vice  versa.  It  is  often  possible  to  determine 
the  extent  to  which  these  successive  changes  in  the  ore  have 
been  determined  or  controlled  by  rock  structures  or  other 
geologic  features,  and  to  predict  the  probable  changes  that 
will  be  "found  to  take  place  at  certain  approximate  depths  in 
deposits  that  have  not  yet  been  fully  developed,  using  this 
word  in  the  mining  sense.  In  most  districts,  faulting  has 
played  a  very  important  part  in  directing  the  original  deposi- 
tion, and  in  modifying  the  original  shape  and  position  of  the 
deposits.  Unfortunately  it  is  seldom  possible  to  work  out  a 
fault  complex  from  surface  exposures  alone.  A  certain 
amount  of  mining  must  be  done  before  the  rock  structure  can 
be  satisfactorily  determined,  and  although  the  knowledge 
gained  from  the  earlier  mine  workings  usually  throws  suffi- 
cient light  upon  the  geologic  structure  to  help  those  who 
come  after,  it  is  rare  indeed  that  mine  development  in  any 
district  reaches  such  a  stage  that  the  rock  structure  can  be 


THE  U.  S.  GEOLOGICAL  SURVEY  409 

said  to  be  completely  understood.  Each  section  of  under- 
ground exploration  adds  something  new,  and  the  possibility 
of  mistakes  in  development,  while  continually  lessened,  is 
never  wholly  eliminated. 

Geology  of  Developed  Areas  of  Value  for  Future  Work 

For  the  geologist,  the  developed  district  is  the  great  school 
of  experience  in  which  he  learns  about  orebodies.  It  is  there 
that  he  gathers  most  of  his  facts  concerning  the  geology  of 
ores,  and  it  is  from  the  facts  so  gathered  that  he  has  gained 
such  knowledge  as  we  now  possess  concerning  the  origin  and 
character  of  ore  deposits.  It  is  from  studies  in  developed 
districts  that  geologists  learn  what  outcrops  mean,  and  what 
may  be  expected  beneath  them.  To  suppose  that  geologists 
without  experience  in  deep  mines  could  be  of  much  use  in 
aiding  in  the  development  of  a  new  district  is  much  like 
expecting  a  man  to  become  at  once  a  skilled  surgeon  without 
previous  experience  in  the  dissecting-room. 

Lest  I  should  seem  to  lay  too  much  stress  upon  the  edu- 
cational value  to  geologists  of  work  in  developed  districts, 
I  wish  to  point  out  also  a  few  of  the  obviously  practical 
results  of  such  work.  The  value  to  mining  engineers  of  a 
generally  reliable  account  of  the  geology  and  ore  deposits 
of  a  region  in  some  part  of  which  they  expect  to  carry  out 
some  special  and  perhaps  detailed  piece  of  professional  work 
is  generally  acknowledged.  They  may  in  the  course  of  their 
work  bring  out  new  facts  or  may  perhaps  detect  actual  errors 
in  the  work  of  the  Government  geologist,  who,  of  course,  is 
not  infallible,  but  the  main,  purpose  of  the  earlier  work,  so 
far  as  they  themselves  are  concerned,  will  have  been  fulfilled 
if  it  gives  them  a  good  foundation  upon  which  to  start  or  a 
faithful  outline  into  where  they  can  here  and  there  supply  the 
details. 

It  may  be  remembered  also  that  in  most  developed  districts 
that  are  still  active  there  is  much  prospecting  going  on  in 
addition  to,  as  well  as  in  connection  with,  the  larger  mines. 
A  good  geologic  report  on  such  a  district  is  probably  more 
directly  useful  to  the  prospectors  within  it  than  would  be  a 
report  on  a  new  district  to  those  engaged  in  its  initial  develop- 
ment. 

Finally,  a  geologic  report  on  a  developed  district  does  not 


410  PROCEEDINGS   OF   AMERICAN    MINING   CONGRESS 

by  any  means  indicate,  as  some  humorists  would  make  us 
believe,  that  the  wheels  of  material  progress  in  that  district 
will  soon  give  a  final  groan  and  come  to  rest.  From  examples 
most  familiar  to  me,  I  cite  Bisbee  and  the  Coeur  d'Alene  as 
districts  where  growth  has  continued  long  after  the  appear- 
ance of  the  Geological  Survey  reports  that  were  based  upon 
observations  made  in  an  advanced  stage  of  their  development 
and  where,  in  consequence,  the  reports,  although  now  more  or 
less  obsolete  as  regards  their  descriptions  of  mines,  have  con- 
tinued to  be  useful  as  the  starting  points  for  more  detailed 
investigations  and  as  general  guides  to  the  unchanged  geologic 
structure.  Cripple  Creek,  although  its  production  curve  has 
long  since  started  down  hill,  has  survived  two  detailed  geol- 
ogic reports,  and  it  is  doubtful  whether  even  a  third,  which 
has  been  suggested,  would  kill  it.  Mining  districts,  of  course, 
cannot  last  forever,  but  the  accounts  of  their  death,  as  Mark 
Twain  put  it,  are  often  "grossly  exaggerated."  They  have  a 
way  of  coming  to  life  again  when,  in  consequence  of  changing 
economic  conditions  or  improvements  in  metallurgical  proc- 
esses, deposits  once  overlooked  or  regarded  as  worthless  take 
on  unexpected  values.  The  point  I  would  make  is  that  a 
sound  report  on  a  developed  district  is  likely  to  have  a  per- 
sistent practical  usefulness  in  addition  to  its  scientific  value. 
Moreover,  it  is  likely  to  be  fully  as  useful  to  the  small  opera- 
tor, or  to  those  beginning  development,  as  it  is  to  the  larger 
mining  companies,  who  nowadays  generally  recognize  the 
value  of  geology  by  employing  their  own  geologists. 

Early  Reports  on  New  Districts  Desirable 

I  am  fully  convinced  t  that  the  Geological  Survey  should  pay 
as  much  attention  as  possible  to  new  districts,  should  make 
available  promptly  an  outline  of  the  general  geology,  and 
present  such  facts  and  conclusions  concerning  the  ore  de- 
posits as  will  aid  in  their  development  and  prevent,  as  far  as 
possible,  waste  of  effort  in  unwise  prospecting.  Such  work, 
however,  should  be  done  by  experienced  men  who  have  the 
wide  and  varied  knowledge  that  can  come  only  from  thorough 
studies  of  districts  in  advanced  stages  of  development.  Such 
a  man  would*  recognize  the  general  type  of  the  new  deposits, 
even  if,  as  is  often,  they  present  some  novel  features;  he 
could  determine  their  relation  to  the  general  geologic  history 


THE  U.  S.  GEOLOGICAL.  SURVEY  411 

and  structure  of  the  district,  he  could  predict  in  some  respects 
what  would  be  found  in  depth,  and  could  probably  give  some 
suggestions,  in  part  orally  and  on  the  ground,  that  would  be 
of  immediate  value  to  the  prospectors. 

Both  types  of  work  should  be  carried  on  together  and  by 
the  same  men.  The  great  difficulty  at  present  is  to  retain  in 
the  Government  service  the  trained  and  able  geologists  who 
can  best  do  the  work,  but  who  find  themselves  unable  to 
support  their  families  on  salaries  that  may  have  been  ade- 
quate 20  years  ago,  but  are  certainly  not  so  now.  Notwith- 
standing the  greatly  lessened  purchasing  power  of  the  dollar, 
the  average  salary  paid  to  Government  geologists,  measured 
in  that  deceptive  unit,  is  less  than  it  was  some  years  ago.  Men 
are  leaving  the  service  for  much  more  remunerative  private 
work.  At  the  present  time  the  Geological  Survey's  staff  of 
geologists  experienced  in  metal  mining,  not  to  speak  of  oil,  is 
so  depleted  that  years  will  be  required  to  restore  it  to  its 
former  strength,  and  such  restoration  will  be  impossible  un- 
less the  ratio  of  salary  to  living  expenses  shows  great  im- 
provement. Under  present  conditions  the  Geological  Survey 
has  not  only  lost  thousands  of  dollars  spent  in  field  work  from 
which,  owing  to  resignations,  no  published  results  can  be  ex- 
pected, but  it  finds  itself  utterly  unable  to  do  more  than  a  very 
small  part  of  the  work  that  should  be  undertaken  in  the  field 
with  which  I  have  dealt.  Moreover,  so  frequent  are  its  losses 
in  personnel,  that  no  extensive  project  can  be  undertaken  with 
any  assurance  that  the  geologist  in  charge  of  it  will  remain 
to  see  it  through.  The  spirit  of  those  who  remain  is  willing, 
but  it  is  simply  impossible  for  them  to  cover  the  field. 

Supplementary  Reports  Also  of  Value 

The  ideal  plan  would  be  not  only  to  have  comprehensive 
studies  made  of  developed  mining  districts,  but  also  to  be 
able  to  keep  more  closely  in  touch  than  is  now  possible  with 
recent  work  in  the  larger  districts,  with  the  aim  of  issuing 
from  time  to  time  supplementary  reports  in  which  the  bearing 
of  new  data  on  earlier  conclusions,  and  on  the  theory  of  ore 
deposition  in  general,  should  be  brought  out.  This,  however, 
would  require  a  larger  annual  appropriation  for  the  Geolog- 
ical Survey,  or  the  diversion  to  the  study  of  metal-mining  dis- 
tricts of  funds  that  are  now  utilized  in  other  fields  of  the 
survey's  activities. 


412  PROCEEDINGS   OF  AMERICAN   MINING   CONGRESS 

INDUSTRY  AND  GOVERNMENT 

By  General  L.  G.  BOYLE,  Washington,  D.  C. 

This  is  a  great  and  distinguished  organization,  represent- 
ing an  enormous  industry,  one  that  after  all,  represents  in 
large  measure  the  basic  wealth  of  the  nation. 

I  cannot,  of  course,  interest  this  convention  by  discussing 
those  technical  problems  that  peculiarly  pertain  to  your  busi- 
ness. Your  own  experience  qualifies  you  to  speak  with 
authority  on  such  subjects.  For  me  to  assume  that  I  could 
instruct  you  in  this  field  would  be  to  follow  the  path  of  error. 
In  fact,  business  men  quite  generally  complain  of  the  ever- 
increasing  volume  of  national  and  State  legislation  that  pro- 
vides artificial  rules  for  the  control  of  the  very  practical 
problems  of  business.  In  like  manner  would  you  have  occa- 
sion to  object  if  I  were  to  take  your  time  by  repeating  things 
that  I  had  culled  from  books.  You,  gentlemen,  are  the 
creators  of  industrial  facts.  There  is  a  wide  margin  between 
theory  and  practice.  Industry  is  hedged  about  by  custom  and 
varying  conditions,  which  in  their  final  analysis  control  pro- 
duction and  distribution.  The  everyday  problem  can  only  be 
met  by  applying  the  test  of  practical  experience.  In  other 
words,  the  mines,  mills  and  factories  of  the  nation  cannot  be 
successfully  operated  by  •  formula.  In  this  I  do  not  decry 
scientific  research  and  the  application  of  the  scientific  prin- 
ciple to  production  and  distribution.  In  fact,  I  am  frank  to 
say  that  business  men  generally  in  this  country  have  in  the 
past  paid  too  little  attention  to  those  abstract  principles  that 
may  be  found  constant  in  all  lines  of  endeavor.  However,  I 
am  safe  in  saying  that  theory  uninstructed  by  experience  is  a 
dangerous  thing.  I  will,  therefore,  not  attempt  discussion 
of  those  technical  matters  that  relate  to  your  production  and 
distribution.  My  purpose  is  to  discuss  briefly  the  opportunity 
that  I  conceive  lies  before  you  through  associated  effort. 

Adjustment  and  Stability 

In  the  nature  of  things,  your  industrial  problems  are  diffi- 
cult at  best.  Due  to  economic  dislocation  in  practically  all 
lines,  the  strain  on  your  business  problems  has  been  accentu- 


INDUSTRY  AND   GOVERNMENT  413 

ated.  Time,  the  great  healer,  will  bring  adjustment  and 
stability.  The  multiplying  of  new  laws  will  not  solve  the 
situation.  That  which  industry  most  needs  is  less  govern- 
mental control,  and  more  team-work  between  capital  and 
labor.  It  is  my  purpose,  as  best  I  can,  to  direct  attention  to 
the  essential  need  of  co-operative  effort  in  your  line  of  en- 
deavor. At  no  time  in  our  industrial  history  was  the  need 
so  great  as  now  for  the  fullest  measure  of  associated  activity. 
This  is  especially  true  in  those,  industries  that  deal  with  our 
natural  resources.  These  great  reserves  of  national  wealth 
cannot  be  adequately  and  economically  developed  unless 
those  who  control  these  vital  and  basic  elements  come  together 
in  an  association  of  this  character,  and  from  time  to  time 
make  careful  survey  of  business  problems. 

We  have  gone  beyond  the  pioneer  stage  in  our  industrial 
development.  Business  has  learned,  and  the  public  is  com- 
mencing to  understand  that  under  our"  competitive  system 
ignorance  of  industrial  and  economic  facts  is  a  clog  in  the 
wheels  of  progress.  The  time  has  gone  when  the  man  of 
vision  and  intelligent  grasp  deems  he  is  best  served  by  hiding 
his  light  under  a  bushel.  We  now  know  that  the  interest  of 
each  is  furthered  by  the  widest  dissemination  of  the  most  up- 
to-date  information  concerning  the  basic  facts  of  industry. 
The  association  method  is  the  business  man's  industrial  uni- 
versity. Through  this  medium  the  elbow  touch  is  given ;  the 
barriers  of  suspicion  are  broken  down,  and  as  the  result  of 
the  free  exchange  of  thought  in  matters  of  common  interest, 
understanding  is  enriched  and  the  public  interest  is  better 
served. 

In  this  present  hour,  grave  and  difficult  questions  press  for 
solution.  It  is  urged  that  America  must  lead  the  troubled 
States  of  Europe  in  the  path  of  readjustment.  M'y  friends, 
we  must  first  solve  our  own  problems  before  we  can  hope  to 
instruct,  lead  and  help  Europe. 

I  desire  briefly  to  direct  attention  to  certain  urgent  mat- 
ters that  must  now,  at  the  very  threshold  of  this  new  era,  be 
solved  before  industry  in  this  country  can  rightly  function, 
and  in  this  solution  this  organization  (the  American  Mining 
Congress)  is  destined  to  play  an  important  part. 


114  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

Causes  of  Abnormality 

In  all  lines  of  business,  and  with  every  class  the  question 
recurs:  "When  will  we  reach  a  stable,  normal  and  depend- 
able basis?"  Those  who  have  capital  that  otherwise  would 
seek  investment  in  useful  and  helpful  lines  of  activity  hesi- 
tate ;  initiative  halts.  Many  causes  are  assigned  as  reasons  for 
this  lack  of  enterprise.  State  and  national  committees  are 
making  search  for  the  underlying  elements  that  are  blocking 
the  wheels  of  progress.  Some  of  the  causes  urged  for  cur- 
rent business  abnormality  are  grounded  on  bald  suspicion, 
without  the.  shadow  of  substance.  Combinations  and  profit- 
eering are  mouth-filling  phrases,  and  serve  to  influence  the 
imagination  and  incite  public  anger.  During  pre-election 
days,  loose  and  wide-flung  accusations  served  a  certain  pur- 
pose connected  with  the  ballot  box.  However,  the  occasion 
for  oratory  is  behind  us,  and  we  can  now  indulge  ourselves  in 
sane,  constructive  thinking,  and  this  to  the  end  that  we  may 
find  if  we  can  the  answer  to  the  riddle  and  thereby  solve  the 
problem. 

It  is  in  the  common  interest  that  capital  should  flow  freely 
and  unembarrassed  to  useful  investment;  that  labor  be  uni- 
versally employed;  that  industrial  building  go  forward  and 
homes  for  the  people  be  constructed ;  that  transportation  facil- 
ities be  adequate,  and  that  production  and  thrift  be  the  order 
of  the  day.  The  grave  and  serious  question  is,  How  can  those 
conditions  be  brought  about? 

To  me  it  seems  foolish  to  urge  that  the  business  interests 
of  the  nation,  the  interests  that  from  a  monetary  standpoint 
alone  would  profit  most  by  a  revival  of  activity,  would,  through 
combinations,  block  the  very  result  that  an  enlightened  self- 
ishness most  desires.  True,  there  may  be  ill-advised  com- 
binations here  and  there,  such  as  the  New  York  investigation 
is  developing.  In  the  main,  however,  I  believe  that  the  causes 
lie  deeper  and  are  more  fundamental. 

Those  who  have  given  the  matter  deep  and  careful  study, 
assign  the  following  as  the  underlying  causes  for  our  present 
economic  lack  of  balance : 

First — The  urgency  of  the  world's  demand  for  our  raw 
materials  and  manufactured  articles  during  and  since  the 
war. 


INDUSTRY  AND   GOVERNMENT  415 

Second — Inflation  of  credit  and  currency. 

Third — Governmental  and  private  extravagance. 

Fourth — Faulty  taxation. 

All  other  contributory  factors  are  either  of  lesser  effect  than 
is  frequently  attributed  to  them,  or  spring  more  or  less  di- 
rectly from  the  causes  above  mentioned. 

It  is  my  purpose  to  direct  attention  to  the  fourth  factor, 
the  tax  problem,  and  especially  the  excess  profits  and  surtax 
phases.  I  do  not  intend  to  go  into  this  all-important  sub- 
ject in  detail;  my  thought  is  that  through  suggestion  I  may 
possibly  indicate  an  opportunity  for  this  organization  to  per- 
form a  great  and  useful  service,  not  alone  to  the  interests  you 
represent,  but  a  service  to  the  nation.  I  understand  from 
reading  the  papers  that  this  matter  has  been  carefully  can- 
vassed and  covered  in  your  committee  and  group  meetings, 
but  a  suggestion  that  I  may  give  may  be  at  least  fruitful  of 
thought.  I  do  not  attempt,  of  course,  to  solve  the  matter. 

We  cannot  indulge  a  reasonable  hope  that  business  nor- 
malcy will  return  to  anything  like  full  measure  until  the  tax 
burdens  on  industrial  initiative  be  lightened  and  equitably 
adjusted.  This  is,  indeed,  a  live  and  urgent  problem,  and 
well  worthy  of  your  earnest  thought.  I  am  talking  to  men 
who  develop  great  natural  resources,  resources  that  compre- 
hend in  large  measure  the  basic  wealth  of  the  nation.  No 
industry  is  so  seriously  handicapped  as  is  yours  by  unwise 
tax  laws.  The  wealth  of  this  great  State  (Colorado) 
is  in  large  measure  compassed  by  her  rich  deposits  of  coal 
and  minerals.  « Your  industry  cannot  truly  prosper,  nor  will 
the  nation  receive  the  benefits  of  the  rich  treasures  that  await 
development  until  badly  adjusted  tax  laws  are  corrected.  If 
we  were  still  engaged  in  war  another  situation  would  be  pre- 
sented; we  are  now,  however,  practically  at  peace  with  the 
world. 

Effect  of  Taxation 

I  will  undertake  to  indicate  a  few  of  the  outstanding  evils 
that  flow  from  the  excess  profits  and  surtax  phases  of  the 
present  statute: 

These  taxes  penalize  industry  and  leave  untouched  the 
man  of  wealth,  who,  fearful  of  the  risk  and  willing  to  avoid 
the  burden,  puts  his  money  into  non-taxable  securities — munic- 


416  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

ipal  bonds,  county  bonds,  State  bonds,  farm  loan  bonds,  and 
some  Federal  bonds  that  are  exempt  from  taxation.  It  thus 
follows  that  the  reserves  from  which  industry  heretofore  has 
drawn  its  needed  additional  capital  now  seek  the  character  of 
securities  above  indicated.  Non-working  and  non-venturing 
investment  offer  a  safe  refuge  to  capital,  as  against  invest- 
ments in  industrial  securities  wherein  from  one-half  to  three- 
fourths  of  the  earnings  are  consumed  in  excess  profits  and  sur- 
taxes. This  is  not  a  matter  of  any  technical,  legal  or  economic 
involution.  There  is  here  a  simple,  plain,  common-sense 
problem.  Take  a  man  who  has  $100,000  of  surplus  money, 
which  he  does  not  need  in  his  own  business ;  he  wants  to  loan 
it,  he  wants  to  invest  it.  Will  he  put  it  in  the  production  of 
coal  mines,  or  oil,  or  timber — the  great  natural  resources  that 
constitute  the  real  wealth  of  the  nation — when  he  is  taking 
some  chance?  In  the  first  place,  he  hesitates  because  there 
is  risk  involved  in  industry,  and,  in  the  second  place,  he  is 
penalized  by  the  excess  profits  or  surtax. 

It  is  estimated  that  there  are  from  14  to  15  billions  worth 
of  tax-free  bonds  and  more  are  being  issued  continually. 
How  can  industry  secure  needed  capital  in  face  of  the  tax 
burdens  that  menace  investment,  when  capital  can  secure  the 
shelter  of  non-taxpaying  bonds?  True  it  is  that  the  law  is 
such  that  it  is  not  possible  to  relieve  this  situation  so  far 
as  tax-free  securities  are  concerned.  That  is,  there  are  con- 
stitutional inhibitions  in  the  way  that  prevent  the  law  being 
applied  so  as  to  make  taxable  the  securities  that  I  have 
referred  to  as  tax  free.  The  only  avenue  of  relief  lies  in  cor- 
recting the  income-tax  law  so  as  to  make  investment  more 
attractive  to  capital.  Such  capital  as  is  now  willing  to  take 
the  risk  in  industrial  enterprise  does  so  at  a  heavy  charge, 
thereby  accentuating  the  basic  cost  of  production,  which  in- 
evitably reflects  itself  in  consumption  prices. 

Now,  here  is  a  practical  angle  of  this  matter  in  which  all 
persons  are  concerned.  High  prices  are  unquestionably  largely 
influenced  by  allocating  the  tax  to  cost ;  that  is,  by  allocating 
the  excess-profits  tax,  or  the  surtax,  as  the  case  may  be,  to  the 
cost  of  the  article  that  is  sold.  It  thus  follows  that  although  the 
tax  is  assumed  to  be  direct,  it  is  in  effect  a  consumption  or 
sales  tax  without  the  virtue  of  the  consumer  knowing  just 
what  this  tax  burden  is.  When  I  refer  to  the  consumer  I 


INDUSTRY    AM)   GOVERNMENT  417 

mean  you,  and  all  other  workers  and  thinkers.  Considered 
from  this  angle,  the  tax  does  not  serve  the  social  need  that  it 
was  designed  to  fill.  Heavy  tax  burdens  are  here  to  stay  until 
we  have  caught  up  with  the  waste,  extravagance  and  destruc- 
tion incident  to  war.  The  problem  is,  How  can  the  tax  be 
adjusted  so  as  to  relieve  the  present  strangle-hold  on  industry? 

The  Government's  Apparent  Views  on  Industry 

One  of  the  basic  errors  of  the  Government  is  that  of 
dealing  with  industry  as  if  industry  did  not  constitute  a  part 
of  the  public — a  vital  part. 

It  is  urged  by  careful  students  that  a  possible  remedy  is  the 
abolishment  of  the  excess-profits  tax  and  a  modification  of  the 
surtax,  in  such  form  as  to  allow  credit  for  investment  of 
earned  funds  that  are  put  to  work  in  productive  enterprise 
during  the  tax  period.  If  such  a  course  were  adopted,  the 
income  tax  as  such  would  have  to  be  increased.  However, 
such  procedure  would  not  only  relieve  the  burden,  but  simplify 
the  process.  The  great  difficulty  with  the  tax  situation  as  it 
stands  is  the  complicated  mass  of  rules  and  regulations  in- 
cident to  return  and  assessment. 

The  remedy  from  the  evils  that  embarrass  industry  lies  in 
the  hands  of  the  business  interests  of  America.  I  am  con- 
vinced that  Congress  will  welcome  well-balanced  suggestions. 
It  is  impossible  for  industry  to  present  constructive  sugges- 
tion unless  it  is  done  through  the  medium  of  an  association 
such  as  the  Mining  Congress.  As  I  have  already  indicated,  men 
in  all  lines  of  business  should  draw  close  together  and  take 
council,  touching  the  correction  of  those  matters  that  now 
disturb  business.  To  me  it  is  inconceivable  that  any  of  the 
substantial  interests  in  your  lines  of  endeavor  should  not  co- 
operate with  this  association.  It  is  useless  for  you  to  employ 
attorneys  or  a  man  as  capable  even  as  Mr.  Callbreath  unless 
you  are  willing  to  back  his  efforts.  The  committees  of  Con- 
gress want  to  hear  from  the  business  men  themselves.  The 
problem  can  not  and  will  not  be  adequately  met  unless  you 
yourselves  are  willing  to  make  the  sacrifice  of  time  and  labor. 
Business  men  are  too  prone  to  criticise  Congress  and  too  lit- 
tle disposed  to  make  the  necessary  sacrifice  in  helping  Con- 
gress to  wise  conclusions.  The  hour  is  ripe  for  men  of  vision 


418  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

and  understanding  to  render  signal  service  to  industry  and 
the  nation. 

Amend  the  Anti-Trust  Law 

Another  factor  that  requires  consideration  is  the  Sherman 
Anti-trust  Law,  which  has  been  on  the  statutes  for  30  years. 
It  should  be  amended  not  to  give  men  the  right  to  fix  prices 
and  rob  the  people,  not  to  curtail  production  and  thereby 
enhance  prices,  but  amended  in  such  fashion  that  in  a  great, 
natural  resource,  industry  of  the  kind  we  are  here  dealing 
with,  waste  could  be  avoided  and  economy  could  be  indulged. 
Curtailment  and  price  adjustment  should  be  allowed  by 
agreement,  but  in  such  a  manner  as  to  safeguard  public  in- 
terest. 

One  of  the  things  we  must  teach  the  people  of  this  country 
is  that  business  is  not  criminal,  but  it  is  legitimate.  The 
thing  that  Government  officials  at  Washington,  and  the  State 
officials  of  Colorado,  must  learn  is  that  the  ordinary  outlook 
of  the  business  men  of  this  country  is  moral,  patriotic  and 
worthy. 

Therefore,  I  trust  that  this  association  will  at  this  meeting 
appoint  strong,  upstanding  committees  which  will  be  willing 
to  go  to  Washington,  as  time  develops,  and  there  sit  down  and 
talk  to  Senators  and  Congressmen  as  to  the  matters  we  have 
been  discussing  here,  because  you  cannot  expect  Congress  to 
give  relief  unless  it  is  informed  as  to  what  that  relief 
should  be. 


CONTROL  OF  INDUSTRIAL  WARFARE  419 


SOCIAL  CONTROL  OF  INDUSTRIAL  WARFARE 

By  WALTER  GORDON  MERRITT,  Attorney,  League  for  Industrial  Rights, 

New  York 

The  National  Republican  platform  of  1920  contained  the 
following:  "The  strike  or  the  lockout  as  a  means  of  settling 
industrial  disputes,  inflicts  such  loss  and  suffering  on  the  com- 
munity as  to  justify  Government  initiative  to  reduce  its  fre- 
quency and  limit  its  consequences."  The  National  Demo- 
cratic platform  of  1920  said:  "Neither  class  should  at  any 
time  nor  in  any  circumstances  take  action  that  will  put  in 
jeopardy  the  public  welfare.  Resort  to  strikes  and  lockouts 

which  endanger  the  health  or  lives  for  determining  disputes. 

#     #     #     »» 

These  utterances,  evoked  by  public  opinion,  and  in  marked 
contrast  with  the  temper  of  most  European  nations,  present 
the  problem  of  the  social  control  of  labor  organizations  in 
the  use  of  their  economic  power.  Nothing  could  be  of  greater 
importance.  In  discussing  this  question  we  can  eliminate 
from  consideration  the  ordinary  problems  of  law  and  order 
in  industrial  disputes,  and  promptly  direct  our  attention  to 
the  more  pressing  and  complex  questions  of  regulating  indus- 
trial warfare,  regardless  of  whether  it  is  characterized  by 
violence.  We  can  eliminate,  as  do  the  political  platforms,  the 
question  of  the  boycott,  which,  so  far  as  its  familiar  phases 
are  concerned,  has  already  been  pretty  well  disposed  of  by 
law  and  public  opinion.  In  the  interests  of  simplicity,  most 
of  the  discussion  will  be  directed  toward  unions  and  strikes, 
rather  than  employers'  associations  and  lockouts;  but  wher- 
ever the  situations  are  parallel,  the  even  hand  of  justice  should 
comprehend  both. 

To  what  extent  is  it  practicable  and  expedient  to  compel 
unions  and  their  members,  in  carrying  on  strikes,  to  respect 
prevailing  inhibitions  against  anti-social  conduct  and  to  con- 
form to  them  as  other  citizens  and  business  institutions  are 
compelled  to  conform?  The  outstanding  peculiarity  of  the 
problem  is  not  the  difficulty  of  bounding  the  areas  of  right 
and  wrong  action,  but  the  broad  question  as  to  whether 


420  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

respect  for  such  boundaries  should  be  reinforced  by  govern- 
mental action  or  should  be  entrusted  to  the  more  flimsy  foun- 
dations of  moral  restraint,  or  what  Mr.  Samuel  Gompers  calls 
"voluntariness."  If  society  should  enact  into  law  and  there- 
after enforce  only  such  limitations  on  industrial  warfare  as 
have  been  considered  just,  by  certain  unions  and  union  leaders, 
its  present  perplexities  in  this  direction  would  be  largely 
solved.  But  the  same  organizations  that  concur  with  us  as 
to  most  of  our  definitions  of  illegitimate  strikes,  oppose  any 
effort  on  the  part  of  the  State  to  curtail  or  emasculate  such 
strikes. 

There  is  the  issue:  Shall  the  intervention  of  society  be 
limited  to  the  suppression  of  force  and  violence  in  industrial 
.disputes,  or  shall  it  extend  to  other  anti-social  activities  of 
disciplined  labor  organizations,  which  are  excessively  hurt- 
ful and  oppressive  to  the  people  at  large?  Should  the  law 
progress,  as  it  has  in  other  fields,  to  include  within  its  pro- 
hibitions many  situations  heretofore  left  to  moral  restraint, 
but  which  the  progress  of  civilization  has  shown  to  need  regu- 
lation? Out  of  this  issue  has  grown  much  discussion  and 
many  experiments,  but  unfortunately  neither  has  been  shaped 
by  those  who  combine  an  open  mind  with  long  observation  of 
the  principles  involved. 

Respect  for  such  fundamental  social  rights  from  other 
classes  of  citizens  is  not  left  to  discretion  or  self-restraint, 
and  an  exception  in  favor  of  unions  would  be  both  invidious 
and  unjustified  in  view  of  the  present  lack  of  moral  restraint 
on  the  part  of  some.  Voluntary  restraint  in  circumstances 
like  these  seems  only  to  be  operative  when  exacted  by  the 
terms  of  plain  self-interest.  Grant  organized  labor  the  legal, 
if  not  the  moral,  right  to  trample  on  social  interests  whenever 
its  apparent  self-interest  so  advocates,  and  we  will  find  our- 
selves confronted  with  progressive  tyranny.  That  is  no  reflec- 
tion on  organized  labor  in  particular,  but  a  reflection  on  human 
nature.  Where  the  right  is  of  sufficient  importance  and  the 
danger  of  its  infringement  substantial  and  imminent,  there 
must  be  political  intervention  to  protect  the  rights  of  the 
greater  number. 

In  debating  this  question,  the  Hon.  H.  J.  Allen,  Governor 
of  Kansas,  and  Samuel  Gompers  pursue  parallel  lines,  each 
following  his  own  particular  trail  with  no  chance  of  meet- 


CONTROL  OF  INDUSTRIAL  WARFARE  421 

ing.  The  latters  stands  upon  the  national  shibboleth  of  lib- 
erty and  the  right  to  strike,  while  the  former  asserts  the  para- 
mo untcy  of  public  rights. 

Where  Compulsory  Arbitration  Fails 

The  extreme  of  social  control  is  the  prohibition  of  all  strikes 
and  lockouts,  and  the  compulsory  arbitration  of  all  difficulties 
growing  out  of  the  employment  relation.  This  involves  the 
establishment  of  tribunals  which  shall  take  over  the  com- 
plex and  difficult  question  of  fixing  wages  and  employment 
conditions  in  mining,  manufacturing,  transportation  and  pub- 
lic utility  operations. 

Concerning  compulsory  arbitration  in  Australia,  the  Prime 
Minister,  Mr.  W.  H.  Hughes,  is  reported  to  have  said:  "This 
perfect  piece  of  legislation  has  turned  out  to  be,  despite  the 
kind  of  ministry  in  office,  the  most  inefficient  and  hopelessly 
futile  effort  to  solve  the  industrial  question  that  ever  came 
out  of  the  laboratory  of  any  industrial  workshop."  Mr.  Her- 
bert Hoover  finds  the  Kansas  Industrial  Court  law  a  virtual 
reproduction  of  the  Australian  scheme  and  says:  "My  own 
opinion  is  that  the  act  cannot  succeed.  In  Australia  the  num- 
ber of  strikes  and  dislocations  is  as  great  as  in  other  coun- 
tries without  it." 

In  the  United  States,  in  the  light  of  present-day  psychology 
and  economic  conditions,  compulsory  arbitration  as  a  pre- 
vailing scheme  for  the  settlement  of  industrial  disputes  is 
neither  expedient  nor  desirable.  The  high-spirited,  inde- 
pendent and  self-reliant  character  of  employers  and  workmen 
is  not  favorable  to  submissiveness  before  such  an  intrusion 
by  the  State,  and  attempts  in  that  direction,  as  Mr.  Hoover 
reminds  us,  might  provoke  an  unfortunate  contest  over  human 
rights  with  a  divided  public  opinion.  Laws  of  such  character 
meet  with  a  disregard  and  antagonism  that  augurs  ill  for  the 
habit  of  obedience  to  law,  so  indispensable  to  the  stability  of 
any  government.  What  would  the  State  do  if  a  hundred 
thousand  men  went  on  strike  in  violation  of  law?  Probably 
just  what  Mr.  Lloyd  George  did  when  during  the  war  miners 
struck  in  violation  of  British  laws — he  hastened  to  Cardiff 
for  a  conference  with  the  leaders  and  reached  an  adjustment. 
Hundreds  of  men  have  struck  in  Kansas  since  the  passage  of 
its  act  creating  the  Court  of  Industrial  Relations  in  January, 


422  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

1920,  but,  so  far  as  I  am  aware,  none  of  these  men  are  in  jail 
for  striking. 

However,  a  fair  trial  of  the  experiment  in  an  agricul- 
tural State  like  Kansas,  where  public  opinion  is  so  heartily  in 
its  favor,  is  highly  desirable,  and  should  throw  much  light  on 
the  usefulness  of  such  measures.  The  main  difficulty  will  be 
the  extraordinary  and  concentrated  efforts  of  organized  labor 
to  prevent  a  fair  trial  and  prove  the  futility  of  the  law. 

Strike  Regulation  Is  Not  Voluntary  Servitude 

The  assertion  that  such  laws  involve  involuntary  servitude 
is  nonsense.  They  only  limit  the  right  of  concerted  action. 
The  right  to  carry  on  industrial  warfare  through  collective 
action  is  no  more  a  part  of  individual  liberty  than  the  right  of 
citizens  privately  to  organize  armies.  The  right  to  strike, 
lockout,  picket  and  boycott  as  a  plan  of  concerted  action,  is  a 
right  of  combination  subject  to  more  radical  and  drastic  regu- 
lation than  individual  rights.  Rights  of  combinations  .are 
relative  and  not  absolute.  The  United  States  recognized  this 
distinction  when  it  passed  anti-trust  laws.  He  who  confuses 
the  right  to  strike  with  the  individual  right  to  quit  work  is 
bound  to  go  astray. 

The  strike  is  a  device  to  injure  and  coerce  with  a  view  to 
securing  ultimate  advantage.  The  strike,  at  best,  is  an  un- 
pleasant necessity — the  lesser  of  two  evils — and  it  is  to  be 
regretted  that  no  one  has  yet  thought  of  any  other  social 
expedient  which  will  adequately  strengthen  the  position  of  the 
great  body  of  employed. 

Only  a  Minimum  of  Regulation  Is  Desirable 

Granting  the  soundness  of  the  usual  arguments  against 
strike  regulation,  it  does  not  follow  that  its  opponents  are 
entirely  wrong.  A  pretty  free  play  of  the  economic  forces  of 
organized  capital  and  organized  labor  is  desirable.  They  should 
be  allowed,  so  far  as  practicable,  to  work  out  their  own  adjust- 
ments. To  repress  them  unduly  is  dangerous ;  it  might  mean 
a  postponement  or  utter  failure  of  a  reconstruction  altogether 
desirable.  The  spirit  of  protest  as  expressed  in  a  strike  is,  on 
the  whole,  wholesome  and  desirable.  It  has  been  an  instru- 
ment of  great  social  service,  and  has  directed  much-needed 
attention  and  consideration  toward  the  problems  and  wants 


CONTROL  OF  INDUSTRIAL  WARFARE  423 

of  the  workers  in  all  industries  and  communities.  Even  em- 
ployers who  have  never  known  the  threat  of  strike  are,  con- 
sciously or  unconsciously,  influnced  by  the  fear  of  it.  The 
State  cannot  perform  these  functions  of  the  strike  through 
any  court.  It  does  not  always  have  vision.  The  history  of 
English  labor  legislation,  and  the  manner  in  which  the  settle- 
ment of  labor's  grievances  by  the  State  languishes  until  a 
strike  is  threatened,  is  proof  enough  of  this  assertion.  Would 
society  have  progressed  as  it  has  in  its  relation  to  the  labor 
problem  had  it  not  been  for  the  nuisance  value  of  the  strike? 
If  compulsory  arbitration  had  been  instituted  by  the  State 
50  years  ago,  and  submission  to  such  action  had  been  secured 
from  all  the  parties  in  interest,  is  it  conceivable  that  either 
the  State  or  the  employer  would  have  been  so  considerate  of 
the  rights  of  the  workers,  or  that  welfare  legislation  would 
have  advanced  with  the  same  speed  ?  Would  not  the  tendency 
to  maintain  the  status  quo  have  been  more  dominant  and  con- 
trolling? If  this  be  true  as  to  the  past,  may  it  not  als^  hold 
some  hidden  significance  for  the  future?  At  least  the  possi- 
bility should  give  us  pause. 

Some  Regulation  Is  Essential 

This  is  not  to  say  that  all  regulation  of  strikes  or  indus- 
trial warfare  is  inexpedient  or  undesirable.  My  convictions 
are  just  the  contrary.  The  objective  of  society  should  be  to 
eliminate  premature,  unnecessary  and  unjust  strikes  and  lock- 
outs, without  closing  the  door  to  the  usefulness  of  the  strike 
in  appropriate  cases  as  a  last  resort.  The  time  has  arrived 
when  the  public,  not  the  employers,  should  point  out  where 
its  proper  function  ends  and  where  its  use  becomes  anti-social 
and  intolerable.  To  allow  men  to  foment,  organize  and  main- 
tain strikes  and  lockouts  for  any  and  all  purposes,  however 
corrupt  and  oppressive,  is  indefensible ;  to  trust  to  mere  self- 
restrain  is  ludicrous.  An  entire  lack  of  strike  regulation 
will  inevitably  invite  attempts  to  control  governmental  action 
and  industry  through  methods  akin  to  syndicalism  and  soviet- 
ism;  it  is  the  most  direct  route  to  class  dictation.  European 
conditions  make  this  clear.  The  duty  of  self-preservation 
demands  that  the  Government  avoid  this.  Minorities  hold- 
ing a  strategic  economic  position  should  not  be  allowed  to 
visit  privation  or  disaster  upon  society.  When  public  rights 


424  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

and  private  rights  clash,  private  rights  must  yield — they  must 
be  regulated.  With  the  demands  of  the  American  Federa- 
tion of  Labor,  tliat  the  Government  keep  its  hands  entirely 
off  and  leave  the  economic  power  of  labor  entirely  uncurbed, 
we  cannot  agree. 

The  Kansas  Act  Is  Too  Broad 

On  the  other  hand,  the  Kansas  Industrial  Court  Act  is 
partly  erroneous  in  conception,  for  it  unfortunately  extends 
the  principle  of  compulsory  arbitration  into  fields  beyond  any 
present  or  probable  emergency,  by  including  clothing  and 
food.  Application  of  that  law  to  transportation,  public  utili- 
ties and  coal  mining  is  on  sounder  ground,  but  it  seems  un- 
fortunate that  such  an  experiment  in  Government  regula- 
tion should  have  extended  so  far  beyond  the  point  of  urgency 
and  should  have  aimed  at  such  a  general  application  of  the 
principle  of  compulsory  arbitration.  The  mistake  in  this 
law,  and  the  underlying  mistake  in  many  other  suggestions 
which  have  been  advanced,  are  due  primarily  to  a  failure  to 
understand  the  philosophy  and  significance  of  the  strike. 

Legitimate  and  Illegitimate  Strikes 

If  the  right  to  strike  and  conduct  industrial  warfare  aims 
to  relieve  the  individual  employe  from  his  comparative  help- 
lessness in  dealing  with  a  powerful  employer,  then  that  right, 
which  involves  so  much  mischief  and  embarrassment,  should 
be  limited  to  such  a  function,  and  should  not  be  resorted  to 
unless  it  is  finally  necessary  for  the  workers  to  pit  their  eco- 
nomic power  against  that  of  the  employer.  Applying  this 
test  and  others,  there  are  many  clear,  sound  and  practical 
principles  that  can  be  invoked  for  the  purpose  of  classifying 
strikes  as  legitimate  and  illegitimate,  and  when  once  that 
classification  is  made,  the  law  can  effectively  differentiate 
in  its  methods  of  dealing  with  them. 

Heretofore  the  law  has  laid  too  much  emphasis  on  the 
methods  of  industrial  warfare,  and  has  not  sufficiently  dis- 
criminated as  to  the  circumstances  and  objects  of  each  strike. 
As  a  general  rule  it  is  held  that  strikes  are  lawful  and  boy- 
cotts are  unlawful,  although  in  an  overwhelming  majority  of 
cases  the  strike  entails  far  greater  suffering  and  losses  for  the 
employer  and  the  public.  In  the  case  of  picketing,  some  States 


CONTROL  OF  INDUSTRIAL  WARFARE  425 

allow  and  others  disallow  peaceful  picketing.  All  these  activi- 
ties are  methods  of  industrial  warfare  at  times  involving  anti- 
social consequences  and,  to  say  the  least,  none  of  them  should 
be  encouraged  except  when  used  as  a  last  resort  to  further  in- 
dustrial justice.  Whoever  observes  the  standards  of  indus- 
trial peace  and  justice  should  receive  the  fullest  practical 
protection  from  the  Government,  as  against  industrial  war- 
fare waged  by  those  who  seek  to  impose  the  rule  of  force  and 
unreason. 

Where  the  employer  is  willing  to  arbitrate,  it  is  outrageous 
to  permit  the  picketing  of  his  establishment.  Unions  should 
not  be  permitted  the  same  freedom  to  overthrow  the  principle 
of  the  open  shop  as  they  are  permitted  in  an  effort  to  over- 
throw the  anti-union  shop.  The  open  shop  is  in  furtherance 
of  human  liberty,  while  the  closed  shop,  whether  union  or 
non-union,  is  against  human  liberty.  Strike  activities,  where 
the  object  is  the  removal  of  restrictions  on  human  liberty 
should  be  less  restricted  than  strike  activities  to  curtail  human 
liberty.  No  attempt  to  force  men  into  a  union  or  out  of  a 
union  is  to  be  encouraged.  These  are  but  illustrations,  dimly 
recognized  in  a  few  States,  of  the  need  of  distinguishing  be- 
tween legitimate  and  illegitimate  strikes.  The  courts  made 
such  distinctions  for  a  long  time,  and  some  recent  decisions 
construing  labor  provisions  like  those  of  the  Clayton  Act  indi- 
cate that  the  privilege  and  liberties  therein  enumerated  do 
not  apply  in  the  case  of  sympathetic  strikes  or  strikes  for  the 
closed  shop,  because  in  such  cases  there  is  no  genuine  trade 
dispute  within  the  meaning  of  the  act. 

Industrial  warfare  must  not  become  an  instrument  of  in- 
dustrial injustice.  Industrial  justice  must  be  the  price  of 
industrial  peace.  It  is  in  line  with  sound  public  policy  to  per- 
mit industrial  warfare  for  the  correction  of  industrial  wrongs, 
but  it  must  be  suppressed  when  it  aims  to  accomplish  results 
contrary  to  such  a  policy.  We  must  make  the  conduct  of 
illegitimate  strikes  so  discouraging  and  futile  and  other  meth- 
ods of  adjustment  so  promising  and  attractive,  that  there  will 
be  a  gradual  abandonment  of  the  illegitimate  strike.  If  we 
should  not  send  men  to  jail  for  striking,  we  can  at  least  de- 
prive organizations  of  the  privileges  of  organized  action  in 
furtherance  of  the  illegitimate  strike.  In  this  way  the  prop 


426  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

and  mainstay  of  effective  industrial  warfare  may  be  knocked 
out  from  under  the  illegitimate  strike. 

Illegitimate  strikes  may  be  classified  under  the  following 
general  heads: 

1.  Strikes  that  violate  the  fundamental  principles  of 

democracy  by  trying  to  substitute  government  by 
strike  for  government  by  ballot. 

2.  Strikes  that  unduly  injure  the  general  public,  which 

in  military  war  we  call  civilians. 

3.  Strikes  against  neutrals. 

4.  Strikes  without  first  exhausting    the    resources    of 

diplomacy. 

5.  Strikes  in  violation  of  agreements. 

6.  Strikes  in  violation  of  an  arbitration  award. 

7.  Strikes  where  arbitration  is  available. 

8.  Strikes  against  liberty. 

[Mr.  Merritt  then  discussed  these  points  in  detail.  This  is 
omitted,  as  the  facts  are  generally  well  understood. — Editor.] 

Public  opinion  would  certainly  be  united  on  the  proof  that 
fetrikes  in  violation  of  these  eight  principles  are  in  violation 
of  sound  public  policy,  and  generally  should  be  discouraged. 
To  restrain  organized  labor  in  supporting  them  would  consti- 
tute the  most  etfective  discouragement  without  making  them 
illegal.  It  would  strengthen  the  hands  of  the  conservative 
union  and  union  leader  in  fighting  the  recalcitrant  forces 
within  their  organization,  which  today  constitute  such  an 
embarrassment,  and  would  clarify  public  opinion  as  to  the 
distinction  between  legitimate  and  illegitimate  union  action. 

Civil  Remedies  Only 

Our  proposed  law,  so  far  as  it  relates  to  private  industry, 
would  merely  forbid  organized  support  of  strikes  which  vio- 
late our  moral  code.  The  enforcement  of  such  a  law,  at  least 
in  the  field  of  private  industry,  would  depend  on  the  civil 
remedies  of  injunction  and  damages  rather  than  upon  criminal 
penalties.  This  makes  the  enforcement  largely  dependent  on 
the  initiative  of  private  parties,  and  not  on  political  appointees. 

To  make  these  remedies  effective  it  is  important  that  volun- 
tary associations,  whether  of  employers  or  workmen,  shall 
have  the  capacity  to  sue  and  be  sued.  It  is  not  necessary  or 


CONTROL  OF  INDUSTRIAL  WARFARE  427 

desirable  to  require  their  incorporation.  Incorporation  is  a 
privilege.  To  say  that  unions  shall  not  exist  or  operate  with- 
out incorporation  is  to  provoke  evasions  of  the  law,  if  not 
actual  defiance  to  it.  English  industrial  history  proves  that 
it  is  only  necessary  to  declare  that  voluntary  associations  can 
become  parties  to  litigation.  That  will  bring  legal  recogni- 
tion which  in  these  days  when  employers'  associations  and 
unions  exercise  a  power  for  good  or  ill  far  beyond  that  of 
individuals,  is  altogether  desirable.  Collective  responsibility 
should  accompany  collective  action.  Having  thus  created  the 
element  of  legal  responsibility,  society  can  enforce  its  laws. 

Injunction 

The  injunction  remedy,  however  unpopular  it  may  be,  seems 
to  be  the  fairest  and  most  effective  means  of  controlling  large 
organizations,  particularly  in  cases  where  it  is  difficult  to  fix 
definite  standards  of  legality  and  illegality.  Business  men, 
acting  co-operatively,  should  not  ordinarily  be  prosecuted 
until  the  legality  of  their  conduct  has  been  definitely  passed 
upon  in  a  civil  action ;  the  same  is  true  of  co-operative  action 
among  workers.  The  injunctive  remedy  is  highly  beneficent 
in  that  it  is  preventive,  and  issues  a  warning  to  the  wrong- 
doer before  punishing  him  or  mulcting  him  in  damages.  It 
protects  the  aggrieved  and,  by  timely  warning,  often  spares 
the  aggressor.  Its  unpopularity  is  largely  due  to  misunder- 
standing and  the  reiteration  of  unfounded  statements.  Few, 
if  any,  remedies  have  been  subject  to  less  -abuse  and  error. 
Its  effectiveness  in  labor  controversies  is  measured  by  the 
strength  of  union  opposition  to  it.  However  keen  the  bitter- 
ness it  has  aroused,  it  is  not  at  all  certain  that  the  defeat  of  a 
strike  through  legal  intervention  creates  any  harsher  feeling 
than  its  defeat  through  economic  exhaustion  after  a  drawn- 
out  fight.  Many  misled  and  innocent  strikers  are,  through  the 
injunction,  relieved  from  unfair  coercion  and  spared  much 
suffering  and  privation. 

Assuming  that  the  union  employes  in  the  coal  mines  decided 
to  tie  up  the  production  of  coal  when  afforded  the  alternative 
of  arbitration,  and  that  such  action  was  illegal  and  unjusti- 
fied, there  was  no  better  remedy  for  safeguarding  the  public 
interests  than  the  injunction.  If  our  assumptions  are  correct, 
the  Government's  mistake  was  not  in  seeking  an  injunction 


428  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

when  it  did,  but  in  failing  to  enjoin  in  advance  of  the  issuance 
of  the  strike  order.  The  injunction  followed  the  true  course 
of  requiring  a  recission  of  the  strike  order  and  an  abstention 
from  all  conduct  in  furtherance  of  the  strike,  including  the 
payment  of  strike  benefits  from  an  available  defense  fund 
amounting,  according  to  report,  to  many  millions  of  dollars. 

Effectiveness  of  Such  a  Law 

The  extent  to  which  such  a  law  would  protect  the  public 
from  unwarranted  strikes  is  to  be  measured  by  the  extent  to 
which  organized  union  action  is  responsible  for  our  excess  of 
industrial  warfare.  The  statistics  of  the  United  States  De- 
partment of  Labor  show  that  most  strikes  are  the  result  of 
organized  union  action.  The  figures  for  1919  show  that 
nearly  one-third  of  the  industrial  employes  went  on  strike, 
and  that  93  per  cent,  of  these  strikes  were  by  union  men 
rather  than  non-union  men.  Considering  the  fact  that  organ- 
ized labor  represents  less  than  a  third  of  our  industrial,  trans- 
portation and  mining  employes,  it  can  be  said  for  the  year 
1919  that  the  liability  to  strike  from  unionism  as  against  non- 
unionism  was  over  40  to  1.  The  average  ratio  for  the  last 
five  years  is  somewhat  lower,  and  would  probably  run  20  or  30 
to  1.  Even  strikes  of  non-union  men,  recorded  as  such  by  the 
Department  of  Labor,  are  often  instigated  by  union  officials. 
This  was  particularly  true  during  1918. 

On  the  whole  we  are  forced  to  conclude  that  all  but  a  few 
strikes  are  due  to  the  activities  of  organized  labor,  and  that 
the  responsibility  for  the  recent  excess  of  industrial  warfare 
lies  at  its  door.  It  is  therefore  believed  that  most  strikes  are 
only  effective  through  organized  machinery,  and  that  society 
can  protect  itself  against  anti-social  strikes  by  regulating  that 
machinery.  This  will  not  interfere  with  the  legitimate  use 
of  the  strike  as  a  last  resort. 

The  effectiveness  of  control  of  this  character  is  testified  to 
by  the  convention  of  the  United  Mine  Workers  which  de- 
clared: "This  convention  realizes  that  through  industrial 
legislation  such  as  the  court's  interpretation  of  the  Lever  Act, 
the  abuse  of  the  writ  of  injunction  with  the  tie-up  of  union 
funds  and  other  oppressive  measures,  makes  it  almost  humanly 
impossible  to  wage  a  successful  battle."  British  unions  are 
on  record  as  stating  that  laws  interfering  with  strike  bene- 


CONTROL  OF  INDUSTRIAL  WARFARE  429 

fits  would  "paralyze  the  efficiency  of  the  instituion,  and  are 
tantamount  to  a  proposal  to  suppress  unionism  by  statute." 

Eugene  Debs  is  also  a  witness  to  the  efficacy  of  injunctions 
in  breaking  up  such  illegal  combinations.  This  was  during 
the  strike  of  the  railroad  men  against  the  hauling  of  Pullman 
cars  about  a  quarter  of  a  century  ago,  when  the  Government 
secured  an  injunction.  When  Mr.  Debs  was  tried  and  con- 
victed for  violating  the  injunction,  he  testified  that  "It  was 
not  the  soldiers  that  ended  the  strike.  *  *  *  It  was  simply 
the  United  States  Courts.  *  *  *  Our  men  were  in  a  posi- 
tion that  never  would  have  been  shaken  under  any  circum- 
stances if  we  had  been  permitted  to  remain  upon  the  field 
among  them.  Once  we  were  taken  from  the  scene  of  action 
and  restrained  from  sending  telegrams  or  issuing  orders  or 
answering  questions,  then  the  minions  of  the  corporations 
would  be  put  to  work.  *  *  *" 

The  resistance  and  elemental  power  of  unorganized  mobs 
will  always  have  its  embarrassments  for  the  State,  and  no  civil 
process  will  be  adequate  to  deal  with  them.  To  such  move- 
ments our  suggestion  has  no  application.  It  leaves  them 
where  they  were,  no  better  and  no  worse.  But  the  great  mass 
of  anti-social  strikes,  in  this  country  at  least,  and  the  partici- 
pation of  our  representative  unions  in  them,  are  of  an  entirely 
different  character.  They  are  not  the  voluntary  uprisings  of 
an  unorganized  mob  but  are  systematically  incited  and  main- 
tained through  the  elaborate  and  organized  preparations  of 
permanent  organizations.  Prevent  the  machinery  of  these 
organizations  from  fomenting,  managing  and  maintaining 
such  strikes,  which  is  an  entirely  practicable  thing  to  do  by 
legal  process,  and  most  of  them  would  fail  for  want  of  insti- 
gation, leadership  and  direction. 

These  suggestions  for  social  control  are  thrown  into  the 
maelstrom  of  discussion  because  the  major  part  of  them 
differs  from  other  suggestions  which  have  come  to  the  atten- 
tion of  the  public. 


430  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

THE   WAR   FINANCE    CORPORATION 

By  EUGENE  MEYER,  JR.,  New  York 

The  War  Finance  Corporation  was  an  institution  formed 
during  the  war  with  $500,000,000  capital  stock  and  authority 
to  borrow  up  to  $3,000,000,000.  All  of  the  capital  was  paid 
in  and  is  now  held  by  the  United  States  Government.  The 
Corporation  borrowed,  through  the  medium  of  a  note  issue, 
only  $200,000,000,  all  of  which  has  been  re-paid.  During  the 
war  it  functioned  as  an  institution  to  furnish  temporary 
assistance  to  American  industries  necessary  or  contributory  to 
the  war,  as  the  phrase  in  the  law  ran,  to  furnish  financial 
assistance  under  the  difficult  conditions  existing  and  expected. 
Under  its  war  powers  it  advanced  in  all  some  $300,000,000, 
of  which  $235,000,000  has  been  re-paid.  Among  the  powers 
granted  as  a  war  measure  the  Corporation  was  authorized  to 
make  advances  to  industries  necessary  and  contributory  to 
the  war,  to  banks  that  had  financed  such  industries,  and  in 
general  in  the  public  interest  to  savings  institutions,  building 
and  loan  associations,  and  fiduciary  institutions  of  that  char- 
acter in  case  of  need. 

When  active  hostilities  ended  with  the  armistice  in  Novem- 
ber, 1918,  it  became  evident  that,  except  as  to  operations 
necessary  in  connection  with  demobilization  of  troops,  the 
war  powers  of  the  Corporation  were  necessarily  at  an  end, 
and  consideration  was  given  to  its  possibilities  as  a  recon- 
struction agency.  Many  suggestions  were  made,  but  the  only 
one  that  the  directors  adopted,  and  ultimately  recommended 
to  Congress,  was  the  proposal  that  for  a  short  period  after 
the  proclamation  of  peace  the  corporation  might  make  ad- 
vances in  aid  of  exports,  since  it  was  evident  that  some  time 
would  elapse  before  the  normal  processes  of  international 
trade  could  again  function. 

This  suggestion  was  adopted  by  the  Congress,  and  by  Act 
signed  by  the  President  on  March  31,  1919,  the  Corporation 
was  given  further  powers  by  Section  21,  the  reconstruction 
amendment. 


THE  WAR  FINANCE  CORPORATION  431 

This  was  the  biggest  reconstruction  measure,  in  the  amount 
of  funds  involved,  passed  by  any  nation,  and  it  was  passed  in 
recognition  of  the  fact  that  during  the  reconstruction  period, 
difficulties  in  the  export  trade  of  the  United  States  would 
inevitably  arise,  not  only  until  the  formal  proclamation  of 
peace,  but  for  some  time  thereafter.  The  amendment  carried 
no  new  appropriation,  but  authorized  advances  in  aid  of  ex- 
ports to  the  amount  of  $1,000,000,000  outstanding  at  any  one 
time,  out  of  funds  previously  appropriated  or  out  of  moneys 
to  be  raised  by  the  issue  of  the  Corporation's  bonds.  Its 
powers  under  the  amendment  were  to  continue  in  effect  for 
the  period  of  one  year  after  the  proclamation  of  peace  by  the 
President,  which  proclamation  has  never  been  issued. 

Government  Loans  to  Europe 

During  the  period  immediately  following  the  armistice,  the 
powers  conferred  upon  the  corporation  were  not  used,  since 
aid  was  given  to  exports  through  other  channels.  The  United 
States  Government  made  direct  loans,  following  the  armis- 
tice, to  the  extent  of  $2,500,000,000  to  the  countries  associ- 
ated with  us  in  the  war,  and  the  newly-constituted  republics 
of  Europe.  A  certain  amount  of  financing  was  provided  by 
foreign  loans  floated  in  America.  There  were  also  large 
speculative  investments  in  foreign  securities  in  this  country. 
Gradually  also,  the  production  of  Europe  was  restored,  im- 
proving to  that  extent  their  buying  power  because  of  produc- 
tion for  export. 

Towards  the  end  of  the  year  1919,  and  particularly  in  the 
spring  of  1920,  more  difficulty  was  experienced  in  making 
satisfactory  arrangements  for  longer  term  financing  in  con- 
nection with  exports,  and  the  aid  of  the  War  Finance  Cor- 
poration was  sought  by  substantial  borrowers.  Advances  in 
aid  of  exports  were  made  to  the  extent  of  some  $46,000,000, 
and  a  substantial  volume  of  promising  business  for  the  future 
was  indicated  by  tentative  applications  before  the  Board. 

In  May,  1920,  the  Secretaiy  of  the  Treasury  requested  the 
Board  to  discontinue  making  advances  in  aid  of  exports, 
except  pursuant  to  commitments  already  made,  and  as  he  was 
chairman  of  the  Board,  and  because  of  certain  powers  con- 
ferred upon  him  by  the  Enabling  Act,  possessed  an  effective 


432  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

veto  power  over  the  Board's  activities.  We  acquiesced  in  his 
request  and  discontinued  our  activities  in  aid  of  export  trade. 
The  consensus  of  opinion  of  the  Board  was  by  no  means 
unanimously  in  accord  with  the  Secretary  of  the  Treasury  on 
this  policy — speaking  for  myself  I  may  say  I  was  strongly 
opposed  to  it,  and  that  I  resigned  from  the  Board  of  Directors 
shortly  thereafter. 

In  requesting  us  to  discontinue  our  activities,  the  Secretary 
of  the  Treasury  gave  among  his  reasons  his  construction  of 
the  law  and  of  the  intent  of  the  Congress,  also  his  idea  as  to 
sound  financial  policies.  He  took  the  position  that  the  delay 
in  the  promulgation  of  formal  peace  had  extended  far  beyond 
the  time  that  the  Congress  might  have  expected,  and  that 
therefore  he  would  undertake  to  interpret  the  intentions  of 
the  Congress  as  to  time;  furthermore,  he  voiced  his  interpre- 
tation of  the  intent  of  the  Congress  by  referring  to  current 
high  prices  and  large  volume  of  business,  accompanied  by 
exports  large  in  dollar-value.  As  to  this,  I  said  then,  and  say 
now,  that  only  the  Congress  should  attempt  the  interpreta- 
tion of  its  own  intentions,  and  that  it  was  outside  the  proper 
functions  of  the  Board  of  Directors  of  the  Corporation  to 
govern  its  actions  by  its  supposition  of  intent. 

Slowing  Up  of  Business 

During  the  past  few  months  there  has  been  a  continual 
decrease  in  the  volume  of  business  and  prices  of  commodities 
have  declined.  In  many  cases,  prices  of  important  mineral 
and  agricultural  products  have  done  worse  than  decline — 
they  have  collapsed.  Business  has  been  greatly  unsettled  by 
an  existing  and  threatened  decline  in  exports  of  certain  fun- 
damental basic  commodities;  failing  of  export,  these  com- 
modities back  up  at  the  ports,  and  backing  up  at  the  ports, 
they  back  up  all  the  way  down  the  line,  through  the  exporters, 
the  manufacturers,  and  in  the  last  analysis  to  the  producers — 
the  farmers  and  miners ;  and  if  any  one  single  thing  could  be 
done  to  break  this  blockade  I  am  sure  that  the  most  helpful 
thing  that  could  be  done  would  be  the  revival  of  the  activities 
of  the  War  Finance  Corporation  in  aid  of  exports. 

Referring  again  to  the  suspension  of  the  Corporation's 
activities  last  May  at  the  request  of  the  Secretary  of  the 


THE   WAR  FINANCE  CORPORATION  433 

Treasury,  he  gave  at  that  time  among  his  reasons,  to  use  his 
own  words,  "Business  is  prosperous,  and  involuntary  unem- 
ployment is  negligible."  If  that  statement  covered  impelling 
reasons  at  that  time,  certainly  it  cannot  govern  today,  for  who 
today  will  say  of  the  business  of  America  that  it  is  prosperous 
and  that  the  existing  large  and  growing  unemployment  is 
voluntary  ?  Mr.  Forgan,  in  testifying  before  the  Senate  Com- 
mittee on  Reconstruction  and  Production  at  a  recent  hearing 
in  Chicago,  stated  that  last  May  he  was  in  accord  with  the 
policy  of  the  Secretary  of  the  Treasury  in  discontinuing  the 
Corporation.  I  asked  him  if  he  thought  business  was  pros- 
perous now :  He  stated  that  he  did  not.  I  asked  if  he  thought 
unemployment  was  negligible  now:  He  said  he  knew  there 
was  considerable  and  increasing  unemployment.  I  asked  him 
his  present  views  as  to  policy  with  respect  to  the  War  Finance 
Corporation:  He  said  that  he  thought  it  should  function  at 
his  time.  If  the  action  of  last  May  was  taken  because  of  the 
then  existing  conditions  which  now  no  longer  exist,  evidently 
the  question  of  reviving  the  Corporation's  activities  should 
receive  entirely  new  and  independent  consideration  based  on 
the  conditions  of  today. 

Powers  of  the  War  Finance  Corporation 

All  of  the  legal  powers  conferred  upon  the  Corporation  by 
the  amendment  of  March,  1919,  exist  today.  It  has  an  organi- 
zation, and  it  is  in  full  possession  of  all  of  its  paid-in  capital 
stock.  It  has  the  power  to  issue  bonds  in  excess  of  the  amount 
which  can  be  legally  advanced  under  the  amendment,  and  has 
cash  on  deposit  with  the  Treasurer  of  the  United  States  to 
the  amount  of  some  $370,000,000.  All  that  is  required  to  put 
it  again  into  helpful  functioning  in  aid  of  exports  is  that  the 
Secretary  of  the  Treasury  ask  the  Board  to  commence  func- 
tioning again.  In  this  connection  you  will  note  that  the 
activities  of  the  Corporation  were  only  suspended  last  May, 
not  permanently  stopped ;  the  word  "suspend"  in  itself  implies 
only  temporary  cessation,  so  that  activities  may  be  renewed 
when  the  occasion  demands. 

I  find  a  general  agreement  with  the  idea  that  the  activities 
of  the  War  Finance  Corporation  should  now  be  revived.  The 
National  Board  of  Farm  Organizations  has  endorsed  the  idea, 
and  manufacturers,  wherever  I  have  had  the  opportunity  of 


434  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

interviewing  them,  are  of  the  same  mind.  I  interviewed  a 
large  number  of  bankers  at  their  annual  convention  at  Wash- 
ington and  found  a  preponderant  opinion  in  favor  of  the  Cor- 
poration assisting  American  export  trade.  I  think  the  mining 
industry  is  the  only  large  group  that  has  not  expressed  itself 
on  this  question.  Meeting  as  you  do,  and  as  Mr.  Davis  so 
happily  pointed  out,  in  a  solemn  place,  and,  I  think,  at  a  very 
serious  moment  in  our  affairs  and  in  the  affairs  of  the  world, 
I  believe  that  in  addition  to  the  list  of  problems  already  on  its 
program,  the  Mining  Congress  might  well  consider  the  ques- 
tion of  the  marketing  conditions  which  are  handicapping 
mineral  production;  and  if  after  such  consideration  you  see 
fit,  I  should  be  very  glad  indeed  if  this  convention  would 
express  itself  in  favor  of  the  revival  of  the  activities  of  the 
War  Finance  Corporation. 

The  amendment  under  which  the  Corporation  was  func- 
tioning when  its  activities  were  suspended  last  May  was 
passed  with  the  support  of  the  mining  industry.  Producers, 
exporters  and  bankers  interested  in  the  mining  industry  ex- 
pressed their  views  through  Congressional  representatives 
in  the  House  and  Senate.  Furthermore,  representatives  of 
labor  employed  in  the  copper-mining  industry,  which  was 
particularly  affected  by  the  sudden  ending  of  the  war  and  the 
unusual  difficulties  of  the  readjustment  period,  happened  to 
be  meeting  in  Washington  at  the  time,  and  also  gave  substan- 
tial support  to  the  passage  of  the  amendment  by  expressing 
their  opinions  in  favor  of  the  Corporation's  assistance  to 
export  trade.  The  good  work  done  by  the  mining  interests  in 
connection  with  the  passage  of  the  amendment  could  well  be 
followed  by  action  in  connection  with  the  proposed  revival. 

If,  by  resolution  of  the  convention,  after  consideration,  or 
by  appointment  of  a  committee  through  the  convention,  you 
should  desire  to  investigate  the  question  further,  I  shall  be 
very  pleased  indeed  to  hold  myself  at  the  service  of  such  a 
committee,  or  at  the  service  of  the  convention,  to  go  into  de- 
tails and  furnish  any  and  all  information  that  is  within  my 
power.  The  Secretary  of  the  Treasury  has  taken  a  firm  stand 
on  the  matter,  and  I  hardly  think  that  there  is  any  possibility 
of  his  changing  his  mind  before  Congress  meets  on  December 
6.  There  will  be  legislation  introduced  on  the  subject  without 
any  question  when  Congress  meets,  and  if  you  have  made  up 


THE   WAR  FINANCE  CORPORATION  435 

your  minds,  after  careful  consideration,  that  you  are  in  favor 
of  the  War  Finance  Corporation's  assistance  to  foreign  trade, 
believing  that  it  is  not  only  in  your  interests  and  the  interests 
of  your  industries  and  the  people  dependent  thereon,  but  also 
in  the  interests  of  the  whole  nation,  in  fact,  of  the  whole  world, 
I  think  that  your  support  would  be  most  valuable.  I  should 
welcome  it,  and  I  am  sure  that  your  support  in  addition  to 
that  which  has  already  been  pledged  would  settle  definitely 
the  policy  of  the  country. 


436  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 


THE  GENERAL  COAL   SITUATION 

By  J.  D.  A.  MORROW,  Executive  Vice-President  National  Coal  Association, 

Washington,  D.  C. 

The  present  coal  situation  really  began  a  little  over  a  year 
ago  with  the  strike  of  the  coal  miners  with  which  you  are 
already  sufficiently  familiar.  When  that  strike  started,  stocks 
of  coal  in  the  United  States  were  53,000,000  tons,  practically 
all  bituminous.  During  the  course  of  the  strike,  40,000,000 
tons  in  production  were  lost,  and  most  consumers  had  to  use 
their  accumulated  stocks.  During  the  winter,  production  just 
about  kept  pace  with  consumption,  so  that  on  April  1,  1920, 
coal  stocks  in  the  country  were  at  the  lowest  figure  of  which 
anyone  had  record  on  that  date,  totaling  only  23,000,000  tons. 
These  were  not,  properly  speaking,  stocks  at  all;  they  were 
merely  the  country's  working  coal  capital ;  by  that  I  mean  the 
small  quantities  of  coal  that  every  industrial  plant  has  on 
hand  to  tide  over  irregularities  in  its  coal  receipts. 

Coal  Stocks  Low  Instead  of  High 

About  April  1  of  each  year,  it  is  the  natural  wish  and  effort 
of  every  industrial  consumer  to  begin  storing  coal  for  the 
following  winter.  That  is  particularly  true  in  the  North- 
west, where  coal  is  shipped  by  way  of  the  Lakes,  and  in  New 
England,  Northern  New  York,  and  so  on.  But  the  outlaw 
switchmen's  strike  in  April  so  interfered  with  the  movement 
of  coal  that  it  was  not  possible  to  ship  even  coal  enough  to 
meet  ordinary  demands  in  the  eastern  half  of  the  United 
States.  About  June  1,  instead  of  consumers  having  built 
up  their  coal  stocks  they  had  lost  ground,  so  that  on  that  date 
stocks  of  bituminous  coal  were  only  20,000,000  tons.  Thus 
this  country  faced  a  deficit  of  20,000,000  to  25,000,000  tons, 
chiefly  bituminous.  It  faced  that  deficit  with  a  disorganized 
transportation  system  upon  which  it  had  relied  for  its  ship- 
ments. There  has  been  no  time  in  the  history  of  the  country, 
so  far  as  we  have  any  adequate  record,  when  as  bad  a  condi- 
tion prevailed. 

Fortunately,  the  railway  people  understood  their  situation 


THE  GENERAL  COAL  SITUATION  437 

very  well,  and  the  coal  men  understood  theirs  fairly  well ;  and 
while  they  did  not  have  complete  figures,  they  had  enough 
information  to  know  what  the  position  last  June  meant. 
Accordingly,  they  went  to  the  Interstate  Commerce  Commis- 
sion and  insisted  that  coal  must  have  preference  in  transpor- 
tation, because  there  were  not  facilities  enough  to  haul 
everything  which  people  wanted  to  carry  in  open-top  cars,  so 
it  came  to  a  question  of  deciding  whether  the  United  States 
was  to  have  all  the  coal  it  wanted,  or  whether  it  should  have 
all  the  sand,  gravel,  lumber  and  thousands  of  other  things  it 
wanted.  All  were  not  possible,  so  some  choice  had  to  be  made 
as  to  what  should  be  sacrificed.  The  suggestion  and  position 
of  the  Interstate  Commerce  Commission  was  that  preferential 
car  supply  be  given  the  mines,  and  the*  Commission  issued  such 
an  order  in  the  middle  of  June.  After  that,  coal  production 
which  had  been  at  the  rate  of  9,500,000  tons  of  bituminous 
per  week,  began  to  rise.  In  spite  of  that  order,  however,  ship- 
ments did  not  reach  those  required.  By  September  we  were 
still  behind,  and  the  Commission  realized  that  some  final  and 
drastic  action  should  be  taken.  At  that  time  it  put  another 
order  into  effect  and  canceled  its  permits  to  other  shippers  to 
use  open-top  cars,  when  the  production  of  bituminous  rose  to 
12,000,000  tons  a  week,  and  that  figure  has  been  maintained 
ever  since. 

In  consequence  of  keeping  up  that  high  output,  the  deficit 
of  20,000,000  tons  on  June  1  has  dropped  now  (November) 
to  5,000,000  tons,  and  the  output  is  so  increased  that  we  feel 
confident  there  is  no  danger  of  any  acute  shortage  for  this 
winter,  barring  unforeseen  circumstances.  Substantially,  the 
worst  is  over,  and  the  country  is  safe  from  any  coal  shortage 
this  winter. 

The  condition  of  extreme  shortage  of  supply  and  inability 
to  obtain  adequate  current  shipments  was  one  that  produced 
perfectly  natural  consequences.  There  is  nothing  mysterious 
about  it,  and  nothing  that  justifies  some  of  the  charges  that 
have  been  made. 

How  Some  Firms  Got  Coal 

Some  industrial  consumers  sent  their  purchasing  agents 
into  the  fields  to  get  coal  at  any  cost.  It  was  not  a  matter  of 
price;  the  agents  were  advised  that  if  they  did  not  obtain 


438  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

fuel,  thereby  compelling  the  factories  to  shut  down,  they 
would  be  fired.  One  railroad,  I  am  advised,  had  four  men 
buying  coal  at  the  same  time;  and  I  know  of  one  instance 
where  those  four  men  bid  against  each  other  on  400  cars  of 
coal,  and  raised  the  price  $1  a  ton.  This  increase  was,  of 
course,  wholly  unnecessary,  and  could  have  been  avoided  if 
that  business  had  been  conducted  sensibly. 

I  know  of  one  manufacturer  who  contracted  for  coal  under 
those  same  circumstances  for  a  year  at  $20  per  ton,  including 
a  freight  charge.  Why  did  any  ordinarily  sane  man  take  such 
action?  He  said  there  was  nothing  mysterious  about  it. 
He  said,  "I  am  satisfied  that  coal  bought  at  that  price 
will  enable  me  to  get  the  production  of  the  mine,  and  if 
the  particular  mine  I  get  it  from  strikes,  or  something  else 
happens,  there  will  be  enough  profit  in  it  for  those  people  so 
that  they  will  go  out  and  get  me  the  coal."  Now,  how  much 
difference  did  that  price  make  to  him?  His  manufactured 
product  sells  at  $100  per  machine,  and  at  $20  per  ton,  his  coal 
cost  would  be  only  30  cents  per  machine.  Figured  on  the 
basis  of  30  cents  per  unit,  he  could  have  afforded  to  pay  $100 
a  ton  for  coal  rather  than  shut  down. 

The  competition  of  men  such  as  that,  and  other  similar 
buyers  of  coal,  afforded  an  opportunity  for  the  speculator  to 
bid  up  the  price  against  the  poorer  buyer,  and  to  make  a  price 
that  was  almost  prohibitive  for  the  consumer  who  had  to  use 
large  quantities  of  coal. 

Coal  Speculators 

Let  me  speak  of  speculation :  It  is  a  new  thing  for  the  coal 
industry;  we  never  had  an  experience  of  that  kind  before. 
During  the  war  there  were  speculators  in  poison  gas,  shells, 
and  a  hundred  other  commodities.  Men  who  knew  nothing 
about  such  things  before  made  what  they  could ;  and  the  same 
thing  happened  in  coal.  Some  coal  speculators  in  New  York — 
it  is  the  only  type  of  description  they  deserve — who  were 
quite  a  factor  in  the  business,  were  traced  to  find  out  who  they 
were.  We  found  that  they  were  corset  manufacturers,  cigar- 
makers,  bootblacks,  anybody  and  everybody.  They  had  no 
interest  in  the  coal  business  except  this :  that  if  they  could  get 
hold  of  a  few  cars  of  coal  they  would  sell  that  coal  to  the  man 


THE  GENERAL  COAL  SITUATION  439 

who  needed  it  the  worst,  for  the  highest  price.  Of  course, 
that  brought  disrepute  upon  the  industry. 

With  the  return  of  prices  to  normal  there  is  no  opportunity 
for  such  a  man  to  do  that  kind  of  business ;  and  I  want  to  point 
out  at  this  time  the  fact  that  a  price  situation  of  this  kind  can 
arise  simply  and  solely  through  the  force  of  competitive 
influences,  without  any  manipulation  or  combination ;  and  that 
is  exactly  what  happened  last  summer.  Just  reversing  the 
process,  when  you  get  an  over-supply  of  coal  that  nobody 
wants  prices  go  down  out  of  sight. 

The  distinctive  phase  about  the  action  of  the  Interstate 
Commerce  Commission  was  this:  For  the  first  time  in  its 
history  it  took  prompt,  effective,  business-like  action  to  solve 
an  administrative  problem,  and  solved  it.  They  conferred 
with  a  few  of  the  responsible  men  from  the  American  Rail- 
way Commission,  headed  by  Daniel  Willard  of  the  Baltimore 
&  Ohio  Railroad,  also  with  committees  of  the  National  Coal 
Association,  who  agreed  as  to  the  facts  and  as  to  the  action  that 
should  be  taken.  The  Commission  adopted  the  recommenda- 
tions outright  in  most  instances,  and  put  them  into  effect, 
giving  preferential  cars  for  the  movement  of  coal  to  the 
Northwest,  because  it  had  to  be  hauled  to  the  Lakes  before 
they  froze,  otherwise  the  people  in  Wisconsin,  North  Dakota, 
and  those  States  would  have  been  without  enough  coal. 

Conditions  in  New  England 

Another  section  of  the  country  that  was  in  a  bad  way  for 
coal  was  New  England.  The  reason  for  that  region  being  in 
such  a  condition  was  different.  The  Northwest  gets  the 
greater  part  of  its  coal  by  water,  while  New  England,  before 
the  war,  got  the  most  of  its  coal,  or  a  little  more  than  half  of 
it  by  water.  The  coal  went  by  rail  to  Philadelphia,  New 
York,  Baltimore  and  Hampton  Roads,  then  to  New  England 
by  water.  The  remainder  would  go  by  rail  across  the  Hudson 
River.  In  the  spring  of  1920  there  was  a  material  difference 
in  New  England,  in  the  delivered  price  of  coal,  depending  on 
how  it  was  shipped.  If  it  went  by  water,  the  people  there 
would  pay  $1.50  to  $1.75  more  per  ton  than  if  they  took  it  all 
by  rail.  You  people  are  probably  fairly  well  informed  as  to 
some  of  the  outstanding  characteristics  of  New  England 
people.  A  difference  of  $1.50  per  ton  in  coal  prices  would 


440  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

cause  anyone  to  stop  and  consider,  but  for  a  New  Englander 
such  a  variation  is  a  matter  for  prayer.  New  England  tried 
to  buy  all  of  her  coal  for  all-rail  delivery.  It  could  not  be 
done.  Its  railways  were  not  able  to  handle  that  business; 
they  were  already  hauling  more  coal  than  ever  before.  How- 
ever, that  was  not  enough  for  New  England,  and  they  were 
steadily  accumulating  a  deficit  on  account  of  the  $1.50  differ- 
ence in  freight  rates  which  was  going  to  create  disaster  this 
winter,  and  yet  at  the  same  time  they  were  "hollering"  for 
the  appointment  of  a  fuel  administrator  to  look  after  the  coal. 
We  met  the  committee  representing  the  New  England  Gov- 
ernors, explained  our  views  to  them,  and  worked  out  a  plan 
for  New  England  coal  relief.  That  scheme  protected  them 
in  part  from  the  effect  of  foreign  bidding  for  coal  in  Atlantic 
ports  by  seeing  that  the  coal  consigned  to  New  England  could 
not  go  elsewhere.  They  were  protected  against  outside  bids, 
and  were  enabled  to  buy  that  coal  at  a  better  price  than  they 
could  in  the  open  market.  The  New  England  wholesalers  and 
distributors  agreed  to  take  that  coal  in  and  start  a  campaign 
of  education  with  their  customers,  explaining  that  this  was 
their  opportunity  to  get  coal,  and  if  they  did  not  embrace  it, 
even  at  the  high-water  freights,  then  heaven  help  them,  for 
no  one  else  would. 

We  had  to  say  some  very  pointed  things  to  that  committee 
of  New  England  Governors.  They  wanted  1,250,000  tons  of 
coal  monthly,  and  they  wanted  to  distribute  it  through  State 
governmental  machinery.  We  told  them  frankly,  "No  sir.  If 
you  propose  to  put  the  New  England  State  governments  or 
the  Federal  Government  into  this  game  of  coal  supply  and 
distribution  you  will  do  it  without  our  help  and  against  our 
opposition.  We  will  do  everything  to  give  you  coal  if  the 
ordinary  business  agencies  of  New  England  will  handle  it, 
but  we  will  not  encourage  socialism  in  the  United  States,  and 
least  of  all,  in  New  England."  They  agreed  to  let  the  New 
England  business  men  handle  the  coal,  but  being  Yankees, 
they  vigorously  insisted  that  they  must  have  1,250,000  tons. 
While  we  were  confident  that  1,000,000  tons  was  all  they 
needed,  we  gave  them  1,250,000  tons.  We  said,  "We  are 
satisfied  you  cannot  use  all  of  this  coal,  but  we  are  going  to 
give  it  to  you  and  bury  you  under  it  before  we  get  through," 
and  we  did  so.  In  six  weeks  their  hands  went  up  and  they 


THE  GENERAL  COAL  SITUATION  441 

said:    "You  are  going  to  have  to  reduce  those  shipments  be- 
cause we  cannot  take  the  coal." 

It  was  somewhat  the  same  condition  with  the  Northwest. 
It  took  some  persistent  effort  there  too,  but  they  are  now  out 
of  the  woods  also. 

What  the  National  Coal  Association  Helped  Do 

That  indicates  the  kind  of  work  we  had  to  do,  in  a  broad 
way,  through  the  National  Coal  Association,  in  the  past  six  or 
seven  months.  It  is  gratifying  to  tell  you  that  the  industry 
has  solved  those  problems  and  overcome  those  difficulties  by 
co-operating  with  the  appropriate  branches  of  the  Govern- 
ment, but  without  resort  to  extensive  and  far-reaching  re- 
sumption of  Government  control  of  the  coal  industry. 

What  is  the  situation  we  face  today?  You  have  a  concrete 
illustration  of  it  right  out  here  (Colorado) .  A  distinguished 
member  of  the  United  States  Senate  comes  to  your  city 
(Denver)  and  gives  his  views  upon  what  ought  to  be  done  in 
connection  with  the  coal  situation  in  the  next  few  years,  and 
for  all  time  to  come.  His  ideas  embrace  national  control  of 
operation  of  the  coal  mines  and  the  sale  of  their  product.  But 
we  are  opposed  to  Government  control  or  regulation.  One  of 
the  worst  instances  of  this  is  the  law  in  respect  to  coal  in 
Indiana.  This  put  the  State  in  complete  control  of  the  coal 
industry;  gave  it  authority  to  fix  prices;  required  the  opera- 
tors to  produce  coal  at  the  prices  named,  and  ship  the  quan- 
tities required  for  the  needs  of  the  State  at  those  prices  to 
consumers  named  by  the  State,  regardless  of  any  other  con- 
siderations. Please  observe  the  vicious  neatness  with  which 
they  thought  they  avoided  interference  wijh  interstate  com- 
merce :  They  said,  "We  don't  refuse  these  operators  the  right 
to  ship  their  coal  in  interstate  commerce  we  don't  trans- 
gress their  constitutional  guarantees;  they  can  ship  all  the 
coal  they  want  in  interstate  commerce,  just  so  long  as  they 
ship  all  the  coal  we  want  in  Indiana  to  Indiana  consumers  at 
Indiana  prices."  That  law  is  going  to  be  fought  by  the  coal 
operators.  This  case  will  be  taken  to  the  Supreme  Court,  and 
we  hope,  of  course,  that  the  State  will  be  defeated.  We  think 
that  this  legislation  will  be  declared  unconstitutional. 

Those  are  some  of  the  reasons  why  these  coal  people  regard 
this  present  situation  with  a  good  deal  of  concern.  We  feel 


442  PROCEEDINGS   OF   AMERICAN   MINING  CONGRESS 

that  we  have  faced  an  extremely  acute  situation,  and  got  out 
of  it  remarkably  well.  It  is  conclusive  evidence  of  the  fact 
that  practical  branches  of  the  Government  working  with 
practical  men  in  business,  in  any  business,  can  meet  these 
economic  problems  as  they  arise,  and  that  ought  to  be  enough. 
If  the  Government  is  to  take  a  hand  in  business,  we  should 
meet  that  issue  right  now  and  be  done  with  it.  It  is  a  condi- 
tion that  requires  the  co-operation  not  only  of  coal  men,  but 
also  the  co-operation  of  all  business  interests,  and  certainly 
of  all  the  mining  industry. 


DENVER  AND  THE  OPEN-SHOP  443 


DENVER  AND  THE  OPEN-SHOP 

By  L.  WARD  BANNISTER, 
Counselor  at  Law,  Denver,  Colorado 

In  considering  the  open-shop  condition  in  Denver,  I  have 
made  a  brief  classification :  open-shop — machine-shops,  packing 
plants,  stores,  terra-cotta  manufacturers,  meat-cutters,  auto- 
mobile shops,  woodworkers,  elevators,  and  railroad  officers; 
entirely  or  almost  entirely  closed — building  trades  (17  crafts), 
patternmakers,  railroad  shops,  barber  shops,  transfer  and 
storage-houses,  billposters,  brickyards  and  candy  manufac- 
turers. As  for  the  foundries,  there  are  about  20  in  Denver,  12 
open  and  8  closed.  As  for  public  utilities,  they  are  run  upon 
the  open-shop  plan,  and  the  recent  strike  of  tramway  employes 
ended  undoubtedly  in  maintaining  the  open-shop.  The  Denver 
Civic  and  Commercial  Association,  and  such  semi-commercial 
organizations  as  the  Kiwanis  Club,  the  Lion's  Club  and  the 
Optimists  Club,  have  resolved  unanimously  in  favor  of  the 
open-shop.  Undoubtedly,  the  tendency  in  Denver  is  in  its 
favor.  The  leading  organization  in  support  of  the  movement 
is,  without  doubt,  the  Employers'  Association.  This  is  said  to 
consist  of  400  members.  It  has  a  card  index  list  of  4500  em- 
ployes who  are  willing  to  work  on  the  open-shop  plan.  It  has 
a  legal  department ;  it  has  a  secret  service,  and  it  tends  to  pro- 
mote, as  far  as  it  is  possible,  the  open-shop  movement  in  this 
city.  We  acknowledge  the  inestimable  benefits  of  unionism  to 
labor ;  in  fact,  to  society  at  large,  yet  the  principle  of  the  open- 
shop  is  based  on  the  soundest  principles,  as  conditions  now  are, 
and  we  say  that  the  position  of  labor  in  favor  of  a  closed  shop 
is  socially  wrong. 

Capital  and  Labor  in  Society 

I  do  not  like  to  argue  the  case  of  the  open-shop  by  making 
use,  as  is  so  often  done,  of  the  right  of  non-union  men  to  work. 
It  has  always  seemed  to  me  that  this  is  a  disingenuous  ground 
furnished  and  employed  by  employers  to  maintain  their  cause. 
It  seems  to  me  that  capital  has  a  legitimate  position  in  modern 
society,  and  it  can  present  a  defense  in  its  own  rights,  and 


444 


PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 


that  it  need  not  rest  upon  the  rights  of  the  non-union  men.  In 
the  first  place,  the  employer  has  a  right  in  bargaining  with  a 
union  for  the  delivery  of  certain  human  service,  to  bargain 
with  a  union  whose  funds  and  assets  are  like  those  of  the 
employer  or  any  private  citizen,  and  are  amenable  to  judicial 
process.  As  the  law  stands  at  the  present  time,  these  assets 
cannot  be  reached  in  any  way  that  is  feasible,  because  the  old 
common  law  rule  prevails  in  this  respect  in  Colorado  and 
in  most  of  the  States  of  the  Union,  under  which  a  union  which 
is  treated  as  a  voluntary  association,  and  requiring,  in  order  to 
hold  the  assets  of  that  association,  the  services  of  summons  or 
process  upon  every  member  of  the  union.  Now,  it  has  been  sug- 
gested that  there  is  relief  from  that  situation  by  requiring 
labor  unions  to  incorporate.  That  would  be  a  relief,  but,  on  the 
other  hand,  such  requires  an  affirmative  act  on  the  part  of 
organized  labor,  and  to  require  an  affirmative  act  of  that  kind 
savors  of  a  species  of  tyranny.  The  general  situation  can  b( 
reached  much  more  simply  by  amending  the  statutes  relating 
to  the  service  of  process.upon  voluntary  associations,  by  chang- 
ing the  law  so  that  the  service  upon  an  officer  of  the  association, 
instead  of  upon  all  the  members  of  the  association,  is  a  com- 
plete service  upon  the  association,  so  that  in  case  of  a  judg- 
ment against  it,  the  assets  or  funds  of  the  association  may 
held.  That  is  simple.  That  has  already  been  done  in  Colorado, 
where  it  happens  that  the  voluntary  association  is  a  business 
men's  association.  Let  us  change  it  again  so  that  the  same  rule 
will  apply  where  the  association  is  one  of  workingmen,  just 
in  the  case  of  the  business  man.  In  the  next  place,  it  seems 
me  that  it  is  axiomatic  that  an  employer  has  the  right  not 
commit  suicide,  but  the  right  to  live.  If  we  believe  in  individ- 
ualism, as  I  do,  then  I  repeat  it,  that  capital  is  a  useful,  a  legiti- 
mate and  a  much-needed  agency  in  modern  industry  and  in 
social  life,  and  the  employer  who  has  capital  invested  and  is 
engaged  in  production,  has  the  right  in  his  own  behalf  and 
on  his  own  feet  to  demand  that  he  be  not  compelled  to  commil 
suicide.  And  yet,  what  happens  ?  Union  labor  is,  as  I  say,  ol 
the  greatest  value  to  labor,  the  greatest  value  to  us  all,  and  yet 
it  is  fast  becoming 'a  great  trust.  It  numbers  today  between 
4,000,000  and  5,000,000  members ;  it  collects  and  it  dispenses 
money  by  the  millions ;  it  has  its  secret  service ;  it  has  its  leg* 


DENVER  AND  THE  OPEN-SHOP  445 

departments;  it  even  has  its  departments  of  economics.  All 
of  that  is  very  well — excellent — but  what  we  have  the  right  to 
object  to,  which  right  the  employer  and  public  have  also,  is  the 
fact  that  this  great  labor  trust  is  without  sufficient  control 
on  the  part  of  public  authority.  If  a  controversy  exists  be- 
tween labor  and  employing  interests,  there  is  no  power  to 
limit  the  price  that  this  trust  may  demand  from  these  in- 
terests for  the  human  service  which  is  to  be  supplied. 

Is  Human  Labor  a  Commodity? 

I  know  that  it  is  argued  by  Mr.  Samuel  Gompers  and  other 
labor  leaders  that  labor  is  not  a  commodity;  that  it  therefore 
ought  not  to  be  subject  to  regulations.  I  do  not  say  whether 
human  service  is  a  commodity  or  not,  but  whatever  it  be,  I 
know  one  thing,  that  a  trust  in  human  service  can  be  just  as 
vicious  in  its  effect  upon  industry  and  upon  the  general  welfare 
as  can  a  trust  in  the  form  of  a  trust  of  commodities.  When  the 
labor  organizations  of  this  country,  along  with  the  organiza- 
tions of  employers,  will  consent  to  have  their  controversies 
when  they  cannot  be  settled  among  them  themselves  in  some 
way  disposed  of  by  some  Governmental  authority,  then  the 
labor  trust  need  not  be  feared  so  much.  But,  for  the  employer 
now  to  enter  into  a  closed-shop  contract  with  a  labor  union  is 
to  extend  the  power  and  the  influence  and  add  to  the  member- 
ship of  organized  labor.  Let  him  beware  in  the  meantime  of 
creating  a  great  agency  which  may  fall  upon  the  creator. 
We  see  the  danger  a  little  more  clearly  when  we  reflect  upon 
this,  that  in  the  ranks  of  organized  labor  now  under  a  fairly 
conservative  control  there  is  a  high  percentage  of  Socialists, 
and  if  in  the  course  of  labor  evolution  these  Socialists  obtain 
control  of  this  organized  labor,  how  easy  it  will  be  to  do  that 
for  which  the  Socialists  hope,  or  most  of  them  hope,  namely,  to 
seize  by  violence  at  some  concerted  moment  the  factories  and 
the  mines  of  this  country.  So  I  say  that  the  employer  has  ample 
ground,  under  conditions  as  they  exist  at  the  present  time,  not 
to  enter  into  a  contract  with  a  union  for  a  closed  shop. 

Open-Shop  Only  One  Phase  of  Industrial  Disputes 

The  open-shop  controversy  is  only  one  phase  of  the  larger 
industrial  controversy.  At  the  present  time  it  occupies  the 
firing  line,  but  in  time  other  phases  will  take  their  turn.  Mod- 


446  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

ern  invention,  with  its  accompanying  increase  in  production, 
with  its  division  of  labor,  its  great  diversity  of  interest  be- 
tween the  employer  and  employe,  not  so  much  in  the  matter  of 
production  as  in  one  of  distribution,  with  a  possibility  that 
monopolies  and  other  evils  will,  as  a  consequence,  be  endan- 
gered, is  the  cause  of  most  of  the  troubles  of  an  economic  diffi- 
culty that  afflicts  us.  But  the  future  is  not  entirely  without 
hope.  Most  employers  are  honest,  and  most  employes  are 
honest ;  most  of  the  men  in  both  classes  are  industrious ;  most 
of  them  are  men  that  want  to  be  honest  and  do  justice  to  each 
other;  and  then,  too,  the  future  is  a  little  more  hopeful  when 
we  consider  that  the  problems  that  beset  us,  the  ills  among 
which  we  find  ourselves,  are,  after  all,  the  result  of  our  own 
greatness.  If  we  did  not  possess  the  genius  for  mechanical  in- 
vention, these  things  never  would  have  come,  and  if  we  have  the 
genius  to  invent  such  appliances,  we  probably  can  solve  the 
problems  that  have  resulted  from  them. 

Supremacy  of  the  Law 

We  have  also  made  up  our  minds  that  we  are  going  to  stand 
for  the  unequivocal  and  absolute  supremacy  of  the  law.  There 
is  no  room  for  compromise  between  the  law  of  a  democracy 
and  any  of  the  violators  of  that  law  who  live  within  that  democ- 
racy. We  have  also  made  up  our  minds  to  do  one  thing  more : 
We  will  stand  by  the  bases  of  the  present  economic  system  of 
regulated  individualism  as  against  the  opposing  system  of  So- 
cialism. We  are  willing  to  compare  the  superior  production 
under  individual  initiative,  of  regulated  individualism,  with 
the  inferior  production  under  Socialism,  and  we  are  willing  to 
compare  the  freedom  —  the  economic  freedom  —  that  exists 
under  individualism,  with  its  multiple  centers  of  control — for 
every  employer  is  a  center  of  control — and  the  producers  who 
number  hundreds  of  thousands,  with  the  tyranny  of  a  single 
centered  system  of  control  which  is  characteristic  of  Socialism. 
We  will  stand  by  the  main  principles  of  our  present  system  of 
regulated  individualism.  We  know  that  that  system  is  faulty, 
and  if  we  are  wise  we  will  see  to  it  that  these  defects  are  so  far 
corrected  that  the  great  mass  of  our  people  will  enjoy  the 
benefits  of  individualism  which  are  ours,  for  if  we  are  polit 
cally  sagacious  we  know  that  unless  any  given  economic  sys- 


DENVER  AND   THE  OPEN-SHOP  447 

tern  which  obtains  in  a  democracy  has  the  support  of  the  great 
majority  of  the  people  who  live  under  it,  it  will  not  surviv^ 
When  we  consider  those  defects,  we  find  that  nearly  every  one 
is  a  defect,  not  at  all  essential  to  the  system,  but  susceptible 
of  cure. 

Low  Wages 

In  the  first  place,  one  of  the  great  defects  of  that  system — 
and  the  one  which  I  think  is  more  involved  in  the  controversy 
about  the  open-shop — is  the  tendency  to  low  wages  manifested 
by  individualism  unless  it  is  regulated.  The  advantage  is  with 
the  employer.  He  is  the  one  who  has  the  vision  of  the  indus- 
try, the  opportunity  to  create  some  new  wealth  or  transport 
it  in  some  new  way,  or  distribute  it  in  some  new  fashion, 
with  more  advantages  than  before;  he  controls  the  raw 
materials ;  he  controls  the  markets ;  he  attends  to  the  financing. 
He  is  in  the  position  that  is  not  occupied  by  the  employes,  who 
are  obliged  to  sell  their  service.  To  do  it,  they  compete  one 
with  the  other,  to  sell  to  this  man  who  by  his  genius  holds  the 
key  to  the  situation.  Competition  naturally  bears  down  the 
wages,  but  in  spite  of  that  there  is  a  remedy,  and  it  is  to 
be  found  in  the  very  device  claimed  by  labor;  one,  I  am 
glad  to  say,  that  others  here  believe  in,  that  of  collective  bar- 
gaining. The  individual  man  cannot  alone  go  up  against  the 
power  and  resources  of  the  employer,  but  if  we  are  to  have  col- 
lective bargaining,  it  will  come  under  one  or  other  of  two  meth- 
ods, either  with  the  union — in  which  event  it  will  be  with  a 
union  whose  assets  are  amenable  to  judicial  process,  and  whose 
controversies  are  subject  to  decision  by  public  author ity: — or 
else  it  will  come  through  the  form  of  co-operative  management 
or  employe  representation,  which  has  been  discussed  so  ably  at 
this  Convention.  This  latter  system  to  me  seems  to  be  an  ideal 
system  of  meeting  the  problem  of  collective  bargaining.  The 
unions,  as  unions,  have  always  been  strong  on  the  distribution 
of  wealth,  but  weak  on  its  production,  just  as  the  employer 
has  tended  to  be  strong  on  production  and  weak  on  the  dis- 
tribution ;  but  under  the  plan  of  the  co-operative  management 
or  employe  representation,  both  sides  will  sit  down  together 
and  work  out  the  necessities,  the  needs  and  the  future  of  the 
individual  plant,  and  in  that  way  labor  will  have  its  collective 


448  PROCEEDINGS   OF  AMERICAN   MINING   CONGRESS 

bargaining  and  the  employer  gets  what  he  is  after,  and  what 
society  needs,  steady  and  uninterrupted  production.  So  I  say 
that  the  low-wage  problem,  which  results  from  modern  indus- 
try, is  not  beyond  remedy. 

Individualism  Should  Be  Regulated 

Unregulated  individualism  results  in  monopoly.  Sometimes 
it  is  city- wide  in  its  influence;  sometimes  State-wide,  some- 
times nation-wide ;  but  even  that  will  yield  to  the  treatment  of 
price  regulation.  We  complain  sometimes  of  inheritances, 
but  all  of  this  may  be  reached  by  the  inheritance  tax.  We 
complain  of  the  fight  among  utilities  companies,  the  unneces- 
sary duplication,  but  this  situation  likewise  may  be  relieved 
by  public  control;  and  I  merely  wish  to  point  out  that  the 
great  system  of  individualism,  regulated  individualism,  is 
sound  at  heart,  and  that  the  defects  which  it  possesses,  and 
for  which  many  people  challenge  the  system  itself,  are  all 
defects  which  are  amenable  to  cure. 

The  relation  of  man  to  industry  we  begin  to  perceive.  Men 
are  not  made  for  industry  any  more  than  for  the  Sabbath,  but 
as  the  Sabbath  was  made  for  man,  so  was  industry.  The  min- 
ing industry  is  a  great  business,  and  so  are  railroads  and 
banking;  but  there  is  one  business  that  is  even  greater,  and 
that  is  the  social  business,  the  one  in  the  management  of  which 
you  and  I  join,  the  one  that  is  for  us  all,  and  has  for  its  end 
the  development  of  a  masterful,  achieving,  well-fed,  well- 
housed,  well-clothed  people,  the  people  of  the  America  to  be. 


ENGLISH  IN  MINING  ENGINEERING  449 


EDUCATION  AND  PUBLIC  SERVICE 
CONFERENCE 


THE    PLACE    OF    ENGLISH    IN   THE   TRAINING    OF   THE 
MINING  ENGINEER 

By  H.  H.  STOEK 

Professor  of  Mining  Engineering,  University  of  Illinois,  Urbana,  111. 

There  are  three  parts  in  the  training  and  education  of 
every  technical  man:  first,  the  experience  gained  by  doing 
something  personally,  or  by  seeing  others  do  it,  commonly 
called  practical  experience;  second,  knowledge  gained  by  read- 
ing and  study  commonly  called  theoretical  training;  and 
third,  the  crystallizing  and  clarifying  of  this  practical  and 
theoretical  knowledge  by  writing  and  speaking. 

By  writing  and  speaking  I  do  not  mean  only  the  more  for- 
mal and  elaborate  preparation  of  books,  papers  for  technical 
institutes,  articles  for  the  technical  press  and  such  formal 
addresses  as  may  be  made  from  a  lecture  platform,  but  include 
under  the  same  head  the  various  reports,  instructions,  speci- 
fications, etc.,  either  written  or  verbal,  which  every  engineer 
must  make  in  his  daily  work. 

Value  of  Experience,  Study,  and  Writing 

It  is  not  necessary  to  argue  for  the  value  of  practical 
experience,  reading  and  study,  although  different  ones  may 
give  a  different  proportionate  value  to  each  of  these  forms  of 
preparation.  The  value  of  clear  writing  and  speaking  is  not, 
however,  appreciated  as  fully  as  it  should  be  by  most  tech- 
nical men.  Many  men  probably  fail  to  be  promoted  to  posi- 
tions of  greater  responsibility,  not  because  of  their  lack  of 
technical  knowledge  and  experience,  but  because  they  cannot 
impart  information  to  others  so  that  other  men  can  carry  out 
their  ideas.  A  Chinese  student  in  mining  at  the  University 


450  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

of  Illinois  several  years  ago  answered  the  question,  "What  is 
the  value  of  English  speaking  and  writing  to  a  mining  engi- 
neer?" by  .saying  "The  man  who  knows  how  to  ask  for  what 
he  wants  generally  gets  it."  I  believe,  therefore,  that  ability 
to  handle  English,  both  by  writing  and  speaking  it  clearly, 
should  be  given  a  fundamental  place  in  the  training  of  every 
engineer. 

This  was  never  more  true  in  connection  with  mining  than 
it  is  at  the  present  time,  when  everyone  in  authority  about  a 
mine  plant  must  act  as  instructor  to  the  foreign  element  that 
is  carrying  on  most  of  the  mining  labor,  and  which  has  come 
to  us  from  southeastern  Europe  without  a  knowledge  of  our 
language  and  with  no  background  in  the  way  of  preliminary 
mine  training.  Also  with  the  increasing  number  of  confer- 
ences between  employers  and  employes,  there  is  a  greater 
necessity,  not  only  for  clear  thinking  but  for  clear  expression. 

Of  what  value  is  writing  and  speaking  to  the  writer  and 
speaker?  One  of  the  points  of  greatest  value  in  technical 
writing  is  the  fact  that  it  necessitates  careful  and  minute 
observation.  Let  anyone  attempt  to  describe  in  writing  some 
machine  or  some  operation  about  his  plant  with  which  he 
thinks  he  is  perfectly  familiar,  and  he  will  immediately  find 
out  how  many  things  there  are  about  it  which  he  knows  in  a 
general  way  but  which  he  cannot  describe  in  such  detail  that 
he  will  be  willing  to  have  his  description  go  before  others  for 
their  criticism;  moreover,  he  will  be  surprised  how  often  he 
has  to  look  up  details  with  which  he  thought  he  was  perfectly 
familiar.  There  is  no  better  way  for  a  person  to  find  out  how 
little  he  knows  about  a  subject  than  to  start  to  write  an  article 
about  it. 

Observation  and  Thought 

Another  illustration:  attempt  to  describe  to  a  bright  boy 
12  or  14  years  old  how  a  certain  machine  works,  and  see  how 
quickly  he  will  call  upon  you  for  greater  detail  and  clearer 
expression.  No  one  can  describe  clearly  what  he  does  not 
understand  himself.  Technical  writing  necessitates,  there- 
fore, not  only  careful  observation,  but  it  necessitates  clear 
and  systematic  thinking  in  order  to  be  able  to  present  to 
others  an  idea,  even  after  that  idea  has  been  thoroughly  mas- 


ENGLISH  IN  MINFNG  ENGINEERING  451 

tered  by  ourselves.  It  therefore  trains  the  eye,  the  brain  and 
the  hand. 

While  there  are  many  good  men  who  cannot  write  or  talk, 
the  man  who  can  clearly,  logically,  and  accurately  express  his 
thoughts  has  a  decided  advantage  in  the  industrial  race  over 
the  one  who  cannot  do  so.  A  great  need  today  is  careful 
observation  and  the  reporting  of  this  observation. 

If  we  admit  that  training  in  English  expression  is  of  value, 
how  can  it  best  be  secured?  Naturally,  such  training  should 
begin  low  down  in  the  grade  schools,  and  it  is  an  unfortunate 
fact  that  too  much  of  the  training  there  is  given  by  improperly 
prepared  teachers.  In  the  college  or  university  the  usual 
classes  in  rhetoric  are  common  and  fairly  standardized,  though 
frequently  very  unpopular,  because  taught  by  those  who  look 
upon  English  entirely  from  the  cultural  standpoint  and  fail 
to  impress  their  students  with  the  fact  that  rhetoric  is  a  fun- 
damental for  an  engineer. 

The  choice  of  subjects  for  English  essays  is  often  another 
form  of  discouragement  to  the  technical  college  student.  The 
teachers  of  English,  however,  are  by  no  means  the  only  and 
probably  not  the  greatest  sinners  in  this  respect,  for  the 
teachers  of  engineering  set  a  bad  example  frequently  by  their 
own  slipshod  and  too  often  slangy  expression  in  the  class- 
room; by  accepting  any  kind  of  slovenly  English  in  quizzes, 
examinations,  etc. ;  by  failing  to  call  attention  to  inaccuracies 
and  also  by  failing  to  impress  upon  technical  students  the 
value  of  correct  and  clear  expression. 

Requirements  of  Engineering  Students 

At  the  University  of  Illinois  no  student  in  engineering  is 
permitted  to  enter  the  Junior  Class  until  he  has  completed 
the  requirements  in  rhetoric  for  the  first  two  years;  and  if, 
at  any  time  during  his  course,  he  shows  that  he  is  backward 
in  English  expression  he  may  be  required  to  take  extra  courses 
in  English.  A  Senior  who  presented  a  petition  in  which  many 
words  were  mis-spelled  was  very  much  peeved  when  he  was 
required  to  take  a  course  in  Freshman  spelling.  However,  I 
believe  that  the  requirement  was  good,  not  only  for  his  Eng- 
lish, but  as  a  disciplinary  measure  also. 

An  instructor  should,  I  believe,  make  a  list  of  common 
forms  of  inaccurate  expression  that  he  sees  in  quiz  and  exam- 


452  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

ination  papers,  and  qall  attention  to  them  in  the  class;  not 
giving  publicity  to  the  individuals  so  as  to  mortify  them,  but 
so  that  the  whole  class  may  benefit  by  such  criticism. 

A  requirement  of  a  theme  or  paper  upon  a  technical  subject 
connected  with  each  course  given  in  mining  is  one  method 
that  is  being  used  to  strengthen  English  training  at  Illinois. 

Sumarizing  these  hurried  suggestions: 

English  expression  should  be  looked  upon  as  a  fundamental 
for  an  engineer  and  he  should  be  impressed  with  this  at  a 
very  early  stage  in  his  course.  This  idea  should  be  empha- 
sized by  his  engineering  teachers  rather  than  by  members  of 
the  English  faculty. 

Teachers  of  technical  subjects  should  be  much  more  careful 
in  their  own  language  and  in  their  requirements  of  written 
and  spoken  English  from  their  classes. 

The  writer  hopes  that  these  few  suggestions  may  bring  out 
many  others  from  those  who  are  attempting  to  accomplish 
the  same  end. 


MATHEMATICS  IN    MINING  ENGINEERING  453 


THE  PLACE  OF  MATHEMATICS  IN  THE  TRAINING  OF  THE 
MINING  ENGINEER 

By  ROBERT  PEELE 

Professor  of  Mining,  School  of  Mines,  Columbia  University,  New  York  City 

o 

This  is  a  subject  regarding  which  there  must  be,  I  think, 
substantial  unanimity  of  opinion  amongst  practicing  engi- 
neers, as  well  as  teachers  in  schools  of  mines.  It  seems 
unnecessary  for  the  present  purpose  to  discuss  the  value  of 
mathematics  as  a  means  of  mental  training.  That  view  has 
general  acceptance.  Any  study  requiring  precision  in  the 
statement  of  problems,  and  which  furnishes  definite,  exact 
methods  for  their  solution,  is  obviously  useful  for  all  students, 
whatever  their  aim  in  life  may  be.  For  the  engineer  who 
deals  chiefly  with  matters  of  fact  and  who  must  subject  his 
professional  problems  to  rigid  analysis,  such  training  is  of 
especial  importance.  There  can  be  no  doubt  that  mathemati- 
cal studies  stimulate  the  reasoning  powers. 

Engineering  and  Mathematics 

Mathematics,  from  arithmetic  to  calculus,  is  the  founda- 
tion of  a  large  number  of  subjects  comprised  in  the  course  of 
study  leading  to  all  the  engineering  professions,  including 
that  of  mining.  It  is  the  tool  of  the  engineer.  Without  a 
sound  working  knowledge  of  the  different  branches  of  mathe- 
matics, few  of  the  elementary  and  introductory  engineering 
subjects  can  be  efficiently  and  successfully  studied. 

Take,  for  example,  the  numerous  applications  of  steam 
power,  or  the  electric  transmission  of  power  for  mine  service. 
Although  a  mining  engineer  is  not  expected  to  be  able  to 
design  a  steam  engine  or  an  electric  motor,  it  is  highly  desir- 
able, if  not  essential,  that  he  should  be  acquainted  with  the 
types  of  engines  and  motors  suitable  for  different  pur- 
poses, and  with  the  basic  features  of  their  construction  and 
operation. 

On  the  purely  mechanical  side,  therefore,  he  must  have 
studied  the  elements  of  mechanical  and  electrical  engineering. 


454  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

To  comprehend  these  matters,  he  must  be  familiar  with  the 
phraseology  and  terms  used  in  discussing  the  elements  of 
machine  construction.  The  successful  study  of  these  subjects 
depends  directly  upon  a  working  knowledge  of  mechanics  on 
the  one  hand,  and  descriptive  geometry  on  the  other.  Effec- 
tive study  of  mechanics  is  impossible  without  a  sound  train- 
ing in  mathematics.  In  accordance  with  the  principles  oJ 
descriptive  geometry,  a  given  subject  is  portrayed  by  me- 
chanical drawings.  To  show  the  object  fully  and  precisely, 
the  drawings  are  not  made  in  perspective,  but  in  two,  three 
or  more  orthographic  projections,  together  with  separate 
views  of  each  part  or  detail,  also  in  several  projections.  To 
make  mechanical  drawings,  or  to  read  them  with  facility,  the 
engineer  must  have  knowledge  of  geometry  and  trigonometry. 

Next,  in  discussing  the  action  of  steam  in  the  operation  of 
a  steam  engine,  or  the  theory  and  practice  of  air  compressors, 
or  of  internal  combustion  engines,  acquaintance  with  the 
principles  of  thermo-dynamics  is  necessary;  a  study  of  which 
requires  the  use  of  algebra  and  analytical  geometry,  and  at 
least  an  elementary  knowledge  of  the  differential  calculus. 
The  study  of  thermo-dynamics  is  largely  based,  also,  on 
physics,  in  which  mathematics  play  an  important  part. 

In  the  study  of  electrical  plant,  mathematical  relations  are 
met  at  every  turn,  demanding  the  use  of  algebra,  trigo- 
nometry and  analytical  geometry.  This  is  particularly  true 
of  alternating  current  machinery  now  so  important  in  con- 
nection with  the  power  plants  of  mines  and  metallurgical 
works,  and  the  transmission  and  distribution  of  electric  cur- 
rent. While  no  mining  engineer  would  be  expected  to  design 
or  build  generators  and  motors,  some  acquaintance  with  their 
principles  is  desirable. 

The  problems  of  surveying,  both  surface  and  underground, 
demand  familiarity  with  algebra,  geometry  and  trigonometry. 
The  theory  of  centrifugal  fans  and  pumps  involves  the  use 
of  all  branches  of  mathematics,  including  the  calculus.  The 
design  of  framed  structures  is  based  on  the  principles  of 
mechanics,  graphic  statics,  and  the  rules  and  formulas  of 
properties  of  materials  (often  called  resistance  of  materials), 
all  of  which  subjects  have  a  distinctly  mathematical  basis. 


MATHEMATICS  IN    MINING   ENGINEERING  455 

It  is  unnecessary  to  go  further  in  tracing  the  intimate 
dependence  of  engineering  studies  upon  mathematics.  Doubt- 
less some  practicing  mining  engineers  will  feel,  even  if  they 
do  not  say,  that  they  have  attained  success  in  their  profes- 
sional careers  without  possessing  a  working  knowledge  of 
any  more  mathematics  than  is  included  in  say,  arithmetic, 
algebra  and  plane  trigonometry. 

Mathematics  Fundamental  in  Engineering 

Others  who  have  been  engaged  more  in  the  business  man- 
agement of  mines  than  on  the  technical  side  of  the  profession, 
may  question  the  necessity  of  knowing  any  mathematics  be- 
yond arithmetic  and  elementary  algebra.  But  even  these  will 
acknowledge  that  engineering  problems  must  be  tackled  and 
solved  by  someone,  and  the  superintendent  or  manager  who 
has  insufficient  engineering  training,  or  whose  mathematics 
have  grown  rusty,  is  obliged  to  engage  the  services  of  a  tech- 
nically trained  man  to  help  him  out ;  or,  if  the  organization  is 
a  large  one,  the  superintendent  may  have  to  rely  implicitly 
on  his  engineering  staff  for  everything  connected  with  the 
technical  operation  Of  the  property.  Furthermore,  men  who 
adopt  such  a  viewpoint  are  likely  to  have  lost  sight  of  the 
beneficial  training  they  received  from  their  mathematical 
studies.  The  quickness  of  perception  and  mental  acuteness 
developed  by  these  studies  may  remain  long  after  the  details 
of  rule  and  formula  have  been  forgotten.  It  has  been  well 
said  that  the  engineer  should  be  accurate  in  his  calculations, 
thorough  in  his  investigations,  lucid  and  concise  in  his  state- 
ments, and  logical  in  his  deductions.  All  of  these  qualities  are 
fostered  and  developed  by  the  study  of  mathematics. 

The  fundamentals  of  mining  engineering  are  mathematics, 
chemistry,  physics,  mechanics,  mineralogy  and  geology,  and 
the  greatest  of  these  is  mathematics.  A  broad  view  of  the 
matter  forces  the  conclusion  that  the  study  of  mathematics  is 
not  only  useful  in  itself,  but  is  the  indispensable  basis  of  all 
scientific  engineering  as  distinguished  from  the  methods  of 
the  rule-of -thumb  practitioner. 


456  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 


FEDERAL  CO-OPERATION 

By   DAVID   WHITE 
Chief  Geologist,  United  States  Geological  Survey,  Washington,  D.  C. 

Experience  covering  many  years  has  shown  that  in  geo- 
logical, as  well  as  in  other  enterprises,  co-operation  is,  in 
general,  the  most  practicable  way  to  make  two  blades  of  grass 
grow  where  but  one  grew  before.  True  co-operation  doubles 
the  product  without  duplicating  the  effort.  It  assures  increase 
in  quality  or  quantity  of  output  or  both.  Ethically  and  mate- 
rially it  is  beneficial  to  all  concerned. 

Co-operation    Between    the    Federal    Government    and    Mining 
Industry 

Genuine  and  effective  co-operation  such  as  should  exist 
between  the  Government  and  the  mining  industry  in  the  for- 
mulation of  legislation  relating  to  the  development,  operation, 
and  taxation  of  mineral  lands  and  property  will  have  been 
discussed  in  a  special  session  of  this  conference.  What  seems 
to  be  needed  in  the  field  of  mining  legislation  is  co-operation — 
not  antagonism.  Better  teamwork  between  mine  owner  and 
Government  would,  no  doubt,  result  in  fuller  mutual  under- 
standing, more  widespread  sympathy,  less  suspicion  and  bet- 
ter laws  effecting  mining. 

Between  the  scientific  branches  of  the  Federal  Government, 
the  State  bureaus  and  the  mine  operators  of  the  United  States, 
the  earnest  purpose  to  further  the  mineral  development  of  the 
country  is  mutual.  In  the  discovery,  development,  mining, 
recovery,  utilization  and  marketing  of  the  mineral  resources 
in  the  ground,  co-operation  is  in  force  with  a  widespread  spirit 
of  earnest  helpfulness.  It  is  hoped  that  this  discussion  may 
lead  to  its  extension  with  still  greater  benefits,  both  for  the 
mining  industry  and  the  public. 

The  United  States  Geological  Survey  comes  into  closest  con- 
tact with  mining  interests  of  every  kind  through  its  work  of 
compiling  and  publishing  reports  of  mineral  production.  This 
work  with  which  all  State  bureaus  and  members  of  the  Mining 
Congress  are  familiar  is  purely  and  pre-eminently  a  co-opera- 


FEDERAL  CO-OPERATION  457 

tive  enterprise  in  which  most  of  you,  both  State  officials  and 
producers,  take  parts  that  are  both  active  and  essential.  These 
reports,  though  necessary  to  the  public,  are  mainly  for  the 
producers,  and  on  them  depend  the  accuracy,  the  promptness, 
and  to  some  extent,  the  adequacy  and  the  value  of  the  periodic 
statements  issued  by  the  Survey. 

The  branches  of  the  Survey  at  Denver,  Salt  Lake  City,  San 
Francisco,  and  in  Alaska  are  maintained  for  closer  work  with 
the  industry.  They  also  serve  as  points  of  conference  as  well 
as  local  sources  from  which  publications  and  other  inf ormation 
may  be  obtained.  They  are  in  charge  of  highly-trained  and 
experienced  men  known  to  all  and  enjoying  the  complete  con- 
fidence of  the  mining  men  of  the  West. 

Publications  of  the  Geological  Survey 

To  meet  the  needs  of  the  country  in  war,  the  work  of 
compiling  and  publishing  reports  of  mineral  production  was 
greatly  enlarged.  Quarterly  and  monthly  reports  were  pre- 
pared to  cover  the  principal  war  minerals,  and  even  weekly 
reports  on  a  few  metals;  the  status  of  our  oil  supplies  was 
reported  monthly,  and  the  situation  as  to  coal  was  published 
weekly.  At  the  same  time  the  statements  were  made  more 
comprehensive  and  more  fully  suited  to  the  requirements  of 
the  mining  industries.  Later,  the  anticipation  that  the  emer- 
gencies of  the  period  of  domestic  readjustment  and  of  the  com- 
petitive struggles  of  world  commerce  following  the  war  would 
require  the  continuance  of  this  work,  so  far  as  it  affected  our 
supplies  of  coal  and  oil,  has  been  more  than  realized.  It  has 
been  necessary  to  add  monthly  reports  of  stocks  of  domestic 
and  imported  oil  on  hand,  to  differentiate  more  fully  and 
clearly  the  distribution  of  oil;  and  to  account  for  the  move- 
ments, stocks,  and  market  conditions  of  coal,  as  well  as  for  the 
amount  mined  and  the  industrial  conditions  affecting  its  pro- 
duction. In  this  larger  undertaking  the  Survey  has  enjoyed 
the  good-will  of  other  governmental  agencies,  and  of  mining 
organizations,  particularly  of  the  war  bureaus  and  commis- 
sions which  have  rendered  great  assistance  in  the  initiation  as 
well  as  in  the  accomplishment  of  the  task. 

It  is  much  to  be  regretted  that  the  post-war  dissolution  of 
some  of  the  more  effective  among  the  latter  has,  especially  in 
the  case  of  coal,  deprived  the  Survey  of  substantial,  material 


458  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

assistance,  as  well  as  of  unfailing  and  generous  counsel,  and 
forced  it  to  stretch  to  the  limit  an  appropriation  kept  far  too 
slender  for  the  sake  of  Federal  economy.  The  Division  of 
Mineral  Resources,  under  the  immediate  direction  of  Mr.  G.  F. 
Loughlin,  is  in  the  hands  of  experienced  specialists,  is  well 
organized,  and  is  as  effective  as  the  sources  available  for  the 
work  permit.  We  need  $75,000  more,  and  the  increased  public 
investment  in  this  work  surely  will  not  fail  to  bring  large 
returns.  That  a  service  so  important  to  the  country  as  the 
current  reporting  of  our  mineral  production  and  supplies 
should  be  too  restricted  by  lack  of  funds,  is,  to  say  the  least, 
lamentable. 

Frequency  of  Reports 

The  experiences  of  the  war  have  taught  us  much  for  the 
improvement  of  our  mineral  resources  reports ;  but  these  re- 
ports should  be  made  still  more  valuable  to  the  industry  and  to 
the  public;  and,  since  for  the  basic  data  we  are  indebted  to 
the  mining  men,  and  the  reports  are  primarily  for  them,  it  is 
more  than  proper  that  both  the  members  of  this  Congress  and 
the  State  bureaus  should  offer  suggestions  and  recommenda- 
tions conducive  to  the  improvement  of  these  reports.  Surely 
they  will  be  welcomed  in  the  best  spirit.  Presumably  your 
recommendations  will  relate  mainly  to  the  form,  scope,  basic 
data  and  frequency  of  issue  of  the  reports,  or  to  the  classifica- 
tion and  interpretation  of  the  production  statistics.  It  is 
anticipated  that  suggestions  as  to  frequency  and  promptness 
of  reporting  will  be  most  numerous.  The  great  value  of 
more  frequent  reports  of  current  production  of  certain  mineral 
commodities  has  been  conclusively  shown  during  the  last  two 
years.  But  for  the  weekly  reports  on  coal  the  country  must 
have  witnessed  disastrous  emergencies  in  the  industries,  in 
transportation  and  in  the  home.  It  now  seems  not  unlikely 
that  the  prospective  uncertainties  of  the  future  will  demand 
further  elaboration  of  the  reports  of  the  production  and  stocks 
of  petroleum.  Accordingly,  it  seems  likely  that  recommenda- 
tions will  be  offered  regarding  the  monthly  oil  statements, 
and  especially  as  to  the  classification  of  the  data,  and  greater 
promptness,  if  not  frequency,  in  reporting.  In  this  connection, 
attention  may  be  directed  to  the  more  complete  and  clearer 


FEDERAL  CO-OPERATION  459 

differentiation  of  stocks  and  net  imports  as  set  forth  in  the 
statement  for  September,  1920. 

In  this  matter,  which  I  regard  as  urgent,  efficiency  and  co- 
operation are  notably  indispensable.  The  oil  man  probably 
does  not  need  to  be  reminded  that  not  only  the  frequency,  but 
in  particular,  greater  promptness  in  issuing  the  monthly  state- 
ments of  petroleum  production  depend  not  merely  collectively, 
but  individually,  on  the  producer.  They  cannot  be  speeded  up 
without  his  help  in  more  punctually  reporting  the  company's 
oil  production  and  stocks.  However,  it  is  but  fair  to  say  that 
a  comparatively  small  number  of  producers  cause  the  principal 
delay.  The  published  report  takes  the  date  of  the  last  received 
return. 

In  this  connection  it  may  not  be  out  of  place  to  suggest  that 
in  certain  cases,  where  the  company  records  so  differ  from  the 
forms  used  by  most  other  companies  and  in  the  Government 
reports,  as  to  require  special  compilation  of  the  essential  cri- 
teria in  the  offices  of  the  companies  in  order  to  fill  out  the 
questionnaires,  consideration  be  given  by  the  company  either 
to  conform  to  the  prevailing  usage  or  to  the  adoption  by  the 
oil  companies  in  general  of  a  standard  form  of  record  for 
office  use,  as  well  as  for  use  in  reporting  to  the  Government. 

Scope  of  the  Survey 

The  province  of  a  Geological  Survey  covers  every  field  of 
geological  investigation  and  thought.  It  embraces  the  form, 
structure,  composition,  properties,  origin  and  history  of  the 
earth  and  its  component  parts,  and  it  includes  the  qualitative 
and  quantitative  distribution  and  mutual  relations  as  well  as 
the  genesis  of  these  parts. 

The  scope  of  the  Federal  Survey  co-operation  through  the 
topographic,  the  water  resources,  and  the  geologic  branches 
with  the  States,  with  other  departments  and  bureaus,  and  with 
scientific  institutions  and  universities  you  will  find  outlined 
somewhat  fully  in  the  annual  report  of  the  Director  of  the 
Survey,  reports  that,  except  as  certain  parts  of  general  public 
interest  are  re-published  by  some  journalist,  are  probably  as 
unfamiliar  to  most  of  you  as  is  the  annual  report  of  St.  Eliza- 
beth's Insane  Asylum  at  Washington,  which  also  is  adminis- 
tered through  the  Interior  Department. 

The  mapping  of  the  lands,  the  surveys  of  our  water  re- 


460  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

sources  and  water  powers,  and  the  geological  investigations 
by  the  Survey  all  affect  the  interests  of  the  mining  man. 

In  its  quantitative  and  qualitative  studies  of  the  water  sup- 
plies, both  surface  and  underground,  the  work  of  the  Water 
Resources  branch  of  the  Survey  reaches  from  the  undeveloped 
power-site  to  the  ranch-house  and  the  city  home.  This  branch 
is  endeavoring  to  secure  more  and  cheaper  power  for  the  miner 
while  assisting  in  promoting  the  health  of  many  of  his  com- 
munities through  developing  better  water  supplies. 

Results  From  the  Survey's  Work 

During  the  25  years  of  activity  of  this  branch,  stand- 
ard methods  have  been  developed  which  have  been  adopted 
throughout  the  world  wherever  systematic  stream  gauging  has 
been  accomplished.  A  force  of  about  80  engineers  is  employed 
in  the  field  work  and  in  preparing  the  results  for  publication 
in  the  series  of  water-supply  papers.  The  results  are  accepted 
as  standard  by  engineers,  financiers  and  courts,  and  on  them 
as  a  basis  developments  in  water  power,  irrigation  and  other 
hydraulic  uses  have  been  made. 

States  and  other  governmental  agencies  are  attracted  to 
co-operation  with  the  Geological  Survey  in  order  to  obtain  the 
advantages  of  its  trained  organization,  of  the  standing  thus 
obtained  for  the  results  of  the  work,  and  of  the  publication  of 
the  data  in  Government  reports.  Wherever  the  co-operative 
funds  are  sufficient,  a  district  office  in  charge  of  a  district 
engineer  and  corps  of  assistants  is  established  and  maintained 
in  a  co-operating  State,  thereby  securing  close  contact  with 
and  supervision  of  the  work,  the  opportunity  for  frequent 
exchange  of  ideas  with  co-operating  State  officials  and  result- 
ing cordial  relations. 

Federal  and  State  Co-operation 

As  the  Federal  law  appropriating  funds  permits  co-opera- 
tion with  other  Government  agencies,  it  is  only  necessary  that 
the  State  appropriations  permit  co-operation  with  the  U.  S. 
Geological  Survey,  and  that  the  State  funds  be  not  restricted 
to  payment  of  statutory  salaries.  The  State  funds  are  dis- 
bursed in  accordance  with  State  regulations  and  by  State 
officials.  Under  such  conditions,  if  the  responsible  State 
official  is  favorably  inclined,  co-operation  can  generally  be 


FEDERAL  CO-OPERATION  461 

arranged.  It  may  be  provided  for  by  formal  contract,  or 
informally,  by  exchange  of  letters  setting  forth  the  conditions 
of  the  co-operation. 

Complete  control  of  the  technical  phases  of  the  work  of 
surveys  by  the  Water  Resources  Branch,  and  of  the  personnel 
employed  therein  is  retained  by  the  Federal  organization,  even 
though  part  or  all  of  the  salaries  may  be  paid  from  State 
funds.  Stream-flow  records  are  collected  at  stations  mutually 
agreed  upon.  Records  are  always  open  to  and  available  for 
the  use  of  State  officials. 

The  need  of  stream-gauging  work  has  been  so  great  that 
more  co-operation  has  been  offered  than  could  be  undertaken 
by  the  Geological  Survey.  Fortunately,  many  States  do  not 
require  co-operation  on  a  dollar-for-dollar  basis,  and  the  State 
officials  have  thus  been  able  to  allot  larger  amounts  of  money 
than  could  be  offered  by  the  Survey.  The  few  States  that  still 
retain  dollar-for-dollar  legal  requirement  have  been  at  a  dis- 
advantage because  of  the  inability  of  the  Survey  to  meet  the 
full  amount  of  State  funds.  Out  of  32  States  which  co-oper- 
ated in  stream-gauging  during  the  last  fiscal  year,  only  3  are 
restricted  to  equal  allotments  of  State  and  Federal  funds.  The 
total  State  funds  made  available  for  co-operation  in  stream- 
gauging  during  about  16  years  have  been  $1,500,000.  The 
annual  co-operation  has  increased  gradually  during  the  last  10 
years,  from  $50,000  in  1911,  contributed  by  13  States,  to  a 
maximum  of  $175,000  in  1920,  contributed  by  32  States,  with 
an  average  of  22  States  contributing  annually  during  the  10- 
year  period. 

The  topographic  mapping  of  the  country  is  proceeding  with 
efficiency  and  economy  of  administration,  and  in  accordance 
with  standards  constantly  raised  to  keep  pace  with  the  advance 
in  public  requirements. 

The  total  area  of  the  United  States  covered  by  topographic 
maps  on  July  1,  1920,  was  1,301,136  square  miles,  or  42.9  per 
cent,  of  the  entire  area.  Approximately  15  per  cent,  of  the 
area  mapped  is  in  need  of  re-survey  to  bring  it  up  to  the 
present  standard  of  accuracy. 

Cost  of  Topographic  Surveys 

Since  the  establishing  of  the  U.  S.  Geological  Survey  in  1879, 
Congress  has  appropriated,  in  round  numbers,  $12,655,000 


462  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

($12,654,988.98)  for  topographic  surveys  to  be  expended  by 
the  U.  S.  Geological  Survey  for  the  following  special  purposes : 

Topographic  surveys,  U.  S.  G.  S $9,125,769 

Survey  National  Forest 2,234,219 

Military  Surveys,  War  Department , 1,295,000 

Total $12,654,988 

The  various  States  have  co-operated  with  the  U.  S.  Geo- 
logical Survey  during  the  last  35  years  by  allotting  the  total 
sum  of  $2,870,820.07  for  topographic  surveys,  making  a  grand 
total  of  $15,525,809.05  expended  for  topographic  surveys  in 
the  United  States  to  date,  or  approximately  $12  per  square 
mile  mapped.  During  the  present  year,  1920-'21,  co-operation 
is  being  maintained  in  21  States  and  one  territory,  $228,300 
being  allotted  by  these  States  for  topographic  surveys.  It  is 
estimated  that  the  topographic  mapping  of  the  United  States 
can  be  completed  on  a  scale  of  1 : 62,500  in  about  13  years  at 
approximately  a  cost  of  $50,000,000. 

The  conference  of  the  representatives  of  the  Federal  map- 
making  organizations,  convened  by  the  President  in  August, 
1919,  recommended  that  the  U.  S.  Geological  Survey  prepare 
the  standard  topographic  map  of  the  United  States. 

As  a  result  of  that  conference  a  Board  of  Surveys  and  Maps 
was  appointed  by  Executive  order  on  December  30,  1919,  in 
order  to  co-ordinate  the  activities  of  the  various  map-making 
agencies  of  the  Executive  Departments. 

This  Board  is  proceeding  in  its  work  with  the  general  plan 
under  which  the  Coast  and  Geodetic  Survey  will  execute  the 
primary  control  work,  and  the  Geological  Survey  will  execute 
the  secondary  control  and  topographic  mapping  for  all  of  the 
Government  departments,  looking  forward  to  covering  the 
entire  area  of  the  United  States  with  standard  topographic 
maps. 

Under  this  plan  the  States  must  assist  by  sharing  in  the 
expense.  So  long  as  the  Federal  appropriations  are  limited  to 
small  amounts,  it  is  only  good  business  to  expend  the  Federal 
appropriation  where  it  can  be  met  by  State  funds.  The  usual 
procedure  is  co-operation  on  the  half-and-half  basis. 

It  is,  therefore,  evident  that  in  the  next  few  years  very  little 
topographic  work  will  be  done  by  the  Federal  Government  in 
States  which  do  not  co-operate. 


FEDERAL  CO-OPERATION  463 

During  the  present  year  $228,000  has  been  allotted  by  22 
States.  Congress  will  be  asked  to  appropriate  $600,000  for 
the  next  fiscal  year,  and  the  Survey  would  like  to  have  the  State 
allotments  increased  to  at  least  $400,000. 

The  Survey  will  be  glad  to  accept  new  co-operation  or  in- 
crease in  old  co-operation  in  amounts  ranging  from  $5000  to 
$50,000  per  annum,  contingent,  of  course,  on  Congress  making 
Federal  appropriations  sufficiently  large  to  meet  the  State 
allotments.  In  case  the  total  State  allotments  exceed  the  Fed- 
eral funds  available  to  meet  them,  the  Federal  funds  will  be 
pro-rated  on  an  equitable  basis  between  the  co-operating 
States. 

Mapping  the  Country 

Co-operation  with  various  map-making  agencies  of  the  Gov- 
ernment and  the  public  has  been  greatly  facilitated  by  the 
establishment  of  the  "Board  of  Surveys  and  Maps/*  and  the 
U.  S.  Geological  Survey  is  actively  co-operating  with  the  En- 
gineer Corps  and  Air  Service  of  the  U.  S.  Army,  the  Soil 
Survey,  Bureau  of  Public  Roads,  Reclamation  Service,  Na- 
tional Parks,  Forest  Service,  and  there  is  also  proposed  co- 
operation with  the  River  and  Harbor  Commission  in  surveying 
the  Tennessee  River  basin  in  connection  with  the  improvement 
of  navigating  on  the  Tennessee  River. 

It  is,  on  some  accounts,  to  be  regretted  that  the  organic  law 
of  the  Survey  does  not  sanction  direct  co-operation  with 
private  corporations  and  individuals  as  it  does  with  strictly 
public  institutions  and  organizations. 

Of  the  strictly  geological  activities  of  the  Geological  Survey, 
those  probably  of  most  interest  to  mining  men  are  the  studies 
of  the  regional  geology,  the  structure  and  mineral  deposits,  and 
of  the  ore  genesis  of  the  various  mining  districts.  The  work 
of  the  Survey  in  the  study  of  the  geology  of  metalliferous 
regions  will  have  been  specially  discussed  by  F.  L.  Ransome. 
[This  will  be  found  on  page  407  of  the  Proceedings.] 

In  these  studies,  several  of  which  are  conducted  in  co-opera- 
'  tion  with  the  States,  the  Survey  enjoys  the  fullest  co-operation 
of  the  mining  companies,  and  it  is  a  pleasure  to  take  advantage 
of  this  opportunity  for  a  public  expression  of  its  deep  appre- 
ciation. The  Survey  is  also  under  special  obligation  to  the 
State  Geologists  and  to  the  University  economic  geologists  for 


464  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

unflagging  and  unselfish  assistance  in  the  qualitative  and 
quantitative  census,  made  during  the  war,  of  the  resources  of 
the  country  in  certain  war  minerals. 

Value  of  Geologic  Investigation 

It  is  probable  that  geology  now  is  and  will  for  some  years  to 
come  be  of  more  value  to  the  fuel  and  particularly  to  the  oil 
miners  than  to  the  miners  of  metals  or  salts.  This,  naturally, 
is  due  to  the  relative  youth  of  the  oil  industry  and,  conse- 
quently, to  the  relatively  small  progress  made  in  the  solution 
of  the  geological  problems  of  the  origin,  conditions  of  migra- 
tion and  accumulation,  and  of  the  mutual  relations  and  the 
distribution  of  oil,  gas  and  water.  The  tremendous  value  of 
the  competent  and  experienced  oil  geologists  to  the  oil  com- 
pany, to  which  most  of  the  oil  companies  were  for  many  years 
stupidly  blind,  is  now  generally  recognized.  In  fact,  we  must 
now  take  some  care  that  we  are  not  over-estimated.  Against 
this,  however,  stands  the  fact  that  geology  will  later  be  of  still 
more  basic  importance  to  the  oil  producer. 

In  common  with  the  State  surveys,  and  in  co-operation  with 
most  of  them,  the  Federal  Survey  is  giving  much  attention  to 
the  problems  of  the  discovery  and  development  of  new  oil  sup- 
plies. The  methods  of  structural  study  and  mapping  in  the 
field  developed  by  the  Survey  are  now  adopted  by  all  American 
and  the  leading  foreign  oil  companies.  This  is  a  compliment 
coupled  with  a  curse ;  for,  appraising  the  training  and  experi- 
ence as  well  as  the  method,  the  oil  companies  have  robbed  the 
Survey  of  a  considerable  part  of  its  oil  and  gas  staff  to  take 
charge  of  their  searches  for  new  oil  fields  and  the  more  eco- 
nomical definition  of  those  already  discovered. 

The  task  of  defining  the  probably  productive  areas  of  pro- 
ducing anticlines  or  domes  in  the  public  lands  imposed  on  the 
U.  S.  Geological  Survey  by  the  Leasing  Law  recently  passed 
by  Congress,  could  hardly  be  accomplished  with  its  sadly  de- 
pleted staff  of  oil  geologists  were  it  not  for  the  most  hearty 
co-operative  assistance  universally  extended  by  the  oil  com- 
panies and  their  geologists.  The  same  generous  response  and 
help  are  met  in  the  Survey  examinations  of  the  stratigraphy 
and  structure  of  other  regions  in  the  effort  to  bring  to  light 
new  oil  reserves. 

A  new  field  for  mutual  co-operation  and  the  avoidance  of 


FEDERAL  CO-OPERATION  465 

duplication  between  Federal  and  State  Surveys  is  seen  in  the 
progressive  adoption  of  blue-sky  laws  by  one  State  after 
another. 

Co-operation  of  Oil  Companies 

It  is  germane  to  note  with  intense  satisfaction  the  growing 
tendency  on  the  part  of  many  of  the  oil  companies  really  to 
co-operate  with  one  another.  This  spirit  which  has  been 
manifested  for  some  years  through  joint  co-operation  with  the 
different  geological  surveys  and  the  bureaus  of  mines,  is  now 
demonstrated  through  joint  wildcatting  by  several  companies 
in  new  regions,  in  boring  to  deeper  sands,  and  in  water  pre- 
vention, road  building,  etc.  Such  enterprises  will  become  more 
common  when,  as  the  oil  deposits  of  the  country  are  more  f  ully 
discovered  and  exhausted,  the  hazards  of  wildcatting  are  con- 
sequently greater,  and  the  necessities  for  economies  and  a 
more  complete  recovery  of  the  oil  in  the  ground  are  more 
apparent.  At  the  same  time  closer  teamwork  will  surely  be 
found  between  Federal  and  State  bureaus  and  the  drillers  in 
the  search  for  and  development  of  new  reserves,  and  in  guar- 
anteeing the  future  of  our  country  so  far  as  concerns  its  oil 
necessities.  Meanwhile,  it  is  to  be  hoped,  for  the  good  of  the 
public  as  well  as  for  their  own  good,  that  more  oil  companies 
may  be  led  either  by  Heaven's  grace  or  by  the  law  to  co-oper- 
ate in  the  prevention  of  the  wasteful  crowding  of  wells. 

Both  economy  and  efficiency  in  the  discovery  and  in  the 
development  of  new  oil  reserves  would,  in  large  measure, 
result  from  the  pooling  without  restriction  by  the  oil  com- 
panies of  all  information  relating  to  the  results  of  drilling> 
especially  wildcat  drilling.  This  joint  information  should 
include  logs  of  the  strata  in  the  greatest  detail  possible,  with 
authentic  records  as  to  complete  results  respecting  water,  oil 
and  gas,  and  their  detailed  relations  to  pay  streaks.  Such 
data  should  be  mutually  available  to  all  companies  and  logi- 
cally and  most  practicably,  should  be  deposited  with  the  State 
bureaus  or  with  the  Government.  The  information  tempo- 
rarily held  in  confidence  should  be  reduced  to  a  minimum  and 
released  as  soon  as  possible.  No  phases  of  any  European  spy 
system  have  ever  been  more  burlesque  and  ridiculous  than  is 
the  spy  system  maintained  by  many  of  our  leading  oil  com- 


466  PROCEEDINGS   OF   AMERICAN   MINING  CONGRESS 

panies.     Is  not  the  system  essentially  wasteful  and  nearly 
outlived  ? 

Study  of  Fossils  from  Oil-Weils 

Many  oil  operators  do  not  know  that  the  Geological  Survey, 
in  connection  with  its  assembling  of  logs  of  wildcat  wells,  co- 
operates freely  with  the  drillers  through  the  examination  of 
fossils  collected  and  the  paleontological  determination  and 
correlation,  so  far  as  possible,  by  the  Survey  paleontologists 
of  the  fossiliferous  horizons  penetrated  by  the  drill.  These 
correlations  are  promptly  communicated  to  the  driller,  but  the 
public  auspices  of  the  service  do  not  permit  making  the  infor- 
mation confidential  or  exclusive.  A  more  widespread  utiliza- 
tion of  this  service  which  is  extended  to  petrologic  examina- 
tions of  drill  cuttings,  would  be  of  great  benefit  to  the  industry. 
In  view  of  the  very  limited  number  of  specialists  in  the  dif- 
ferent fields  of  paleontology  and  the  sporadic  distribution  of 
these  among  the  surveys  and  colleges,  the  value  of  a  system- 
atic organization  of  this  work  on  a  co-operative  basis  is  evi- 
dent and  deserves  early  attention. 

Other  lines  of  investigation  now  in  progress  in  the  Survey 
that  relate  directly  to  the  problems  of  the  oil  operator  include : 
(1)  observations  of  the  temperature  gradient  in  deep  wells 
bored  in  different  parts  of  the  country,  these  observations 
bearing  upon  the  depth  at  which  oil  will  volatilize  in  different 
regions,  and  upon  the  relative  recency  of  diastrophic  move- 
ment or  vulcanism  in  different  regions;  (2)  gravity  measure- 
ments conducted  through  the  co-operation  of  the  U.  S.  Coast 
and  Geodetic  Survey,  with  the  object  of  developing  criteria 
from  which  deductions  may  be  made  as  to  the  depths  of  the 
unaltered  sediments  in  different  regions,  as  to  local  buried 
folds  in  which  denser  rocks  are  brought  nearer  the  surface, 
and  possibly,  by  which  the  presence  or  absence,  at  a  given 
point,  of  buried  salt  plugs  of  large  size  may  be  predicted  with 
a  helpful  degree  of  probability;  (3)  studies  of  oil  sands  with 
reference  to  the  texture,  mineralization,  size  and  shape  of 
grains  and  pore  spaces,  as  bearing  upon  the  sterility  or  tight- 
ness of  the  sand  and  the  productivity  and  the  life  of  the  wall 
and  pool;  (4)  studies  of  the  petrology  and  micro-paleontology 
of  the  stratigraphic  sections  in  certain  of  the  oil  regions,  with 
the  object  of  providing  the  company  geologist  and  the  driller 


FEDERAL  CO-OPERATION  467 

with  data  by  which  the  beds  encountered  by  the  drill  in  those 
regions  may  be  recognized  and  correlated  with  certainty  and 
relative  ease.  The  latter  Held,  in  which  excellent  work  has 
already  been  done  by  the  Texas  Bureau  of  Economic  Geology 
and  Technology,  under  the  direction  of  Dr.  J.  A.  Udden,  a 
leader  in  this  line  of  study,  is  one  meriting  consideration  by 
bureaus  of  other  States.  Co-operation  in  this  line  would  prob- 
ably be  connected  with  the  studies  of  drill  cuttings  already 
mentioned. 

In  all  of  these  investigations  the  fullest  co-operation  is 
extended  by  the  engineers  and  geologists  in  the  field,  but  addi- 
tonal  increase  in  the  scope  and  progress  of  the  work  would,  in 
many  cases,  result  from  instructions  from  company  head- 
quarters to  the  driller,  or  the  authorization  of  little  added 
expense  for  the  purpose  of  supplying  the  materials  needed  in 
the  investigations. 

The  researches  regarding  the  cementation  of  oil  sands  by 
deposition  of  salts  through  evaporation  by  expanding  gases 
in  the  rock,  initiated  by  the  Survey,  again  with  assistance  in 
the  field  from  the  oil  companies,  have  been  taken  over  by  the 
U.  S.  Bureau  of  Mines  in  connection  with  its  investigations  of 
oil-well  production  and  conservation. 

Other  studies  offering  possibilities  of  great  value  to  the  oil 
industry,  but  in  which  it  does  not  appear  practicable  for  the 
companies  to  co-operate  at  the  present  moment,  embrace  geo- 
physical laboratory  experiments  as  to  the  dynamo-chemical 
origin  of  oil  from  the  fossil  mother  substances ;  also  the  micro- 
scopical and  micro-chemical  examination  of  oil-shales  of  dif- 
erent  formations  and  regions  with  reference  to  the  origin  and 
characteristics  of  these  fossil  residues  that  decompose  in  the 
process  of  distillation  at  different  temperatures,  yielding  oil 
distillates  of  different  characters.  The  examination  aims  at 
determining  the  correlation  between  the  type  of  fossil  residue 
and  the  type  of  distillate  obtained  at  a  given  distillation  tem- 
perature. These  studies,  which  are  a  part  of  the  investigations 
by  the  Survey  of  the  oil-shale  deposits  of  the  country,  can 
hardly  fail  to  be  helpful  not  only  as  explaining  the  qualities 
of  some  of  the  distillates  already  under  chemical  and  techno- 
logical investigation,  but  also  in  the  solution  of  some  of  the 


468  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

problems  of  retorting  the  shale  and  in  the  refining  and  suc- 
cessful utilization  of  oil  made  from  oil-shale. 

Mineral  Deposits  of  Foreign  Countries 

Another  line  of  Survey  activity  conducted  for  the  practical 
benefit  of  the  American  mining  man  is  the  information  service 
regarding  the  distribution,  geological  occurrence,  characteris- 
tics, qualities,  extent  and  developmental  conditions  of  economic 
mineral  deposits  in  foreign  countries.  This  service,  founded 
for  the  information  of  the  American  representatives  at  the 
Peace  Conference,  has  such  great  possibilities  of  helpfulness 
to  America  through  its  aid  to  the  mining  public  that  it  has 
been  made  as  complete  as  possible  with  the  available  resources. 
The  compiled  data  relating  to  oil  in  foreign  countries  have 
been  in  tremendous  demand  and  the  value  to  our  country 
accruing  from  this  service  in  petroleum  alone,  i.  e.,  the  conse- 
quent betterment  of  our  future  position  in  oil  has  more  than 
a  thousand  times  justified  the  total  cost  of  the  undertaking. 

Not  for  many  years  past  and  probably  not  for  a  century  to 
come,  will  the  opportunities  for  American  investment  in  for- 
eign mineral  deposits  or  for  acquiring  foreign  conces- 
sions, have  been  so  favorable  as  at  the  present  time. 
The  payment  of  crushing  war  debts,  the  re-building  of  in- 
dustries and  transportation,  the  re-creation  of  commerce,  the 
stabilization  and  even  the  survival  of  Governments;  in  fact, 
the  fundamental  requisites  of  food,  clothing  and  shelter,  if  not 
the  hope  of  existence  itself,  in  some  of  the  newly-established 
or  rehabilitated  countries,  demand  all  that  human  labor  can 
produce  in  these  countries.  All  that  can  be  won  from  the 
depths  of  the  earth  as  well  as  from  the  soil  must  be  thrown 
into  the  void.  All  resources  must  be  drawn  on  to  the  utmost. 

The  compelling  situation  is  recognized  by  the  Government 
in  most  countries,  if  not  by  the  laboring  classes,  and  it  is  fur- 
ther realized  that  it  is  absolutely  impossible  to  succeed  with- 
out foreign  capital.  Such  capital  is  besought  and  must  be  had, 
and,  accordingly,  concessions  of  the  greatest  value  are  to  be 
obtained  at  any  sacrifice. 

Opportunities  hardly  less  important  are  found  in  some  of 
the  semi-barbaric  regions  of  other  continents  now  opening  up 
for  civilization  and  development,  while  the  spirit  of  awaken- 


FEDERAL  GO-OPERATION  409 

ing  has  extended  to  the  South  American  countries  and  the 
Far  East. 

Opportunities  in  Mining 

In  common  with  other  capitalists  the  American  mining 
investor  how  faces  unprecedented  opportunities,  including 
those  for  the  acquisition  of  copper,  oil,  iron,  silver,  gold, 
platinum  and  other  mineral  properties.  Many  of  these  are 
far  richer  and  more  extended  than  those  now  in  American 
control.  Further,  these  are,  so  to  speak,  marked  down  in 
price,  corresponding  to  our  extraordinary,  though  temporary, 
advantage  in  trade  discounts.  Not  soon  again  will  such 
chances  be  opened  up  to  us,  and  no  capital  is  more  welcome 
than  ours  for  the  development  of  these  resources.  On  the 
other  hand,  the  almost  incredible  activity  of  the  nationals  of 
our  late  allies,  now  our  most  aggressive  competitors  in  the  new 
war  for  World  commerce  and  financial  dominion,  in  securing 
as  much  as  possible  of  the  best  of  the  very  rich  pickings,  not- 
withstanding their  stupendous  handicaps,  should  warn  Ameri- 
cans. We  must  beware  not  only  of  a  prospective  serious 
impairment  in  our  commercial  position,  but  also  of  the  danger 
to  our  country  of  the  loss  in  the  not  distant  future  of  world 
control  of  copper,  as  well  as  of  oil,  and  of  a  possible  loss  to  our 
present  commercial  position  in  iron  and  coal,  if  a  larger  par- 
ticipation in  the  control  and  development  of  some  of  the 
exceedingly  rich  deposits  now  available  and  destined  soon  to 
be  developed  in  other  parts  of  the  world  is  not  acquired  by 
American  mining  men. 

The  United  States  must  take  a  part  in  the  acquisition  and 
development  of  the  rich  mineral  deposits  of  copper,  oil,  silver, 
iron,  coal,  etc.,  now  being  opened  in  many  parts  of  the  world, 
if  the  mineral  products  can  be  produced  in  foreign  lands  and 
delivered  to  our  foreign  markets  more  cheaply  than  they  are 
produced  at  home ;  if  larger  profits  await  the  mineral  investor 
abroad;  if  our  trade  balance  is  to  be  sustained  in  growing 
national  wealth  and  exports ;  if  tariff  walls  and  growing  com- 
mercial isolation  are  not  to  replace  successful  world  competi- 
tion in  commerce,  and  if  our  merchant  marine  is  to  carry  our 
own  commodities  in  trade  rather  than  those  of  our  commercial 
rivals.  A  more  extended  use  by  metal  and  coal  mining  men 


470  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

of  the  information  available  in  the  U.  S.  Geological  Survey 
respecting  foreign  deposits,  is  much  to  be  desired,  and  cannot 
fail  to  be  of  benefit  to  the  investor,  to  the  world  trade  and 
prosperity  of  this  country,  and  to  the  country  in  which  the 
mineral  resources  may  lie. 


MINING  IN -WYOMING  471 


ACTIVITIES  OF  THE  WYOMING  GEOLOGICAL  SURVEY  AND 

ITS  RELATIONSHIP  TO  THE  GROWING  MINERAL 

INDUSTRIES 

By  G.  B.  MORGAN,  State  Geologist,  Cheyenne,  Wyo. 

In  Wyoming,  the  department  of  State  Geologist  has  always 
been  practically  a  one-man  affair,  there  being  no  provision 
for  deputies  or  technical  assistants.  However,  we  hope  the 
next  Legislature  will  enlarge  the  office  and  give  us  sufficient 
funds  to  carry  on  a  real  campaign  of  research.  It  is  also 
desirable  that  good,  workable  oil  and  gas  conservation  laws  be 
enacted  in  Wyoming  with  the  creation  of  the  office  of  Oil  and 
Gas  Supervisor  in  our  department,  and  we  are  working  toward 
this  end  at  the  present  time. 

Meanwhile,  the  activities  of  the  office  are  confined  to  gen- 
eral publicity  work;  examinations  and  reports  to  the  State 
Land  Board,  and  enforcement  of  the  oil  and  gas  laws,  such  as 
we  have.  The  general  publicity  work  consists  of  collecting 
and  distributing  information  on  oil  and  gas  fields  and  other 
mineral  deposits  of  the  State;  the  publication  of  geological 
bulletins  and  maps ;  and  advertising  the  mineral  wealth  of  the 
State  to  the  people  at  large.  It  is  needless  to  say  that  one  of 
the  most  important  features  of  publicity  work  is  answering 
inquiries  and  advising  prospective  operators  and  investors. 
For  the  greatest  good  of  the  State,  it  is  just  as  important  to 
advise  unfavorably  on  propositions  without  merit  as  it  is  to 
induce  capital  to  come  into  the  State  on  propositions  where 
the  prospects  are  favorable.  Worthless  schemes  in  which 
stock  has  been  sold  broadcast  are  bound  to  re-act  against  the 
best  interests  of  the  State  in  the  future  and  they  will  obtain 
no  support  from  this  office. 

Work  Accomplished  in  Wyoming 

No  regular  field  surveys  have  been  made  by  this  office  since 
1917.  Prior  to  that  time  the  office  had  published  8  mineral, 
14  oil  and  gas,  and  5  miscellaneous  bulletins.  Since  August  1, 
1919,  which  is  the  date  I  went  into  office,  we  have  published 
10  press  bulletins  on  the  new  oil  fields  and  miscellaneous  mat- 
ters, and  have  issued  two  editions  of  the  State  geological  map. 


472  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

The  work  for  the  State  Land  Board  is  of  a  confidential 
nature  and  embraces  the  following  functions : 

1.  Examinations  and  reports  on  the  geology  and  mineral 
character  of  State  lands,  both  developed  and  unde- 
veloped. 

2.  Examinations  and  reports  on  operations  of  various 
kinds  on  State  lands,  including  mining,  drilling  and 
prospecting. 

3.  Reports  on  the  production  of  oil,  gas  and  minerals 
from  the  various  State  leases  and  recommendations 
by  which  the  production  and  consequently  the  reve- 
nues of  the  State  may  be  increased. 

4.  The  power  to  act  in  a  consulting  capacity  to  the  State 
Land  Board  and  advise  it  in  all  matters  relating  to 
oil  and  minerals  when  called  upon. 

The  oil  fields  covered  in  these  reports  in  the  last  two  years 
include  Salt  Creek,  Grass  Creek,  Lance  Creek,  Big  Muddy, 
Rock  Creek  and  Elk  Basin.  In  addition,  reports  have  been 
made  on  prospective  oil  and  gas  lands,  coal,  potash  and  other 
mineral-bearing  lands. 

Although  the  State  land  work  does  not  at  present  occupy 
all  the  time  of  the  State  Geologist,  it  is  rapidly  becoming 
heavier  and  more  important.  The  State  has  immense  holdings 
in  the  oil,  gas  and  coal  fields  within  its  boundaries,  and  the 
royalties  from  them  amount  to  great  sums  annually  and  are 
becoming  larger  each  year.  To  protect  the  State's  interests 
in  the  various  fields  often  necessitates  exhaustive  investiga- 
tions and  requires  expert  knowledge  of  the  technology  of 
petroleum  production  as  well  as  of  mining  and  geology. 
Within  the  next  few  years  this  work  will  probably  require 
the  entire  attention  of  one  man,  especially  if  conservation  laws 
are  passed. 

Enforcement  of  the  oil  and  gas  laws  of  the  State  is  only  a 
small  part  of  the  duties  of  the  office.  The  only  conservation 
laws  now  on  the  statute  books  are  the  ones  prohibiting  the 
waste  of  natural  gas  and  oil  at  the  wells,  and  requiring  aban- 
doned wells  to  be  plugged.  These  laws  are  sufficient  for  a 
State  in  the  beginning  of  the  development  of  its  oil  and  gas 
fields,  but  do  not  at  all  meet  the  conditions  now  existing  in 
Wyoming. 

The  conservation  of  petroleum,  both  in  the  fields  and  in  the 


MINING  IN  WYOMING  473 

various  processes  of  production  and  refining,  and  the  greatest 
ultimate  production  of  the  oil  from  the  sands  are  the  two  most 
serious  problems  facing  this  great  industry  today,  and  there 
are  no  industrial  problems  before  the  American  people  which 
have  a  more  vital  and  economic  interest  to  the  people  at  large. 

Keeping  Ahead  of  Mineral  Development 

One  of  the  most  important  things  for  any  State  Geological 
Department  is  to  keep  pace  with  and,  if  possible,  to  be  a  little 
ahead  of  the  mineral  development  in  that  State. 

I  am  sorry  to  say  that  this  is  not  always  possible.  Financial 
encouragement  from  the  law-making  bodies  is  not  always  to 
be  had.  We  need  to  do  a  great  deal  of  educational  work  to 
arouse  the  proper  interest  in  mineral  development;  to  bring 
home  to  the  people  what  mineral  production  is  now  doing  for 
the  State  and  what  the  industry  may  be  made  to  do. 

Practically  every  State  in  the  Union  with  substantial  min- 
eral wealth  has  built  up  its  geological  survey  along  with  its 
mineral  development,  and  I  think  it  is  the  experience  that  the 
best  and  most  extensive  development  is  being  done  in  the 
States  where  the  most  comprehensive  Geological  Survey  pro- 
grams are  being  carried  out. 

The  importance  of  the  mineral  industry  to  our  State  can 
hardly  be  over-estimated,  embracing  as  it  does  the  production 
of  oil,  gas,  coal,  iron,  copper  and  other  minerals. 

The  total  production  of  crude  petroleum  in  Wyoming  this 
year  will  exceed  16,000,000  barrels,  worth  more  than  $45,- 
000,000  at  the  wells.  The  annual  coal  production  amounts  to 
about  8,000,000  tons,  valued  at  $20,000,000  at  the  mines.  The 
natural  gas  produced  and  consumed  in  the  State  amounts  to 
about  21,000,000,000  cubic  feet  per  annum,  worth  about  one 
million  dollars.  The  average  output  of  iron  ore  is  about 
500,000  tons,  worth  $1,500,000  at  the  mines.  The  copper  pro- 
duction aggregates  at  least  $200,000,  and  the  combined  pro- 
duction of  other  ores  and  minerals,  such  as  gold,  silver, 
uranium,  and  platinum,  will  increase  this  figure  to  $250,000. 
The  gross  receipts  of  the  annual  production  of  the  less  valu- 
able minerals  may  be  set  out  as  follows : 


474  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

Clay,  brick  and  fire $105,000 

Bentonite 10,000 

Gypsum 200,000 

Soda  and  magnesia 10,000 

Phosphate 5,000 

Mineral   waters 6,000 

Total $345,000 

Adding  to  this  total  the  value  of  our  quarry  output,  our 
limestone  for  flux  and  in  beet-sugar  mills,  our  building  stone, 
and  our  Sherman  Hill  gravel  for  railroad  ballast,  we  have  a 
new  total  of  aproximately  $500,000  for  the  less  valuable  min- 
erals. These  totals  may  be  re-assembled  for  convenience  as 
follows : 

ANNUAL  GROSS  VALUE   OF  WYOMING  MINERAL   PRODUCTS   AT 
PLACES  OF  PRODUCTION 

Petroleum   $45,000,000 

Coal    20,000,000 

Gas    1,000,000 

Iron 1,500,000 

Precious  metals 250,000 

Less  valuable  minerals 500,000 


Grand  total $68,250,000 

Putting  this  on  a  per  capita  basis,  it  means  that  the  annual 
mineral  production  amounts  to  about  $350,000  per  inhabitant, 
the  State  having  less  than  200,000  population. 

In  addition  to  the  money  paid  for  the  raw  mineral  products 
of  the  State,  it  is  well  to  consider  the  comparatively  large 
number  of  men  working  in  the  oil  fields,  in  the  coal,  iron,  and 
other  mines,  and  in  the  refineries;  and  also  the  men  engaged 
in  transporting  these  mineral  products  and  the  materials  and 
equipment  used  in  the  industry.  Millions  of  dollars  in  wages 
are  paid  to  these  men  yearly.  There  are  three  large  refineries 
and  a  number  of  small  ones  in  the  State,  having  a  total 
capacity  of  78,000  barrels  of  crude  oil  per  day.  By  the  process 
of  refining,  the  value  of  a  barrel  of  oil  is  increased  from  $2.85 
to  approximately  $7.50  at  wholesale  prices.  Thus,  the  value 
of  our  crude  production  is  increased  almost  300  per  cent,  by 
che  refineries  in  the  State. 

Resources  of  Wyoming 

Our  undeveloped  natural  resources  are  scarcely  exceeded  by 
those  of  any  other  State  of  the  Union,  and  of  these  the  mineral 
resources  are  by  far  the  most  striking.  Estimates  of  the 


MINING  IN  WYOMING  475 

intrinsic  value  of  our  great  mineral  resources  would  indeed  be 
very  crude  and  probably  misleading,  for  in  the  present  state 
of  undevelopment  there  is  no  market  for  a  great  portion  of 
our  mineral  deposits.  The  coal  measures  of  the  State  contain 
roughly  1,078,620,100,000  short  tons  of  workable  coal.  The 
royalty  value  of  this  incomprehensible  amount  of  coal  at  10 
cents  per  ton  is  $107,862,010,000.  It  will  be  hundreds  of 
years,  however,  before  the  bulk  of  this  coal  is  mined.  With 
petroleum  and  gas  it  is  somewhat  different.  The  oil  will  be 
largely  exhausted  in  the  United  States  inside  of  20  years,  and 
that  is  also  probably  true  of  the  oil  fields  of  Wyoming.  In  that 
time  Wyoming  may  produce  400,000,000  and  possibly  500,- 
000,000  barrels  of  crude  oil.  The  gas  fields  of  this  State 
appear  to  be  practically  inexhaustible,  but  of  course  they  are 
not.  They  are  capable  of  producing  about  700,000,000,000 
cubic  feet  of  gas  annually,  while  actual  consumption  is  only 
3  per  cent,  of  that  amount.  Much  of  this  gas  contains  a  high 
gasoline  content.  Ten  million  gallons  of  casing  head  gasoline 
are  produced  yearly,  and  this  can  be  multiplied  many  times  if 
industrial  utilization  of  the  resultant  dry  gas  can  be  obtained. 
Another  vast,  undeveloped  source  of  crude  oil,  gas  and  by- 
products is  the  shale.  The  formation  in  which  our  oil-shale  is 
found  covers  approximately  3500  square  miles  of  territory  in 
Southwestern  Wyoming.  Some  of  the  deposits  are  rich  in  oil 
and  contain  considerable  gas  and  ammonium  sulphate  to  the 
ton  of  shale.  It  was  estimated  by  the  United  States  Geological 
Survey  that  the  shale  beds  of  Northwestern  Colorado,  which 
are  similar  to  those  of  Wyoming,  are  capable  of  producing 
20,000,000,000  barrels  of  crude  oil.  If  that  is  the  case,  un- 
doubtedly Wyoming  shales  are  capable  of  producing  at  least 
that  amount  when  we  consider  that  the  shale  area  in  Colorado 
is  only  1900  square  miles,  as  compared  to  3500  square  miles 
in  Wyoming. 

The  State  has  also  many  other  rich  and  undeveloped  min- 
eral deposits  which  include  those  of  iron,  copper,  gold,  silver 
and  other  precious  metals,  asbestos,  asphalt,  bentonite,  clay, 
cement  materials,  epsomite,  fuller's  earth,  glass  sand,  granite 
and  other  building  stones,  graphite,  gypsum,  manganese,  mica, 
mineral  waters,  phosphate,  potash,  salt,  soda  and  sulphur,  all 
of  which  are  described  in  Press  Bulletin  Number  10,  pub- 


476  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

lished  October  1,   1920,  by  the  Wyoming  State   Geologist's 
office. 

Oil-Shales 

From  data  that  have  been  sent  in  to  my  office  I  believe  the 
typical  section  of  the  Green  River  shale  deposits  to  be  about 
as  follows : 

The  surface  is  sandstone,  averaging  about  100  feet  thick. 
Underlying  the  sandstone  is  a  thin  but  very  persistent  band 
of  black  waxy  shale  which  contains  from  60  to  110  gallons  of 
oil  to  the  ton.  This  bed  runs  from  a  few  inches  to  about  five 
feet  in  thickness.  Below  the  black  seam  is  a  brown  sandy 
shale  about  12  feet  thick,  which  will  average  45  gallons  of  oil, 
the  oil  being  very  high  in  gasoline.  Then  there  is  a  bed  of 
massive  paper  shale  50  to  150  feet  thick,  which  contains  about 
20  gallons  of  oil  on  an  average.  Underlying  the  paper  shale 
is  a  sandstone  member  from  40  to  60  feet  thick.  This  is  in 
turn  underlain  by  paper  shale  from  50  to  200  feet  thick,  which 
also  contains  about  20  gallons  of  oil  to  the  ton.  The  whole  is 
underlain  by  barren  shale. 

The  above  section  is  the  result  of  work  done  for  a  distance 
of  about  20  miles  south  of  Green  River.  Lateral  variation  of 
the  formation  is  very  pronounced,  and  there  are  also  a  num- 
ber of  faults  in  this  area.  It  was  noted  that  where  the  out- 
crops were  abrupt  the  richest  shales  were  found.  As  a  gen- 
eral rule  the  paper  shales  contained  a  zone  of  enrichment  from 
40  to  50  feet  thick  where  the  oil  content  was  a  barrel  or  more 
to  the  ton  of  shale.  Some  of  these  zones  were  massive  shales 
of  similar  character,  and  in  others  thin,  high-grade  seams  were 
found  which  brought  the  oil  percentage  up  to  considerably 
more  than  one  barrel  per  ton. 


WELFARE  WOKK  IN   UTAH  47' 


MINING  WELFARE  WORK  IN  UTAH 

By  C.  A.  ALLEN 

Mining  Engineer,  United  States  Bureau  of  Mines,  Chief  Mine  Inspector 
for  the  Industrial  Commission  of  Utah,  Denver,  Col. 

In  1917,  the  Legislature  of  the  State  of  Utah  passed  the 
Workmen's  Compensation  Act  providing  payment  of  compen- 
sation for  injuries  and  creating  the  Industrial  Commission,  of 
three  members,  to  carry  out  the  provisions  of  the  law.  The 
Industrial  Commission  is  both  authorized  and  commanded  to 
take  whatever  steps  are  necessary  to  protect  the  lives  and 
welfare  of  the  industrial  employes  in  the  State.  In  fulfilling 
its  obligations,  the  Commission  realized  that  it  must  not  only 
carry  on  the  inspection  of  working  places,  as  had  previously 
been  done,  but  that  it  must  go  further  and  combat  accidents 
and  disease  among  employes  in  every  practical  way.  The 
members  of  the  Commission  selected  their  chairman,  Mr.  P. 
A.  Thatcher,  to  take  charge  of  the  safety  part  of  their  work, 
and  his  efforts  and  interests  have  been  largely  responsible  for 
what  good  has  already  been  accomplished. 

In  the  fall  of  1918  the  Industrial  Commission  entered  into 
an  agreement  with  the  U.  S.  Bureau  of  Mines  whereby  the 
writer  was  given  charge  of  the  inspection  work  in  mines, 
mills,  smelters  and  quarries. 

Education  and  Accident  Prevention 

We  have  realized  fully  in  Utah  that  the  problem  of  accident 
prevention  is  largely  a  problem  of  education.  For  several 
years  public  sentiment  has  been  so  strongly  in  favor  of  placing 
life  and  health  above  the  dollar  that  practically  every  operator 
has  accepted  it  as  a  creed.  The  miners  accept  it  also,  but  there 
is  still  too  large  a  majority  of  them  who,  for  the  sake  of 
increasing  their  day's  earnings,  will  take  a  chance  on  working 
under  unsafe  conditions.  This  is  especially  true  of  contract 
employes.  The  question  then  is  to  educate  the  company  offi- 
cials as  to  how  they  can  best  safeguard  their  men,  and  to 
educate  the  men  so  that  they  will  not  take  those  chances  which 
sometimes  prove  fatal.  The  education  of  the  company  offi- 


478  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

cials,  especially  foremen  and  shift  bosses  in  metal  mines  and 
foremen  and  fire  bosses  in  coal  mines,  is  probably  more  neces- 
sary now  than  ever,  for  the  reason  that  the  scarcity  of  labor 
has  made  it  necessary  for  operators  to  choose  men  as  bosses 
who  have  not  had  a  thorough  training  in  mining.  The  same, 
of  course,  can  be  said  of  the  miners  themselves.  A  miner  who 
understood  every  detail  of  mining,  used  to  be  a  skilled  artisan, 
talked  the  language  of  the  miner,  and  took  great  pride  in  his 
ability  as  a  miner.  We  can  all  remember  when,  if  a  man 
could  say  he  was  an  old  Gilpin  county  miner,  or  Butte  miner, 
or  Leadville  miner  that  it  was  undisputed  evidence  that  he 
could  not  only  do  anything  around  a  mine,  but  frequently  it 
was  evidence  that  he  could  superintend  a  mine  or  make  a 
mine  examination  and  report.  I  believe  that  we  have,  today, 
better  miners  than  ever  before,  but  unfortunately  they  con- 
stitute probably  not  more  than  half  of  the  total  number  of 
mine  employes,  and  the  other  half  are  very  seriously  lacking 
in  the  fundamental  training  that  makes  real  miners.  It  is 
this  lack  of  training  in  the  school  of  experience  that  we  must 
now  try  to  make  up  for  by  education  in  other  ways. 

In  Utah,  our  work  so  far  has  been  largely  with  the  operat- 
ing officials,  but  we  have  done  something  with  the  miner  and 
are  planning  much  more  for  him  in  the  future.  For  the  offi- 
cials we  have  prepared  a  set  of  safety  standards  for  metal 
mines  and  for  coal  mines,  and  in  this  work  I  desire  to  acknowl- 
edge the  benefits  that  have  been  derived  from  the  efforts  of 
the  American  Mining  Congress. 

Safety  Standards  in  Utah 

In  the  first  place,  our  safety  standards  for  metal  mines  were 
based  on  the  recommendations  of  a  committee  first  appointed 
by  the  American  Mining  Congress.  This  committee,  as  many 
of  you  know,  worked  on  a  model  metal  mine  inspection  law  for 
a  number  of  years  and  finally  it  was  given  the  support  of  the 
U.  S.  Bureau  of  Mines,  and  its  report  was  published  by  the 
Bureau  in  Bulletin  75.  Not  only  did  we  base  our  safety 
regulations  on  this  bulletin,  but  after  the  first  draft  was  pre- 
pared it  was  submitted  to  a  committee  consisting  of  operators 
and  miners,  and  the  operators  were  chosen  by  the  Utah  Chap- 
ter of  the  American  Mining  Congress. 

The  safety  orders  for  coal  mines  were  standardized,  as  far 


WELFARE  WORK  IN  UTAH  479 

as  possible,  with  other  State  laws  and  with  the  requirements 
of  the  Associated  Insurance  Companies.  These  companies  had 
previously  standardized  their  inspection  work  to  compare  with 
the  accident  reports  of  the  U.  S.  Bureau  of  Mines.  The  coal 
mine  regulations  were  also  passed  upon  by  a  committee  of 
operators,  and  as  with  the  metal  mine  regulations,  the  high 
standing  of  the  operators'  committee  and  their  careful  con- 
sideration of  the  industry's  needs  were  largely  responsible  for 
the  value  of  the  regulations. 

As  before  stated,  I  believe  that  the  safety  standards  or  regu- 
lations which  we  have  adopted  will  be  more  valuable  as  a 
means  of  education  than  in  any  other  way.  We  endeavored 
to  make  them  sufficiently  complete  so  that  all  the  vital  points 
affecting  safety  would  be  covered,  and  we  have  expected  all 
bosses  and  other  officials  to  become  familiar  with  them.  It  is 
impossible  to  make  a  rule  that  will  cover  every  case  properly, 
and  occasionally  we  find  instances  where  a  certain  regulation 
does  not  improve  the  safety  at  all ;  but  even  in  such  instances 
the  particular  regulation  in  question  has  caused  the  mine 
foreman  or  some  other  official  to  think  on  the  subject,  and  in 
that  way  it  has  served  its  purpose  by  suggesting  some  way  of 
securing  the  results  desired. 

While  Utah's  fatal  accidents  are  not  as  low  as  we  might 
wish,  yet  a  careful  analysis  of  the  fatalities  shows  that  not 
over  15  per  cent,  were  due  to  unsafe  physical  conditions  at  the 
mines.  Our  work  with  employes  has  practically  only  been 
started,  due  to  the  fact  that  we  first  wanted  to  deal  with  the 
operators  and  company  officials  so  that  we  could  go  to  the 
miners-  with  clean  hands  and  tell  them,  "We  have  placed  re- 
sponsibility on  the  operators  to  do  everything  we  could  think 
of  to  make  their  mines  safe,  and  we  now  want  you  to  do  your 
part."  We  have  issued  an  occasional  letter  to  the  miners 
which  has  been  called  "Utah's  Safety  Record,"  and  the  interest 
of  the  miners  has  been  very  gratifying.  We  have  also  re- 
sorted to  the  arrest  of  certain  miners  who  took  a  contrary  view 
and  refused  to  do  what  was  required  of  them  in  keeping  their 
places  safe. 

Co-operation  With,  and  Education  of  Miners 

In  the  future,  we  plan  to  spend  a  great  deal  more  time  in 
securing  the  co-operation  of  the  miners  and  educating  them 


480  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

as  to  what  are  dangerous  practices.  The  "Utah's  Safety 
Record"  will  be  published  more  frequently,  and  the  Industrial 
Commission  will  co-operate  with  the  Bureau  of  Mines  in  con- 
ducting safety  rallies  at  those  mining  camps  which  do  not 
have  organized  company  safety  departments.  In  conducting 
these  rallies,  we  plan  to  reach  not  only  the  miners  themselves, 
but  the  women  and  children,  and  free  use  will  be  made  of 
moving  pictures,  in  addition  to  personal  talks. 

As  most  of  you  know,  Utah  stands  in  the  first  rank  of  States 
from  the  standpoint  of  its  educational  laws.  These  laws  are 
liberal  in  providing  for  Americanization  schools,  and  the 
State  Board  of  Education,  in  co-operation  with  the  University 
of  Utah,  have  already  started  the  Americanization  work  at 
the  larger  mining  camps.  They  are  also  planning  on  giving 
courses  in  practical  mining,  which  will  lay  great  stress  on 
safety.  The  lectures  for  these  courses,  it  is  hoped,  may  be 
mostly  prepared  by  local  men  in  the  industry  who  are  well 
versed  on  the  different  mining  subjects  which  they  will 
present. 


THE   WISCONSIN  INDUSTRIAL  COMMISSION  481 


PUBLIC  SERVICE  WORK  OF  THE  INDUSTRIAL  COMMISSION 
AMONG  THE  MINES  AND  QUARRIES  OF  WISCONSIN 

By  F.  W.  HUELS 
Educational  Deputy,  Industrial  Commission  of  Wisconsin,  Madison,  Wis. 

This  paper  chiefly  concerns  the  public  service  work  of  the 
Industrial  Commission  of  Wiscorisin,  as  related  to  the  min- 
eral industries  of  the  State.  From  this  brief  outline  the  con- 
tact that  the  Commission  has  with  Wisconsin's  mines  and 
quarries  and  other  mineral  enterprises  may  be  judged.  It 
touches  these  industries  in  many  ways  and  at  various  points. 
Wisconsin  As  a  Mineral  Producing  State 

Wisconsin  does  not  rank  high  among  the  mineral-producing 
States;  less  than  1  per  cent,  of  the  nation's  mineral  output 
being  produced  within  its  borders.  Yet  it  is  an  important 
mineral  producer.  It  ranks  fifth  in  the  production  of  iron  ore, 
third  or  fourth  in  zinc  and  fourth  or  fifth  in  granite.  There 
are  something  like  350  mines  and  quarries  operating  in  Wis- 
consin and  about  7000  persons  are  engaged  in  mining  and 
quarrying.  The  mineral  production  of  the  Badger  State 
approaches  $30,000,000  annually.  The  chief  mineral  industries 
are:  (1)  The  mining  and  reduction  of  ores,  such  as  as  iron, 
zinc  and  lead;  (2)  the  quarrying  of  stone,  such  as  granite, 
sandstone  and  limestone;  (3)  the  digging  and  working  of  clay 
for  making  brick,  tile,  etc.;  (4)  the  digging  of  sand  and 
gravel;  (5)  the  bottling  and  sale  of  mineral  waters. 
Industrial  Commission  Law 

The  Industrial  Commission  devotes  itself  almost  entirely 
to  the  conservation  of  man.  The  law  creating  the  Industrial 
Commission  provided  that  "all  employment"  and  "all  places 
of  employment  shall  be  made  safe."  It  empowered  the  Com- 
mission to  make  investigation  as  to  what  places  are  not  safe 
and  to  provide  such  safeguards  and  issue  such  orders  as  will 
make  them  safe. 

In  accordance  with  the  powers  granted  to  it  and  the  duties 
laid  upon  it  by  law,  the  Commission  prescribes  standards  and 
issues  orders  for  their  enforcement.  These  orders  then  have 
the  force  and  effect  of  law.  They  are  published  for  the  use 


482  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

of  all  citizens  who  may  be  interested.  Any  interested  party 
may  petition  the  Commission  for  a  hearing  on  the  reasonable- 
ness of  any  of  its  orders,  and  if  the  petition  is  denied,  he  may 
appeal  to  the  Circuit  Court.  Violation  of  any  order  is  punish- 
able by  a  fine  of  from  $10  to  $100  per  day  for  each  offense,  and 
each  day  is  a  separate  offense. 

The  Workmen's  Compensation  Act 

All  the  mines  and  quarries  of  the  State  come  under  the 
Workmen's  Compensation  Law.  This  law  provides  an  orderly 
method  of  compensating  injured  workers.  Every  employer  of 
three  or  more  persons  comes  under  the  provisions  of  this  law, 
which  is  administered  by  the  Commission.  The  law  specifies 
in  considerable  detail  the  schedule  of  payments  to  be  made 
for  injuries,  methods  of  computing  indemnity,  provides  for 
the  insurance  of  liability,  gives  methods  of  procedure  in  hear- 
ings, and  provides  for  the  awarding  of  compensation. 

In  1919  the  provisions  of  the  law  were  extended  so  as  to 
include,  in  addition  to  accidental  injuries,  all  injuries,  including 
occupational  diseases,  growing  out  of  and  incidental  to  employ- 
ment. 

The  liability  of  most  employers  is  carried  by  insurance  com- 
panies, but  some  employers,  by  reason  of  their  financial  abil- 
ity to  do  so,  are  allowed  to  carry  their  own  risk. 

A  notable  feature  of  the  law  is  the  15  per  cent,  provision. 
Where  an  injury  is  caused  by  the  failure  of  the  employer  to 
comply  with  any  statute  of  the  State  or  any  lawful  order  of 
the  Industrial  Commission,  compensation  and  death  benefits 
are  increased  15  per  cent.  And  this  increased  compensation 
must  be  paid  by  the  employer;  the  insurance  company  is  not 
permitted  to  pay  it.  Where  injury  is  caused  by  the  wilful 
failure  of  the  employe  to  use  safety  devices  where  provided 
by  the  employer,  or  where  injury  results  from  the  employe's 
wilful  failure  to  obey  any  reasonable  rule  adopted  by  the  em- 
ployer for  the  safety  of  the  employe,  or  where  injury  results 
from  the  intoxication  of  the  employe,  the  compensation  and 
death  benefit  provided  may  be  reduced  15  per  cent. 

Orders  Affecting  Mines  and  Quarries 

The  Commission's  requirements  for  safety  and  sanitation 
are  embodied  in  various  orders  and  codes.  Those  which  are 


THE  WISCONSIN  INDUSTRIAL  COMMISSION  483 

applicable  to  the  mining  and  quarrying  industries  are  shown 
below : 

General  Orders  on  Safety.  These  cover  the  safeguarding 
methods  applicable  to  all  industries  in  general.  They 
relate  to  such  matters  as  the  guarding  of  belts,  pul- 
leys, emery  wheels,  gears,  shafting  and  all  machinery. 

General  Orders  on  Sanitation.  Including  ventilation  ex- 
haust systems,  toilet  rooms  and  general  sanitation. 

General  Orders  on  Fire  Prevention.  Relating  to  the  pre- 
vention of  fire. 

General  Orders  on  Zinc  Mines.  This  will  be  more  fully 
described  in  another  part  of  this  paper. 

Building  Code.  This  is  a  code  of  rules  and  orders  specify- 
ing standards  in  regard  to  the  contruction,  repair 
and  maintenance  of  places  of  employment  and  pub- 
lic buildings,  which  will  make  them  safe  places  in 
which  to  work  or  assemble.  It  relates  to  such  mat- 
ters as  fireproof  construction,  fire  stops,  fire  escapes, 
structural  design,  etc. 

General  Orders  on  Existing  Buildings.  This  code  has  been 
in  effect  since  1915  and  covers  buildings  that  were 
in  existence  at  that  time  and  which  are  not  covered 
by  the  building  code. 

General  Orders  on  Building  Construction.  Safety  require- 
ments for  workmen  engaged  in  the  construction  of 
buildings  are  covered  by  this  code.  It  refers  to  scaf- 
folds, openings  and  floors,  ladders,  elevators,  der- 
ricks and  other  machinery,  piling  of  material,  etc. 

Lighting  Code.  Lighting  standards  for  factories,  mills, 
offices  and  other  work  places  are  prescribed  by  this 
code. 

Electrical  Safety  Code.  Safe  electrical  construction  is 
covered  by  this  code.  The  grounding,  guarding  and 
protecting  of  electrical  machinery,  distribution 
system  and  transmission  lines  from  the  standpoint 
of  safety  to  employes  and  other  persons  is  governed 
by  this  code. 

Boiler  Code.  The  frequency  of  boiler  explosion,  with  the 
resulting  loss  of  life  and  damage  to  property,  caused 
the  formulation  of  a  boiler  code.  It  covers  the 
installation,  operation  and  inspection  of  steam 
boilers. 

The  General  Orders  on  Zinc  Mines 

Since  January  4,  1915,  the  Commission  has  had  a  set  of 
general  orders  on  zinc  mines.     These  were  originally  drafted 


484  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

by  a  committee  of  practical  mine  engineers  and  operators 
appointed  by  representatives  of  a  majority  of  the  mine  own- 
ers of  the  State.  In  working  out  this  code  the  committee 
endeavored  to  base  the  standards  on  actual  experience  and 
what  was  considered  by  mine  owners  as  good  practice.  Be- 
fore their  adoption,  the  orders  were  submitted  to  all  zinc  mine 
companies  in  the  State  for  their  criticisms  and  suggestions. 

As  the  code  on  zinc  mines  now  stands  it  comprises  a  group 
of  safety  orders  relating  to  shafts,  ladders  in  shafts,  railings 
around  top  of  shafts,  hoisting  equipment,  signal  systems  for 
hoists,  etc.  A  section  of  the  orders  covers  sanitation,  includ- 
ing ventilation.  Another  section  gives  rules  for  all  employes 
which  are  intended  to  promote  safety.  Rules  for  the  handling 
of  explosives  are  given.  The  code  also  contains  a  summary 
of  points  of  safety  and  sanitation  common  to  all  industries 
and  applicable  to  all  places  of  employment. 

These  orders,  however,  covered  only  a  portion  of  the  haz- 
ards in  the  industry.  There  have  been  numerous  changes  and 
advances  in  the  arts  of  mining  and  quarrying  and  the  code  is 
now  somewhat  obsolete  and  inadequate.  Consequently,  at 
the  present  time  a  new  code  is  being  compiled,  which  will 
cover  mines  of  all  kinds  and  quarries. 

Mine  and  Quarry  Inspection  and  Accident  Prevention 

The  Commission  maintains  a  safety  and  sanitation  depart- 
ment in  which  a  corps  of  engineers  and  deputies  is  constantly 
at  work  inspecting  places  of  employment  in  regard  to  matters 
of  safety  and  sanitation. 

These  deputies  also  look  for  violations  of  any  of  the  orders 
of  the  Commission.  The  investigation  of  accidents  is  one  of 
their  important  duties.  Their  work,  however,  is  not  that  of 
policemen,  but  is  educational  in  character.  Whenever  they 
can  assist  employes  in  making  their  places  of  employment 
safer,  they  do  so.  The  Commission  gladly  responds  to  requests 
from  employers  for  the  services  of  its  deputies  and  engineers 
to  advise  them  regarding  the  specifications  and  requirements 
of  the  safety  standards. 

Almost  from  the  organization  of  the  Commission  it  has 
given  attention  to  accident  prevention  in  mines.  Until  1919, 
however,  the  Commission  did  not  have  any  deputy  on  its 
staff  who  had  a  practical  knowledge  of  mining  and  mining 


THE  WISCONSIN  INDUSTRIAL  COMMISSION  485 


methods.  The  regular  district  deputies  of  the  Commission 
inspected  the  mines  in  their  districts,  but  since  they  were 
not  miners,  they  could  do  very  little  more  than  to  inspect  the 
machinery  used  in  connection  with  the  mines.  'They  were 
not  familiar  with  the  underground  hazards  to  which  accidents 
in  this  industry  are  principally  due. 

To  cope  with  the  alarming  accident  rate  in  this  country,  a 
mining  inspector  was  employed  in  October,  1919.  His  work 
to  date  has  been  merely  preliminary,  but  he  has  examined  all 
of  the  mines  in  the  State  and  has  sought  to  interest  the  opera- 
tors and  the  mine  foreman  in  safety. 

Accidents  in  Mines  and  Quarries 

Mining  is  one  of  the  most  hazardous  of  all  occupations.  Lead 
and  zinc  mining  in  particular  has  had  a  bad  accident  record, 
and  insurance  rates  for  this  industry  are  among  the  highest 
known  in  Wisconsin.  Mining  was  responsible  in  1918  for  a 
total  of  397  compensative  accidents,  of  which  10  resulted 
fatally.  In  1919  there  were  a  total  of  295  accidents,  of  which 
9  resulted  fatally.  The  total  loss  in  working  days  from  these 
liability  accidents  in  mining  in  Wisconsin  was  93,684  in 
1918,  and  74,127  in  1919.  The  reduction  in  the  number  of 
accidents  in  the  latter  year  seems  to  have  been  due  to  the 
fact  that  there  were  fewer  mines  operating.  The  iron  mines 
of  the  State,  with  approximately  the  same  number  of  employes 
as  the  lead  and  zinc  mines,  have  a  much  better  accident 
record. 

The  most  serious  aspect  of  the  high  accident  rate  in  mining, 
and  specially  in  lead  and  zinc  mining,  is  that  a  large  propor- 
tion of  these  accidents  could  have  been  prevented.  This  could 
have  been  accomplished  through  better  mine  arrangements 
and  more  thorough  education  of  miners  in  safe  practices. 
Many  accidents  would  not  have  occurred  had  the  best  methods 
of  timbering,  handling  of  explosives,  tramming  and  hoisting 
been  followed.  Shaft  accidents,  which  usually  result  fatally, 
can  be  almost  entirely  eliminated  through  better  equipment  in 
shafts,  better  hoisting  facilities  and  the  rigid  enforcement 
of  good  operating  rules.  Buckets  and  cars  in  hoisting  shafts 
should  be  replaced  by  cages,  and  continuous  ladderways  with 
no  landings  should  be  changed  for  those  with  landings.  Haul- 


486  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

age  accidents  can  be  reduced  through  the  installation  of  bette 
haulage  equipment,  and  closer  attention  to  its  maintenanc 
and  operation.  Stope  accidents  and  injuries  from  falls  o 
ground  can  be  greatly  reduced  through  a  more  careful  selec 
tion  of  the  men  designated  to  do  this  work. 

The  mining  practice  that  is  followed  in  the  lead  and  zin 
mines  of  Wisconsin  is  the  result  of  years  of  experience.  Th 
fault  is  not  with  the  practice,  but  with  the  abuses  of  the  prac 
tice.  Most  of  the  operators  know  how  mining  should  be  con 
ducted  in  different  formations,  and  our  miners  know  how  to  d 
the  work,  but  the  trouble  is  that  they  do  not  always  act  ii 
accordance  with  this  knowledge.  Men  engaged  in  mininj 
underground  soon  forget  the  great  hazard  in  their  vocation 
and  special  efforts  are  needed  to  protect  them  against  becom 
ing  victims  of  their  own  carelessness  and  of  unsafe  practices 
Another  difficulty  is  that  many  of  the  mining  operations  ar 
on  so  small  a  scale  that  it  is  not  practical  for  them  to  emplo 
a  man  to  look  after  safety  work.  Consequently  they  need  th 
help  of  the  Industrial  Commission  in  accident  prevention  muc 
more  than  most  other  employers. 

The  quarries  of  the  State  employ  approximately  the  sam 
number  of  persons  as  do  the  lead  and  zinc  mines.  They  hav 
a  much  lower  accident  rate,  however,  with  only  79  compensa 
tive  accidents  all  told  in  1919.  These  accidents  included  tw 
fatalities  and  caused  a  total  loss  of  15,379  working  days.  Eve 
this  rate,  however,  is  high,  when  one  considers  that  most  o 
the  quarrying  in  Wisconsin  is  done  in  the  open  and  is,  conse 
quently,  free  from  such  dangers  of  metal  mining  as  falls  o 
rocks  and  transportation  of  material  in  narrow  tunnels.  Ther 
is  no  doubt  that  with  more  intensive  work  in  this  field  it  wi 
be  possible  to  reduce  this  accident  rate  greatly. 

Compensation  paid  to  injured  employes  in  mine  and  quarry 
accidents  in  Wisconsin  during  1919  was  as  follows: 

Indemnity.  Medical  Aid.  Total. 

Iron  mines $8,740  $1,790  $10,530 

Lead  and  zinc  mines 37,693  11,021            48,714 

Quarries   9,367  1,517            10,884 


Total..  $55,800  $14,328  $70,128 


THE   WISCONSIN    INDUSTRIAL  COMMISSION  487 

Other  Departments  of  the  Commission 

Child  Labor  Department.  Under  the  terms  of  the  Child 
Labor  Law,  the  Commission  has  jurisdiction  over  the  em- 
ployment of  children  in  industry.  The  law  is  intended  to  safe- 
guard the  life,  health,  safety  and  welfare  of  minors.  Employ- 
ment of  minors  is  prohibited  under  certain  conditions,  and 
there  are  certain  prohibited  employments.  Minors  under  18 
years  of  age  are  prohibited  from  working  in  or  about  mines 
or  quarries.  A  fine  of  from  $10  to  $200  is  provided  for  each 
violation  of  this  law.  Furthermore,  a  minor  injured  while 
employed  at  prohibited  work  is  entitled  to  treble  compensa- 
tion— three  times  what  he  would  ordinarily  be  compensated. 
The  insurance  carrier  is  not  obliged  to  pay  the  extra  com- 
pensation, but  twice  the  compensation  must  be  paid  by  the 
employer  direct  and  the  regular  compensation  by  the  insurance 
company. 

As  a  result  of  the  provisions  of  this  law,  no  children  below 
18  years  of  age  are  employed  in  the  mining  and  quarrying 
industries  of  Wisconsin. 

Women's  Department.  Employment  of  female  minors  and 
adult  women  in  or  about  any  mine  or  quarry  is  prohibited  by 
the  laws  of  the  State. 

Employment  Division.  The  Commission  operates  11  free 
employment  offices  in  co-operation  with  the  United  States 
Employment  Service.  During  the  year  ending  June  30,  1920, 
this  division  found  employment  for  94,770  persons,  of  whom 
76,774  were  men  and  17,996  were  women.  Only  a  small  part 
of  the  activities  of  this  division  related  to  mines  and  quarries, 
the  employment  statistics  for  mines  and  quarries  being  as 
follows : 

Applications  for  work 88 

Help  wanted 131 

Referred  to  positions 88 

Positions  secured. .  73 


488  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 


THE  WORK  OF  THE  STATE  GEOLOGICAL   SURVEY  AND 
MINING  CONDITIONS  IN  NORTH  CAROLINA 

By  COL.  JOSEPH  HYDE  PRATT 

Director,  North  Carolina  Geological  and  Economic  Survey,  Chapel  Hill, 

North   Carolina 

The  North  Carolina  Geological  and  Economic  Survey  was 
authorized  by  an  act  of  the  General  Assembly  of  1905  to  make 
special  investigations  of  the  mineral  resources  of  the  State; 
investigate  and  study  mining  conditions,  and  examine  the 
geological  formations  of  the  State  with  reference  to  their 
economic  products.  The  State  geologist  is  also  authorized  to 
arrange  for  and  accept  such  co-operation  from  the  several 
bureaus  of  the  Federal  Government  as  can  be  obtained  from 
these  bureaus.  He  is  also  authorized  to  study  conditions  in 
other  States  and  co-operate  with  other  States  in  any  way 
which  will  be  of  advantage  in  the  development  of  the  mineral 
resources  and  mining  industry  in  this  State. 

The  State  Survey  also  co-operates  in  every  way  possible  with 
the  other  departments  of  the  State,  and  tries  to  arrange  its 
program  in  connection  with  investigations  so  that  examina- 
tions can  be  made  of  such  mineral  products  as  certain  of  the 
State  departments  and  other  interests  of  the  State  particularly 
desire.  Thus,  during  the  past  year,  at  the  desire  of  the  State 
Highway  Commission  and  in  response  to  the  requests  from 
contractors  and  builders  throughout  the  State,  the  Survey 
has  been  making  an  elaborate  investigation  in  regard  to  the 
location  and  extent  of  structural  materials,  including  stone, 
gravel,  sand  and  certain  types  of  clay.  The  State  Highway 
Commission  is  furnished  with  advanced  copies  of  the  field 
reports  of  the  investigator  as  they  are  sent  into  the  home  office. 
The  Survey  makes  it  a  point  to  notify  the  owners  of  the  proper- 
ties that  are  being  investigated  as  to  the  character  of  the 
mineral  examined,  its  probable  value,  etc.,  and  when  inquiries 
come  into  the  office  for  such  minerals,  the  writer  is  referred 
direct  to  the  owner  of  the  property.  The  owner  also,  if  he 
desires,  is  furnished  with  an  advanced  copy  of  the  investi- 
gator's report  on  such  property.  The  Survey  does  not  under- 


L; 
MINENG   IN  NOR^H  CAROLINA  489 

e  to  make  a  complete  engineer's  report  on  these  properties, 
but  where  such  is  desired  the  owner  is  referred  to  competent 
mining  engineers  or  geologists  for  such  report. 

Mining  and  Treatment  Methods  Studied 

Similarly,  in  connection  with  mining  methods  and  treat- 
ment of  ores  for  market,  the  Survey  only  attempts  to  make 
complete  investigations  in  such  instances  where  it  is  not 
feasible  for  the  interested  parties  to  have  this  done  by  a  min- 
ing or  metallurgical  engineer.  In  many  cases  the  Survey  will 
make  a  preliminary  investigation,  determining  whether  or 
not  something  more  complete  is  advisable,  and  if  so  the 
owner  is  referred  to  a  competent  engineer  for  the  work.  In 
other  words,  it  is  the  policy  of  the  Survey  not  to  undertake 
such  work  as  is  unquestionably  the  work  of  the  engineer  in 
private  practice.  There  are  plenty  of  investigations  and 
examinations  for  the  Survey  to  make  without  undertaking  this 
other  type  of  examination,  although  there  is,  of  course,  some 
overlapping  in  its  work.  In  this  way,  there  are  the  most 
cordial  relations  existing  between  the  mining  operators  and 
engineers  and  the  survey.  This  is  also  true  in  connection 
with  the  other  branches  of  work  of  the  survey  in  forestry, 
hydraulics  and  drainage,  and  the  Survey  has  the  support  of 
practically  all  the  engineers  of  the  State. 

In  carrying  out  the  provisions  of  this  act,  the  State  Survey 
has  first  devoted  its  time  to  the  investigation  of  the  location 
of  sources  of  supply  of  such  minerals  and  rocks  as  were  be- 
lieved to  occur  in  commercial  quantity  and  for  which  there 
was  a  large  market.  As  these  reports  were  completed,  the 
Survey  has  devoted  more  time  to  more  purely  scientific  investi- 
gations relating  to  methods  of  mining  and  treatment  of  ores. 
The  Survey  has  also  taken  up  the  questions  of  marketing  its 
mineral  products  and  their  utilization  in  manufacturing  indus- 
tries within  the  State.  With  the  construction  of  new  rail- 
roads into  various  sections  of  the  State,  mineral  deposits  that 
were  formerly  not  of  commercial  value  on  account  of  their 
isolation  have  become  profitable  sources  of  supply  of  certain 
minerals,  and  this  often  leads  to  new  investigations  regarding 
these  particular  localities,  and  the  State  Survey  has  always 
made  a  special  effort  to  investigate  just  as  early  as  possible 


490  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

these  areas  in  order  that  the  people,  as  well  as  the  railroad 
company,  may  reap  as  full  advantage  as  possible  from  the 
construction  of  the  railroad. 

Iron  Ores  of  North  Carolina 

During  the  past  two  years  the  Survey  has  been  making  a 
special  investigation  of  the  iron  ores  of  the  State  in  regard  to 
their  quantity  and  present  commercial  value,  due  to  increase 
in  price  of  pig-iron  and  also  due  to  the  construction  of  rail- 
roads into  certain  of  the  iron  fields  of  Ashe  county.  These 
investigations  have  been  made  in  co-operation  with  the  United 
States  Geolgical  Survey.  The  State  Survey,  in  addition,  has 
made  topographic  maps  of  the  areas  in  which  the  present  com- 
mercial iron  ores  occur  in  Cherokee,  Ashe  and  Avery  counties. 
The  Survey  now,  in  co-operation  with  the  Bureau  of  Mines,  is 
making  an  investigation  in  regard  to  improved  methods  of 
mining  and  treatment  of  the  iron  ores  in  these  two  districts. 

The  Survey  has  just  completed  and  has  in  press  a  report 
on  the  limestone  deposits  of  the  State. 

Each  year,  in  co-operation  with  the  United  States  Geologi- 
cal Survey,  the  State  Survey  collects  statistics  regarding  the 
mineral  production  for  the  current  year,  and  the  results  are 
published  as  an  enconomic  paper  of  the  Survey  publication.  In 
addition  to  the  statistics,  information  that  is  considered  of 
interest  is  given  in  regard  to  the  condition  of  each  mineral 
industry  and  information  is  also  given  in  regard  to  any  new 
methods  of  mining  or  quarrying,  and  when  new  deposits  are 
opened  and  developed  a  description  is  given  of  the  location 
of  such  deposits.  In  connection  with  these  statistics,  a  list  is 
given  of  the  names  and  addresses  of  producers  of  these  sev- 
eral minerals,  the  Survey  desiring  to  bring  in  every  way  pos- 
sible the  producer  in  touch  with  the  consumer.  The  Survey 
has  and  is  assisting  in  every  way  possible  the  producer  to 
advertise  and  bring  before  the  public  his  mineral  product. 
The  Survey  keeps  in  touch  with  the  character  and  quality  of 
the  product  produced,  and  is  often  called  upon  by  the  con- 
sumer for  a  statement  in  regard  to  the  mineral  product  pro- 
duced. 

The  Survey  is  preparing  a  new  geological  map  and  collect- 


MINING   IN  NORTH  CAROLINA  491 

ing  data  and  information  for  a  general  volume  on  the  mineral 
resources  of  the  State. 

Another  phase  of  the  Survey's  work  that  is  found  to  be  of 
value  in  advertising  the  mineral  resources  of  the  State  is 
co-operating  with  the  State  and  county  fairs  in  exhibiting  the 
State's  mineral  resources.  The  Survey  is  also  authorized 
to  co-operate  with  expositions  in  making  exhibits. 


492  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 


VISUAL  INSTRUCTION  OF  THE  MINING  INDUSTRY  AS  CAR- 
RIED ON  BY  U.  S.  BUREAU  OF  MINES. 

By  M.  F.  LEOPOLD, 
Safety  Engineer,  Bureau  of  Mines,  Washington,  D.  C. 

The  old  proverb  of  "Seeing  is  believing"  is  realized  more  and 
more  each  day  through  the  medium  of  the  motion-picture  film. 
Japan,  for  instance,  in  educating  her  people,  has  abided  by  the 
old  saying,  "One  look  is  worth  a  thousand  words."  This  is 
characteristic  of  every  Japanese  who  seeks  information  and 
knowledge  of  the  world's  great  industries,  so  that  he  may  bring 
the  same  home  to  his  own  shores  for  development. 

Education  by  Moving  Pictures 

Americans  are  beginning  to  realize  this  same  fact,  and  many 
industrial  organizations  have  been  formed  in  this  country  in 
the  past  few  years  whose  purpose  is  to  bring  before  the  public 
the  importance  of  visual  instruction  and  education.  From  in- 
formation received  by  the  U.  S.  Bureau  of  Education,  it  is 
shown  that  84%  of  the  universities  and  other  educational  in- 
stitutions in  the  country  are  provided  with  motion-picture 
apparatus  to  be  used  for  instruction  purposes.  At  the  present 
time  the  Military  and  Naval  Academies  devote  one  period  each 
day  for  the  purpose  of  instructing  students  in  various  phases 
of  their  military  training  through  the  use  of  motion-picture 
films.  Thirty-seven  States  have  well-organized  societies  for 
visual  instruction,  and  through  these  films  are  being  dis- 
tributed throughout  their  respective  States.  This  includes 
service  to  every  educational  institution,  from  kindergarten  to 
university. 

One  of  the  duties  of  the  Bureau  of  Mines,  the  Government 
representative  of  the  mining  industry,  is  to  gather  and  dissemi- 
nate information  to  the  best  of  its  ability  both  to  educational 
institutions  and  the  public  in  general.  This  has  been  done  in 
the  past  in  many  ways — such  as  exhibits ;  publication  and  dis- 
tribution of  bulletins  and  miners'  circulars ;  and  collecting,  pro- 


PICTURIZATION   OF   MINING  493 

ducing  and  distributing  motion-picture  films  which  show  prac- 
tically every  phase  of  mining  and  metallurgical  industries. 

Value  of  Pictures  to  Students 

Until  several  years  ago  there  were  few  of  these  films  in 
existence,  this  being  due  partly  to  the  fact  that  Congress  failed 
to  provide  funds  for  the  Government  to  make  such  films,  while 
few  were  produced  by  mining  organizations.  When  we  take 
into  consideration  that  1,000,000  men  are  employed  in  the  min- 
ing industry  of  America,  and  that  many  young  men  are  pre- 
paring themselves  yearly  in  our  colleges  to  engage  in  this  occu- 
pation, we  realize  fully  the  necessity  of  bringing  before  the 
student  every  means  that  may  better  acquaint  him  with  the 
knowledge  of  the  profession. 

Recently  there  was  produced  by  the  Bureau  of  Mines  a  film 
called  'The  Story  of  Coal/  and  we  are  informed  by  coal  people 
that  this  has  done  more  to  acquaint  the  student  and  the  layman 
with  conditions  that  enter  into  bringing  the  coal  from  the  mine 
to  the  consumer  than  any  other  means  which  has  been  used  in 
regard  to  this  phase  of  instruction;  and  although  there  are 
about  20  sets  of  this  film  in  circulation  at  the  present  time, 
the  requests  now  reaching  the  Bureau  cannot  be  complied  with 
for  at  least  one  month  after  they  are  received.  This  will  give 
some  idea  of  its  popularity,  it  being  estimated  that  there  are 
about  30,000  people  each  month  who  see  this  film.  The  cost  of 
producing  it  was  $12,000.  Funds  were  provided  by  the  Na- 
tional Coal  Association,  and  the  photography  was  done  under 
the  direct  supervision  of  engineers  of  the  Bureau  of  Mines. 
This  same  arrangement  has  been  used  in  producing  various 
other  films,  such  as  The  Story  of  Petroleum/  'The  Story  of 
Ingot  Iron,  The  Story  of  Sulphur/  The  Story  of  Asbestos/ 
and  several  other  subjects  now  in  course  of  preparation.  In 
each  case  the  funds  are  being  provided  by  the  organization 
whose  mines  and  factories  are  photographed,  and  credit  is 
given  them  by  having  the  main  title  of  the  film  read  as  follows : 

Produced  under  the  direction  of  the  United  States 
Bureau  of  Mines  in  co-operation  with — (name  of  company 
providing  the  funds) . 

In  producing  these  films,  all  expenses  in  connection  with  the 
services  of  the  engineers  of  the  Bureau  who  supervise  the  work 


494  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

is  paid  by  the  Government.  The  distribution  of  films  is  han- 
dled entirely  through  the  Pittsburgh  office,  the  only  cost  to 
those  borrowing  them  being  the  payment  of  postage  from  the 
Bureau  and  return.  However,  it  is  expected  that  the  films  will 
receive  proper  care  and  handling,  and  that  they  will  not  be 
shown  at  any  meeting  where  an  entrance  fee  is  charged,  where 
the  Government  film  is  the  only  one  to  be  shown.  Of  course, 
films  are  often  loaned  to  organizations  where  an  evening  enter- 
tainment is  planned  by  the  use  of  other  films  in  addition  to  the 
Government  film,  and  a  small  admission  fee  is  charged  to  de- 
fray expenses,  such  as  the  rental  of  the  hall,  cost  of  motion- 
picture  operator,  etc. 

Danger  to  Photographers 

In  producing  films  of  the  mining  industry,  it  is  often  neces- 
sary to  penetrate  such  places  as  will  require  the  utmost  care, 
and  the  matter  of  safety  plays  a  large  part  in  their  production. 
By  this  I  mean  that,  should  we  enter  mines  containing  danger- 
ous gases,  it  is  necessary  that  the  powerful  arc-lights  that  are 
used  shall  be  equipped  with  all  safety  devices.  To  do  this  work 
successfully  it  was  necessary  to  obtain  the  co-operation  of 
a  film-producing  company  that  has  provided  itself  with  the 
necessary  equipment.  In  the  production  of  'The  Story  of  CoaP 
it  was  necessary  to  have  the  full  approval  of  the  State  Mine 
Inspector  before  we  could  enter  the  mine,  and  before  produc- 
ing 'The  Story  of  Petroleum'  it  was  necessary  to  Have  the  ap- 
proval of  the  proper  State  official  of  the  State  in  which  the 
refinery  was  located,  as  in  each  case  there  was  the  presence  of 
gas,  and  the  matter  of  safety  had  to  be  considered  from  every 
angle. 

Distribution  of  Pictures 

In  the  production  of  a  motion-picture  film  there  are  several 
points  to  be  taken  into  consideration,  such  as  the  quality  of  the 
photography ;  the  subject  should  be  handled  in  a  careful  man- 
ner, and  after  the  film  is  made  provision  is  necessary  to  see 
that  it  is  given  such  distribution  as  will  produce  the  highest 
benefits. 

In  bringing  this  subject  before  the  sessions  of  the  American 
Mining  Congress  I  have  in  mind  the  matter  of  seeking  closer 


PIGTURIZATION   OF   MINING  495 

co-operation  between  the  Bureau  of  Mines  and  schools  of  mines 
and  mining  throughout  the  country,  toward  making  the  films 
that  we  have  in  our  possession  at  the  present  time  do  the  most 
work  possible  from  an  educational  point  of  view.  The  large 
mining  companies  and  organizations  that  have  co-operated 
with  the  Bureau  up  to  this  time  are  to  be  congratulated  for  the 
spirit  they  have  shown  in  providing  funds  for  this  work,  as 
not  in  one  single  case  that  I  have  approached  so  far  has  the 
matter  of  advertisement  been  mentioned  by  them,  their  first 
thought  being  to  educate  the  student  and  layman  in  the  vari- 
ous activities  of  the  mining  industry.  In  many  cases,  when  I 
have  suggested  placing  their  name  on  the  film  for  the  part  they 
took,  they  stated  that  they  are  not  after  publicity,  but  for 
higher  education  in  the  mining  profession. 

Library  of  Pictures 

If  the  excellent  co-operation  that  exists  at  this  time  between 
the  Bureau  and  the  industry  continues,  it  seems  certain  that  be- 
fore long  the  Bureau  will  have  the  best  existing  collection  of 
motion  pictures  of  the  mining  and  metallurgical  industries. 
All  engineering  schools  and  similar  organizations  should  be 
informed  of  this  service  offered  by  the  Government,  and  should 
avail  themselves  of  the  opportunity  of  using  them  to  the  best 
advantage  of  all  concerned. 

It  is  quite  difficult  to  select  all  phases  of  mining  and  metal- 
lurgical industries,  and  at  the  same  time  visit  officers  of  the 
companies  to  ask  their  co-operation,  and  I  feel  sure  that  your 
help  will  assist  the  Bureau  greatly  in  obtaining  subjects  of 
great  interest.  I  want  all  present  at  this  session  to  feel  at 
liberty  to  request  the  loan  of  these  films  whenever  you  desire 
them,  and  you  may  feel  assured  that  the  Bureau  will  co-operate 
with  you  in  this  educational  undertaking  and  I  hope  that  in 
future  you  will  co-operate  with  the  Bureau  toward  enlarging 
its  library,  as  it  must  be  remembered  that  this  library  belongs 
to  you  and  is  for  your  use. 

At  the  present  time  the  Bureau  has  about  63  motion-picture 
subjects,  some  taken  as  far  back  as  eight  or  ten  years  ago. 
We  want  to  renew  these  at  as  early  a  date  as  possible,  so  as  to 
have  as  complete  a  set  as  possible,  which  will  be  used  not  only 
by  schools  and  colleges,  but  other  organizations  as  well. 


496  PROCEEDINGS   OF  AMERICAN-  MINING  CONGRESS 

Demand  for  Films 

I  received  a  letter  from  the  Pittsburgh  office  in  regard  to 
calls  from  the  various  colleges,  and  I  received  a  letter  from  the 
engineers  there  that  six  colleges — Massachusetts  Institute  of 
Technology,  Cornell  University,  Columbia  University,  Lehigh 
Institute  of  Technology,  University  of  Illinois  and  University 
of  Pennsylvania — have  applied  for  the  newest  films.  You  may 
have  to  wait  a  month  or  so  to  get  them. 

I  hope  that  we  can  see  our  way  clear  so.on,  no  matter  what 
company  produces  a  film  dealing  in  any  way  with  the  mining 
industry,  that  they  will  produce  such  a  picture  under  the  direc- 
tion of  the  Bureau  of  Mines,  and  those  showing  it  in  schools 
will  feel  assured  then  it  is  correct  from  an  engineering  stand- 
point. 

We  are  also  endeavoring  to  get  a  safety  film  that  will  carry 
safety  to  the  miner.  Our  mine-rescue  cars  are  equipped  with 
a  picture  screen,  and  we  show  safety  methods  to  the  miner  in 
that  way. 

All  schools  of  mines  are  invited  to  call  on  us  for  these  films. 
Columbia  and  Cornell  have  had  copies  of  our  films  printed  at 
their  own  expense  so  that  they  are  always  available  for  use 
without  the  necessity  of  borrowing  and  returning  ours. 


MINING  OIL- SHALE  497 


OIL- SHALE  CONFERENCE 


THE  NEXT  MINING  PROBLEM 


y 


By  MARTIN  J.  GAVIN 

Refinery  Engineer,  United  States  Bureau  of  Mines,  Salt  Lake  City,  Utah 
(Presented  by  Permission  of  the  Director,  United  States  Bureau  of  Mines) 

The  next  mining  problem  which  we  are  already  facing  is 
that  of  extracting  oil-shale.  Its  importance  can  be  readily 
indicated  by  the  fact  that  practically  every  one  who  has 
estimated  the  costs  and  profits  in  the  potentially  great  oil- 
shale  industry,  agrees  that  the  cost  of  mining  the  shale  will 
probably  be  the  geratest  single  item  in  the  total  cost  of  pro- 
ducing crude  or  refined  products  from  oil  shale.  This  general 
agreement  holds  whether  the  whole  tone  of  the  estimates  are 
high  or  low.  Addressing  this  Congress  last  November  in  St. 
Louis,  I  mentioned  the  fact  that  in  1919  the  cost  of  mining 
oil  shale  in  Scotland  represented  53  per  cent,  of  the  total  cost 
of  placing  refined  shale  products  on  the  market.  I  also  stated 
as  my  belief,  that  mining  methods  and  the  possible  reduction 
in  the  cost  of  mining  oil  shale  should  be  given  serious  consid- 
eration, as  a  reduction  of  10  per  cent,  in  mining  costs  will 
probably  be  equivalent  in  value  to  a  reduction  of  10  per  cent, 
in  all  the  other  items  contributing  to  the  cost  of  producing 
refined  shale  products,  or  a  reduction  of  5  per  cent,  on  the  total 
costs.  In  other  words,  a  reduction  of  10  per  cent,  in  mining 
costs  might  well  be  equivalent  to  a  reduction  of  25  per  cent,  in 
retorting  costs. 

No  Shales  in  America  Mined  on  Large  Scale 

Oil  shales  have  not  as  yet  been  mined  on  a  commercial  scale 
in  this  country  and  therefore  we  must,  to  a  certain  extent, 
theorize  as  to  the  conditions  and  problems  to  be  encountered 
in  commercial  oil-shale  mining.  Many  believe  that  much  of 
our  oil-shale  mining  can  be  done  by  steam  shoveling,  open-pit 
or  quarrying  methods,  but  official  evidence  indicates  that  this 


\ 


498  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

can  hardly  be  the  case  except  in  probably  rare  instances,  be- 
cause shale  seams  of  sufficient  richness  to  be  commercially 
treated  are  too  thin  or  covered  with  too  much  overburden  to 
make  steam-shovel  mining  or  other  open-pit  work  economically 
possible,  particularly  speaking  of  the  shales  of  the  Green 
River  formation  of  the  Rocky  Mountain  district. 

The  only  official  data  available  as  to  the  thickness  and  rich- 
ness of  shale  seams  are  those  supplied  by  D.  E.  Winchester  in 
bulletins  of  the  United  States  Geological  Survey.  Assum- 
ing a  25-gallon  shale  to  be  commercial,  Winchester's  reports 
indicate  that  the  greatest  thickness  of  shale  of  this  quality 
sampled  and  tested  by  him  was  23  feet.  It  is  usual  to  find 
seams  varying  from  less  than  1  inch  to  5  or  6  or  even  10  feet 
thick  yielding  25  gallons  of  oil  and  more  per  ton.  The  par- 
ticular 23-foot  seam,  sampled  across  the  face  yielded,  in  the 
laboratory  report,  nearly  34  gallons  of  oil  to  the  ton,  but  this 
seam  occurs  between  practically  barren  beds  much  thicker. 

In  Mr.  Winchester's  work,  however,  he  found  it  quite  impos- 
sible to  measure  accurately  or  to  secure  samples  from  the 
practically  inaccessible  shale  cliffs,  which  in  many  places 
form  the  top  of  what  remains  of  the  Grand  River  formation. 
Those  who  have  visited  the  shale  district  along  the  lines  of  the 
Denver  &  Rio  Grande  Railroad,  are  familiar  with  these  great 
and  practically  vertical  cliffs.  In  one  case,  Winchester  has 
reported  on  a  section  of  the  shale  strata  at  a  point  on  Para- 
chute Creek,  ten  miles  north  of  the  town  of  Grand  Valley, 
Colo.  In  his  report,  he  estimates  the  thickness  of  the  over- 
burden which  forms  the  top  of  the  cliffs,  as  about  150  feet. 
Below  this  is  125  feet  of  oil  shale  which  he  estimates  will 
yield  15  gallons  of  oil  to  the  ton.  Below  this  is  75  feet  of  shale 
estimated  to  yield  30  gallons  to  the  ton  on  the  average.  Next 
is  25  feet  of  rich  shale,  a  sample  of  which  taken  from  a  5-foot 
seam  near  the  middle  yielded  on  test,  42  gallons  of  oil  to  the 
ton,  and  below  this  seam  is  a  30-foot  bed  of  shale  estimated  to 
yield  about  30  gallons  per  ton.  Below  this  is  the  usual 
sequence  of  narrow  strata  of  fairly  rich  material  separated  by 
barren  or  low-grade  beds.  In  this  particular  case  we  have  130 
feet  of  shale  which  Winchester  estimates  will  yield  in  excess 
of  30  gallons  of  oil  to  the  ton  on  the  average,  covered  with 
275  feet  of  practically  barren  overburden,  according  to  his 
estimates. 


MIXING  OIL-SHALE  49U 

If  these  estimates  are  correct,  and  if  this  section  is  repre- 
sentative of  any  great  part  of  the  upper  portion  of  the  Green 
River  formation,  the  matter  of  mining  takes  quite  another 
attitude.  It  would  seem,  in  a  case  such  as  the  above,  quarry- 
ing or  steam-shovel  methods  could  be  used  which  would  reduce 
the  cost  of  mining  shale  far  below  that  which  could  be  expected 
if  underground  methods  had  to  be  used,  although  there  is  a 
great  thickness  of  overburden  to  contend  with. 

Unfortunately,  it  was  not  possible  in  all  cases  for  Mr.  Win- 
chester to  secure  samples  of  the  shale  strata.  Many  of  his 
figures  are  estimates,  both  as  to  thickness  of  the  bed  and  oil 
yield,  and  the  majority  of  his  samples,  when  they  were  taken, 
were  from  near  the  outcrop,  and  therefore  may  not  indicate 
accurately  the  richness  of  the  shale  a  few  feet  back  from  the 
surface,  a  point  brought  out  by  Mr.  Winchester  in  his  reports. 

Underground  or  Surface  Methods 

It  seems  to  me  highly  important,  in  view  of  the  relative 
magnitude  of  the  cost  of  mining  oil  shale  and  the  difference  in 
cost  between  underground  mining  and  quarrying  or  steam- 
shovel  operations,  that  the  thickness  and  quality  of  the  oil- 
shale  deposits  of  the  country  be  ascertained  as  speedily  as 
possible,  preferably  by  examination  of  samples  obtained  by 
core  drilling.  The  cost  of  core  drilling  is  such  that  with  the 
present  appropriations  the  Bureau  of  Mines  cannot  undertake 
to  do  the  work,  and  I  doubt  &  the  Geological  Survey,  to  which 
such  a  problem  properly  belongs,  is  any  better  able  than  the 
Bureau  to  do  the  work  for  the  same  reason.  However,  we  are 
doing  all  we  can  to  have  examinations  of  this  nature  made  in 
some  manner,  either  by  private  of  governmental  action  or 
both,  because  we  believe  the  results  of  such  work  will  be 
invaluable  at  the  present  time  and  a  matter  of  great  interest 
to  everyone  concerned  with  oil  shales  in  this  country.  Core 
drills  should  also  give  a  good  idea  of  the  persistence  of  indi- 
vidual shale  seams,  many  of  which,  according  to  Winchester, 
vary  in  thickness  a  great  deal  from  place  to  place. 

From  the  data  we  now  have  at  our  disposal,  it  seems  that 
while  preliminary  mining,  in  many  cases,  may  be  carried  on 
by  benching  and  quarrying  methods,  possibly  followed  by  a 
period  of  stripping  operations  after  a  short  period  of  large 


500  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

scale  development,  practically  all  the  shales  will  be  mined  by 
underground  methods. 

Oil-shale  is  the  raw  material  from  which  shale-oil  is  pro- 
duced. Therefore,  important  consideration  must  be  given  to 
the  relative  position  of  the  retorting  plant  and  the  mine  and 
to  the  transportation  of  shale  from  the  mine  opening  to  the 
plant.  In  one  way,  mining  methods  are  related  to  the  retort- 
ing of  the  shale.  The  method  used  for  mining  will,  to  some 
extent,  possibly  depend  on  the  type  of  retort  used.  If  the 
retort  is  designed  or  operates  best  on  coarse  material,  the  min- 
ing method  should/ be  one  which  produces  a  minimum  amount 
of  fine  material.  If  fine  can  be  treated  in  the  retorts,  except 
for  disadvantages  in  handling,  there  will  be  no  objections  to 
producing  fines. 

Mining  Shale  May  Be  Similar  to  Mining  Coal 

The  methods  used  in  mining  shale  underground  will  prob- 
ably be  very  like  those  employed  in  coal  mining,  but  until  shale 
is  mined  in  quantity  the  exact  details  or  methods  are  impos- 
sible to  predict.  It  is  probable  that  the  room-and-pillar  method 
commonly  used  in  mining  shale  in  Scotland  and  in  mining  coal 
in  the  Western  States  will  be  largely  used.  This  method  con- 
sists in  driving  entries  from  which  rooms  are  turned  at  suit- 
able intervals.  Pillars  of  size  sufficient  to  support  the  roof 
are  left,  but  the  amount  of  shale  recovered  by  this  method 
and  the  size  of  pillar  left  are  indeterminate  until  actual  shale 
mining  operations  have  been  carried  on.  Naturally,  the  size 
of  pillars  necessary  to  support  the  roof  will  vary  in  different 
localities  and  on  different  seams.  Many  of  those  planning  to 
mine  oil  shale  in  this  country  have  informed  me  that  they 
expect  to  use  the  room-and-pillar  method  after  a  short  period 
of  open  work. 

The  room-and-pillar  method  is  used  generally  for  mining 
shale  in  Scotland,  although  the  longwall  system  is  used  to  some 
extent.  Commonly,  a  shaft  or  incline  is  sunk  to  the  main  shale 
seam,  and  galleries  are  extended  from  the  bottom  of  the  entry 
in  all  directions  ultimately  to  the  limits  of  the  deposit  which 
it  is  decided  to  take  out  through  the  one  opening.  Proper  pro- 
vision is  made  for  ventilation,  drainage  and  shortest  haul  to 
the  main  gallery.  A  shale  working  must  be  provided  with  two 
openings,  as  it  is  unlawful  for  the  men  to  use  the  same  entry 


MINING  OIL-SHALE  501 

as  that  in  which  the  shalev  is  hauled.  In  the  most  modern 
mines,  the  shale  is  raised  to  the  surface  in  cars  hauled  by  end- 
less ever-running  steel  cables. 

After  the  galleries  have  been  extended  to  the  limits  pre- 
viously indicated,  the  pillars,  which  are  usually  much  larger 
in  cross  section  than  the  galleries,  are  removed,  working  from 
the  outside  back  towards  the  entry.  About  25  per  cent,  of  the 
shale  is  left  in  the  ground  in  the  form  of  small  pillars  and 
finally  divided  refuse  mixed  with  shale  of  poor  quality.  The 
roof  gradually  sinks  in  behind  the  maximum  removal  of  shale 
and  in  most  cases  the  movement  is  transmitted  to  the  surface 
of  the  ground. 

Methods  in  Scotland 

In  Scotland  there  are  several  shale  seams  overlying  one 
another.  In  general,  there  are  at  least  three  workable  seams 
extending  over  the  whole  area.  It  is  the  usual  practice  to  mine 
out  these  seams  in  sections  from  the  same  entry.  Electric 
power  and  lighting  are  used  throughout  the  mines. 

On  an  average,  a  man  working  at  the  face,  mines  about 
4*/2  tons  of  shale  a  day.  The  miners  and  their  helpers — a 
miner  has  one  helper,  sometimes  he  has  more — are  considered 
as  men  working  at  the  face.  The  miner  furnishes  his  own 
powder  and  lamps.  The  company  sells  him  powder  and  oil  for 
his  lamps  at  cost.  The  company  furnishes  the  drills  and 
dresses  them  free  of  charge. 

With  few  exceptions,  holes  are  drilled  by  hand-operated 
ratchet  drills.  Electric-driven  drills  have  been  used,  but 
for  an  unexplained  reason  have  not  been  generally  adopted. 
Usua}ly  gunpowder  is  the  explosive  used  in  breaking  down 
the  shale,  its  slow  combustion  causing  a  rending  action  and 
reduces  the  amount  of  fines  produced  to  a  minimum,  an 
important  consideration  in  the  working  of  a  Scotch  retort. 
About  three-quarters  of  a  pound  of  powder  is  used  per  ton  of 
shale  mined. 

According  to  Caldwell  (Page  119,  Oil  Shales  of  the  Lo- 
thians) ,  the  gases  found  in  shale  workings  though  not  of  the 
volume  of  those  in  coal  seams,  are  of  explosive  and  dangerous 
character.  The  most  common  is  fire-damp  or  methane,  which 
is  given  off  by  the  strata.  This  gas,  being  lighter  than  air,  is 
found  in  the  raises  and  in  holes  and  cavities  in  the  roof.  It 


502  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

also  accumulates  in  large  quantities  in  the  waste,  especially 
in  old  workings,  where  it  is  subject  to  expansion  by  a  fall  in 
barometric  pressure,  causing  it  to  come  out  to  the  haulage- 
ways.  Ordinary  precautions  in  regard  to  ventilation  in  such 
circumstances  are  sufficient  to  deal  with  these  outbursts,  but 
if  the  precautions  are  neglected,  there  is  grave  danger  of 
explosion.  This  gas  is  not  often  found  in  the  levels,  but  its 
presence  there  is  accounted  for  by  fissures.  In  cross-cut 
driving  it  often  escapes  from  these  fissures,  especially  when 
approaching  the  shale  seam,  and  it  may  be  found  necessary  to 
do  this  work  with  closed  lamps  instead  of  the  naked  light 
invariably  used  in  shale  mining. 

Another  gas,  carbon  dioxide  or  black  damp,  is  found  in  the 
shale  seams,  but  not  in  sufficient  quantity  to  be  harmful. 

Professor  Gray  of  Glasgow  Technical  College  has  analyzed 
gases  found  in  the  shale  mines.  Three  samples  taken  at  a 
working  face  averaged  0.16  per  cent,  carbon  dioxide  and  0.037 
per  cent,  methane.  In  the  return  airway  ten  samples  aver- 
aged 0.158  per  cent,  carbon  dioxide  and  0.049  per  cent,  methane. 
These  quantities  are,  of  course,  too  small  to  cause  concern. 

The  dust  of  Scotch  oil  shale  is  not  explosive  and  is  non- 
flammable in  the  presence  of  mine  gas  explosion,  but  rather 
tends  to  be  a  retarder  of  gas  explosions. 

The  mining  of  oil  shale  in  Scotland  is  subject  to  the  same 
laws  that  regulate  the  mining  of  coal  in  Great  Britain,  and 
these  laws  are  rigidly  enforced.  It  is  undobutedly  due  to  the 
enforcing  of  these  laws  that  so  few  accidents  have  occurred 
in  Scotch  shale  mining. 

Drilling  Machines  for  Shale 

I  would  call  attention  to  the  use  of  hand  drills  in  Scotch 
mines.  It  would  seem  that  power  drills  can  and  will  be  used 
to  advantage  in  American  shale  workings.  Some  believe  that 
precussion  drills  will  not  be  satisfactory  in  mining  shale  on 
account  of  its  toughness,  but  no  doubt  coal-drilling  augers  of 
various  types  should  be  satisfactory.  Other  modern  mining 
methods  will  undoubtedly  be  applied  to  American  shale  mines. 
Already  I  have  had  called  to  my  attention  two  or  three  pro- 
posed new  types  of  undercutters  and  breaking-down  machines, 
especially  designed  for  working  oil  shale.  Mechanical  shov- 
ellers and  car  loaders  will  undoubtedly  be  used.  In  place  of 


MINING  OIL-SHALE  r>03 

using  black  powder,  the  American  oil-shale  miner  will  prob- 
ably use  some  of  the  lo'w-grade  ammonia  dynamites,  or  other 
slow  powders.  American  shale,  as  a  rule,  it  would  seem,  can 
be  shot  harder  than  Scotch  shale,  particularly  as  it  is  less 
brittle  than  the  latter.  In  general,  it  is  to  be  expected  that 
every  effort  will  be  made  to  cheapen  operations  by  the  use  of 
modern  methods,  many  of  which,  however,  cannot  be  economi- 
cally applied  except  on  large  scale  operations. 

The  output  of  shale  per  man  in  Scotland  seems  very  low 
compared  with  the  output  of  coal  per  man  in  America.  It  is 
generally  recognized,  of  course,  that  the  American  miner  is 
the  best  in  the  world,  and  the  American  coal  miner  produces 
much  more  coal  than  the  average  British  miner.  In  the  case 
of  shale  in  this  country,  conditions  are  much  more  favorable 
for  cheap  mining  than  they  are  in  Scotland,  in  as  far  as  the 
shale  itself  is  concerned.  The  Scotch  shale  seams  are  com- 
paratively thin,  extensively  folded  and  faulted  to  a  consider- 
able extent.  Most  of  the  shales  in  this  country  lie  practically 
horizontal  and  evidently  are  not  faulted  or  contorted  to  more 
than  a  minor  extent.  All  of  this  makes  for  cheaper  mining 
and  the  application  of  modern  mining  methods  should  tend  to 
reduce  costs  still  more.  On  the  other  hand,  the  cost  of  mine 
labor  in  this  country  will  undoubtedly  be  somewhat  greater 
than  the  similar  cost  in  Scotland. 

Eventual  Labor  Required  for  Shale  Mines 

The  question  of  securing  mine  labor  is  a  problem  that  must 
be  given  consideration.  From  every  indication  the  oil  shale 
industry  is  ultimately  going  to  be  one  of  great  extent  and 
importance.  It  has  been  calculated  that  in  order  to  replace 
the  crude  oil  produced  in  this  country  with  shale  oil,  there  will 
have  to  be  mined  half  as  much  shale  per  year  as  the  amount  of 
coal  extracted  annually.  Of  course,  no  one  expects  the  Ameri- 
can shale-oil  industry  to  replace  petroleum  over  night.  It  will 
gradually  grow  from  comparatively  small  scale  developments, 
but  ultimately  the  industry  will  be  such  that  the  labor  neces- 
sary will  be  comparable  with  that  required  in  our  coal  mining 
industry.  This  labor  will  be  secured,  housed,  fed  and  nego- 
tiated with,  probably  through  the  same  types  of  organizations 
as  are  now  employed  by  our  coal  miners.  In  most  cases  this 
labor  wiil  be  obtained  from  districts  remote  from  the  shale 


504  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

fields  and  they  will  have  to  be  housed  near  the  mines  in  a 
region  generally  sparsely  populated.  When  the  shale  industry 
reaches  one  of  national  importance,  there  will  be  many  small 
cities  scattered  through  the  shale  districts  for  the  housing  of 
labor  employed  in  the  mines  and  retorting  works. 

It  has  been  common  to  assume  that  there  is  no  danger  of 
encountering  explosive  gases  in  shale  mines.  As  long  as  the 
Scotch  mines  have  been  well  ventilated,  as  I  have  mentioned, 
there  has  been  no  difficulty  on  account  of  gas — likewise  no 
trouble  has  been  experienced  on  this  account  in  the  Australian 
shale  mines,  many  of  which  yield  shales  much  richer  [up  to 
100  gal.  per  ton]  than  those  so  far  noted  in  this  country. 

It  would  not  be  safe,  however,  to  assume  that  because  gas 
has  not  been  found  in  dangerous  quantities  in  working  shales 
in  foreign  countries  that  it  will  not  be  found  in  working 
American  shales.  In  the  first  workings,  at  least,  care  should 
be  taken  to  provide  the  same  precautions  against  gas  as  are 
provided  in  coal  mines.  This  would  seem  to  be  especially 
pertinent  in  view  of  the  fact  that  gas  seepage  near  the  shale 
deposits  are  not  at  all  uncommon. 

As  to  the  explosibility  of  shale  dust,  I  am  able  briefly  to 
report  on  tests  made  at  the  Pittsburgh  laboratories  of  the 
Bureau  of  Mines.  A  sample  of  Colorado  shale,  which  con- 
tained 0.35%  moisture,  37.27%  volatile  and  fixed  carbon,  and 
62.38%  ash  was  received  at  the  Pittsburgh  station  and  pulver- 
ized to  approximately  200  mesh.  This  sample,  according  to 
our  investigations,  would  probably  yield  about  38  gallons  of  oil 
to  the  ton.  It  was  tested  in  the  regular  horizontal  dust  explo- 
sion gallery.  The  conclusions  of  the  experiments  indicate  that 
the  oil  shale  cannot  be  considered  as  a  highly  flammable  dust. 
The  dust  will  probably  not  be  ignited  by  the  flame  from  an 
ordinary  blown-out  shot,  but  is  fully  capable  of  propagating 
an  explosion  once  started.  It  would  be  interesting  to  have 
similar  tests  made  with  richer  shales,  and  it  is  my  purpose  to 
have  such  work  done  at  as  early  a  date  as  possible. 

Shales  in  the  Eastern  States 

In  considering  the  rich  and  enormous  shale  deposits  of 
the  West,  it  will  not  do  to  neglect  consideration  of  the  lower 
grade  black  shales  of  the  Eastern  States  particularly  Missouri, 
Illinois,  Kentucky  and  Ohio.  While  these  shales  apparently 


MINING   OIL-SHALE  505 

are  very  much  poorer  in  qualtiy  than  much  of  the  shale  in  the 
West,  a  great  part  of  them  Qan  be  mined  by  stripping  or  quar- 
rying operations,  which,  by  reducing  cost  of  mining,  may 
make  them  nearly,  if  not  quite,  the  equal  of  some  of  the 
Western  shales.  The  Bureau  of  Mines  is  paying  considerable 
attention  to  the  shales  of  the  Eastern  States.  Other  conditions 
than  the  relative  ease  of  mining  some  of  the  Eastern  shales 
tend  to  offset  their  low'oil  yield.  Many  of  the  Eastern  shale 
deposits  are  situated  in  densely -populated  regions,  well  pro- 
vided with  transportation,  close  to  a  market  and  also  well 
provided  with  labor. 

In  concluding,  I  wish  to  quote  from  "The  Kerosene  Shale 
Deposits  of  New  South  Wales,"  by  J.  E.  Carne,  regarding  the 
mining  of  the  very  rich  Australian  shales,  not  because  I  be- 
lieve the  conditions  at  all  comparable  with  those  in  this 
country,  but  because  I  believe  you  will  all  find  it  a  very  inter- 
esting condition  of  affairs: 

Shales  in  Australia 

"Both  "longwall"  and  "pillar  and  stall"  systems  of  extraction 
have  been  adopted;  in  the  latter  the  pillars  are  subsequently 
removed.  In  the  present  working  mines — Genowlan  and  New 
Hartley — the  workings  are  on  the  "longwall"  system.  Here 
explosives  are  unnecessary  for  breaking  down  the  seam;  on 
the  contrary,  great  danger  is  experienced  from  the  continuous 
cracking  and  shooting  of  the  kerosene  shale  as  the  roof  settles 
on  the  face.  The  unyielding  nature  of  the  top-holing,  which 
consists  of  a  band  of  hard  cannel  forming  the  top  of  the  shale 
seam,  affords  no  relief  to  the  vertical  pressure.  Where  soft 
bituminous  coal  forms  the  roof,  it  gives  or  crushes  under 
stress,  and  thus,  to  some  extent,  relieves  the  enormous  pres- 
sure of  the  superincumbent  coal  measures  and  overlying 
Hawkesbury  Series  on  the  tough,  semi-elastic  kerosene  shale. 
Where  lateral  expansion  is  rendered  possible  by  open  spaces, 
i.  e.,  working-faces,  the  tension  is  so  great  that  cracking  and 
shooting  are  almost  continuous  as  settling  proceeds.  Further 
release  by  holing  is  therefore  attended  with  considerable  risks 
to  the  miners  who  are  compelled  to  work  behind  breast-boards 
and  cover  their  eyes  with  wire-gauze  guards  as  protection 
against  flying  fragments  of  keen-edged  shale.  The  tendency 
of  kerosene  shale  to  conchoidal  fracturing  under  stress  at 


506  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

right  angles  to  the  stratification  increases  the  development  of 
sharp  edges,  which  cut  like  knives.  Numerous  accidents  have 
resulted,  some  unfortunately  attended  with  serious  impair- 
ment of  sight. 

Similar  phenomena  have  been  noted  by  Mr.  E.  C.  Andrews, 
geological  surveyor,  in  connection  with  the  "kicking"  or  "spit- 
ting" slate  of  the  Baker's  Creek  Proprietary  gold  mine  at 
Hillgrove,  where  an  unfortunate  miner  was  cut  in  two  by  a 
large  flying  fragment  which  had  previously  passed  through  a 
3x2-inch  scantling.  The  slightest  disturbance  of  the  apparent 
equilibrium  between  compression  and  expansion,  caused  by 
drill  or  hammer,  in  this  instance,  also  caused  sharp-edged 
conchoidal  fragments  to  fly  off  with  extreme  violence. 

At  Joadja,  where  the  overburden  is  greatly  less,  and  where 
also  in  the  early  workings  soft  bituminous  coal  formed  both 
top  and  bottom  holing,  the  tension  of  the  face  was  so  slight 
that  no  trouble  was  experienced  from  "shooting."  In  the 
present  workings  under  heavier  cover,  with  the  pressure  unre- 
lieved by  a  yielding  coal  medium  on  roof  or  floor,  a  tendency 
to  "shoot"  is  being  manifested.  Explosives  (gelignite)  are 
used  for  breaking-down,  as  it  is  also  used  at  Genowlan, 
together  with  compressed  powder  for  "brushing"  or  deepening 
the  roadways,  the  latter  being  used  in  the  New  Hartley 
workings. 

None  of  .the  kerosene  shale  workings  have  been  troubled 
with  fire-damp,  naked  lights  always  being  used,  in  which  par- 
affin wax  or  heavy  oil  is  burned.  Scotch  shale-mining  is  simi- 
larly free  from  natural  gases  Ventilation  in  all  cases  is  by 
air-shafts  and  furnaces." 

From  the  oil  shales  of  the  United  States  we  receive  the  com- 
forting assurance  that  the  nation  has  a  domestic  source  of 
hydrocarbon  oils  and  thus  will  not  be  dependent  on  foreign 
sources  of  supply  for  a  product  of  such  great  economic  import- 
ance as  petroleum.  The  sooner  the  oil-shale  industry  becomes 
commercial,  the  better,  but  it  does  not  seem  possible  that  it 
can  be  developed  rapidly  enough  to  have  an  appreciable  effect 
on  the  present  acute  petroleum  situation. 


MINING   OIL-SHALE  507 

MINING  OIL-SHALE 
By  HORACE  F.  LUNT,  State  Commissioner  of  Mines,  Denver,  Col. 

I  hope  none  of  you  expect  me  to  tell  you  how  to  mine  Colo- 
rado oil  shale ;  if  you  do  I  must  disappoint  you.  All  I  can  do 
is  to  try  to  outline  the  problems  that  are  likely  to  be  met  and 
their  possible  solutions. 

Extent  of  Shale  Mining  in  Colorado 

It  is  true  that  oil  shales  have  been  and  are  being  successfully 
mined  in  Scotland  and  elsewhere,  but  the  physical  qualities  of 
the  shale,  the  manner  in  which  they  occur,  and  the  general 
conditions  are  sufficiently  different  to  make  it  impossible  to 
rely  on  them  for  definite  data  by  which  to  guide  our  embryo 
Colorado  industry.  The  only  mining  work  in  our  shale  fields 
thus  far  has  been  digging  assessment  holes  and  gophering  out 
a  few  hundred  tons  here  and  there.  As  yet  no  one  in  Colorado 
has  really  started  to  develop  a  mine,  and  until  systematic 
mining  is  actually  started  we  can  only  rely  on  experience 
drawn  from  other  more  or  less  similar  forms  of  mining. 

Practically  everyone  capable  of  judging  intelligently  who 
has  investigated  the  possibilities  of  the  commercial  utilization 
of  our  oil  shales  is  convinced  that  to  make  the  operation  profit- 
able, it  will  have  to  be  conducted  on  a  fairly  large  scale,  say  at 
the  rate  of  1000  tons  or  more  per  day. 

If  there  were  only  one  stratum  of  oil  shale  it  would  be  com- 
paratively easy  to  figure  out  how  it  could  best  be  attacked. 
As  it  is,  the  Green  River  formation  extends  for  hundreds  of 
feet  vertically  with  strata  of  oil  shale  varying  in  thickness 
from  a  few  inches  to  scores  of  feet  scattered  all  through  it. 
Their  dip  is.  only  a  few  feet  to  the  mile.  Present  information 
is  not  sufficient  to  enable  us  to  say  how  much  oil  the  shale  must 
yield  to  make  it  workable,  and  data  as  to  the  exact  content  of 
the  various  strata  is  far  from  complete.  Mining  may  be 
started  on  a  6-foot  stratum  or  on  a  series  of  strata  50  or  60 
feet  thick.  Obviously,  the  methods  that  would  be  used  for 
mining  a  deposit  8  or  10  feet  thick  would  not  be  suitable  for 
one  of  50  feet.  Under  the  circumstances  any  discussion  of 


508  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

mining  methods  must  be  based  on  a  more  or  less  uncertain 
assumption. 

There  has  been  considerable  talk  about  mining  Colorado 
oil  shale  with  steam  shovels,  but  the  best  information  at  pres- 
ent available  seems  to  indicate  that  any  deposits  which  can  be 
so  mined  are  too  inaccessible  to  make  it  probable  that  they  will 
be  exploited  in  the  early  days  of  the  industry.  Consequently, 
I  feel  reasonably  safe  in  assuming  that,  in  the  beginning, 
underground  methods  will  be  used.  I  also  believe  it  unlikely 
that  the  first  operations  will  extract  deposits  more  than  8  or 
10  feet  thick.  The  richer  shales  will  naturally  be  worked  first, 
and  to  mine  the  thicker  beds  would  mean,  almost  certainly, 
that  lower-grade  material  would  be  obtained.  This  points  to1 
the  use  of  coal  mining  methods.  As  the  shale  will  have  to  be 
crushed  before  going  to  the  retorts,  there  will  be  no  reason  for 
following  the  under-cutting  methods  usually  practiced  in  min- 
ing coal ;  it  will  be  "shot  off  the  solid,"  to  use  the  coal  mining 
term. 

Little  Timber  Required 

The  oil  shales,  as  well  as  the  other  Green  River  shales,  are 
strong  rocks  which  will  stand  well  in  mine  workings,  so  that 
a  minimum  amount  of  timbering  will  be  required.  The  shales 
show  no  tendency  to  swell  and  the  workings,  once  opened,  will 
probably  remain  in  good  condition  indefinitely.  This  quality 
precludes  the  use  of  longwall  and  suggests  room-and-pillar 
methods.  The  great  area  of  the  deposits  will  obviate  the 
necessity  of  pulling  the  pillars  in  the  early  stages  of  the  opera- 
tions ;  they  can  be  left  to  preserve  the  workings  until  experi- 
ence shows  how  far  this  is  necessary  or  desirable. 

As  the  shale  beds  are  practically  flat,  there  will  be  no  natural 
air  currents  through  them  and  artificial  ventilation  will  be 
necessary.  Here  again  we  have  a  similarity  to  coal  mining 
practice.  • 

I  can  speak  more  definitely  in  regard  to  breaking  the  oil 
shale.  Although  systematic  mining  has  not  yet  started,  the 
matter  of  drilling  and  blasting  has  been  investigated  by  a 
number  of  competent  people,  and  the  preponderance  of  opinion 
is  that  the  oil  shales  can  be  more  effectively  drilled  with  an  air 
auger  than  with  any  other  type  of  machine.  Permissible 
explosives,  which  have  a  strength  between  that  of  ordinary 


MINING   OIL-SHALE       r  509 

dynamite  and  black  powder,  have  been  found  most  suitable 
for  similar  types  of  rock  elsewhere  and  will,  doubtless,  be  used 
in  the  oil-shale  mines. 

The  subject  of  costs  is  interesting  and  important,  but  until 
commercial  operations  are  actually  under  way  authoritative 
data  will  be  unavailable.  However,  reasonably  reliable  esti- 
mates have  been  made.  These  point  to  a  total  mining  cost, 
including  equipment,  development,  operation,  repairs,  and  all 
the  overhead  expense  properly  chargeable  to  mining,  of  be- 
tween $1.50  and  $2  per  ton  on  an  operation  of  not  less  than 
1000  tons  per  day.  While  the  actual  expense  of  breaking 
would  be  little  or  no  more  in  operating  on  a  smaller  scale,  the 
overhead  per  ton  would  undoubtedly  be  greater.  Personally, 
I  believe  the  cost  will  be  nearer  $2  than  $1.50.  This,  of  course, 
refers  to  underground  mining.  It  steam-shovels  can  be  used 
the  cost  should  not  exceed  50  cents  per  ton. 

No  Gas  in  Shale 

Present  information  indicates  that  oil  shale  gives  off  no  gas, 
flammable  or  otherwise,  and  that  no  danger  may  be  anticipated 
from  that  cause.  However,  there  is  a  possible  source  of  dan- 
ger from  the  vast  quantities  of  natural  gas  known  to  exist  in 
the  underlying  formations.  It  is  quite  possible  that  there  may 
be  crevices  by  which  this  gas  can  find  its  way  into  the  oil-shale 
strata ;  if  such  a  crevice  should  be  cut  by  mine  workings,  and 
the  gas  released,  a  disastrous  explosion  would  be  almost  sure 
to  result  unless  precautions  be  taken  to  detect  the  presence  of 
flammable  gas  before  it  can  be  ignited.  Preliminary  experi- 
ments by  the  United  States  Bureau  of  Mines  indicates  that  the 
oil-shale  dust  is  not  explosive,  but  that  it  will  propagate  an 
explosion.  Further  experiments  will  be  necessary  before  the 
explosive  properties  of  the  dust  are  fully  determined.  The 
fact  that  the  oil  shale  is  easly  ignited  will  make  it  necessary 
to  guard  against  setting  it  on  fire  in  the  mines. 

Wastefulness  has  generally  been  an  unfortunate  character- 
istic of  new  mining  operations.  The  first-comers  have  taken 
what  they  could  save  and  allowed  much  material  that  might 
have  been  used  in  the  coming  years  to  be  dissipated  or  de- 
stroyed in  one  way  or  another,  when  more  forethought  might 
have  preserved  it  to  add  to  the  wealth  of  future  generations. 
Thousands  upon  thousands  of  ounces  of  gold  and  silver,  not  to 


510  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

mention  the  base  metals,  have  been  carried  down  our  streams 
in  the  form  of  what  would  now  be  considered  high-grade  tail- 
ings. Thousands  and  thousands  of  tons  of  coal  have  been 
destroyed  by  the  careless  methods  of  early-day  mining.  In 
many  cases,  in  both  coal  and  metal  mines,  the  cost  of  mining 
today  is  greatly  in  excess  of  what  it  would  be  if  these  mines 
had  been  properly  planned  and  opened  in  the  beginning. 

I  do  not  wish  to  blame  the  pioneers  for  what  they  did  in  the 
past,  but  I  do  want  to  do  all  that  I  can  to  prevent  a  repetition 
of  their  mistakes.  What  can  be  excused  in  the  past  would  be 
inexcusable  in  this  more  enlightened  age.  I  do  not  mean  to 
imply  that  we  should,  in  starting  the  Colorado  oil-shale  indus- 
try, leave  the  richer  shales  for  our  children,  but  I  hope  that  the 
possibility  of  the  future  use  of  the  poorer  shales  and  the  less 
accessible  rich  shales  will  not  be  lost  sight  of.  In  starting 
this  new  industry,  which  seems  destined  to  become  one  of  the 
greatest  in  the  State,  let  us  look  forward  and  lay  our  plans  so 
that  those  who  come  after  us  may  have  no  cause  to  find  fault 
but  rather  be  forced  to  commend  the  wisdom  and  foresight  of 
their  predecessors. 


OIL^SHALE    IN    GREAT    BRITAIN  511 

THE  OIL-SHALE  INDUSTRY  IN  SCOTLAND  AND  ENGLAND 

By  DR.  VICTOR  C.  ALDERSON,  President,  School  of  Mines,  Golden,  Col. 

Introduction 

In  Scotland,  oil  shale  is  an  established  industry,  operative 
since  1850,  and  embraces  the  mimng  of  the  shale,  the  retort- 
ing or  production  of  crude  shale  oil,  the  refining  of  the  oil  into 
its  various  commercial  products,  and  the  marketing  of  these 
products.  The  profit  on  each  ton  of  shale  mined  is  approxi- 
mately two  shillings  or,  under  normal  exchange,  50  cents.  For 
each  ton  of  shale  mined  there  is  one  employe,  i.  e.,  the  total 
number  of  employes  of  all  kinds  is  virtually  the  same  as  the 
number  of  tons  of  shale  mined  each  day.  The  oil-shale  prob- 
lem in  Scotland  embraces  the  cost  of  supplies,  cost  of  labor, 
efficiency  of  labor,  and  selling  price  of  the  marketable  prod- 
ucts ;  in  other  words,  the  margin  between  the  cost  of  produc- 
tion and  the  selling  price.  In  England,  the  problem  is  quite 
different.  There  are  no  commercial  oil-shale  plants,  as  like  in 
the  United  States,  there  are  extensive  deposits  of  oil  shale, 
rich  in  oil,  but,  unfortunately,  with  an  excess  of  sulphur,  6  to 
8  per  cent,  or  more.  This  makes  the  resulting  oil  virtually 
worthless  for  any  purpose  except  for  fuel.  For  this  reason, 
the  great  problem  before  the  oil-shale  industry  in  England  is 
a  method  of  removing  this  sulphur  from  the  shale  during  the 
process  of  retorting,  or  from  the  crude  oil,  without  spoiling 
the  oil.  Until  this  technical  problem  is  solved,  the  oil-sha^ 
deposits  of  England  are  commercially  worthless. 

Scotland 

The  Scottish  Oils,  Ltd.  is  a  consolidation  of  the  six  original 
Scottish  oil  shale  companies — the  Oakbank  Oil  Co.,  Ltd.;  the 
Pumpherston  Oil  Co.,  Ltd.;  the  Broxburn  Oil  Co.,  Ltd.; 
Young's  Paraffin  Light  and  Mineral  Oil  Works,  Ltd.:  James 
Ross  &  Company ;  Philiptown  Oil  Works,  Ltd.,  and  the  Dal- 
meny  Oil  Co.,  Ltd.  The  capital  stock  of  Scottish  Oil  consists 
of  4,000,000  shares  (par  value  £1=$5),  divided  into  1,000,000 
ordinary  (common)  shares  and  3,000,000  preference  (pre- 
ferred) 7  per  cent,  non-cumulative  shares. 


512 


PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


In  giving  the  American  equivalent  for  English  money  $5 
has  been  assumed  to  be  the  equivalent  to  the  English  pound 
sterling.  In  order  to  get  the  exact  value  the  prevailing  rate 
of  exchange  should  be  considered. 

The  Anglo-Persian  Oil,  Ltd.,  controlled  by  the  British  Gov- 
ernment, has  acquired  a  controlling  interest  in  Scottish  Oils, 
Ltd.,  and  has  agreed  to  furnish  from  January  1,  1923,  supplies 
of  crude  petroleum  in  such  quantity  as  may  be  needed,  in  addi- 
tion to  the  crude  shale  oil  produced,  to  keep  the  present 
refineries  of  Scottish  Oils  running  at  full  capacity.  Of  the 
six  constituent  companies  in  Scottish  Oils,  the  Broxburn  and 
Youngs  are  engaged  in  mining,  retorting,  refining,  candle 
making,  and  the  manufacture  of  sulphuric  acid ;  Oakbank  and 
Pumpherston  are  engaged  in  mining,  retorting  and  refining. 
James  Ross  &  Company  and  Dalmeny  are  limited  to  mining 
and  retorting. 


Statistics  for  1915,  1916,  1917,  1918 


Employes. 
Underground    . . . 
Above  ground . . 


1915. 

3,856 

702 


1916 
3,821 

702 


1917. 

4,582 

742 


1918. 

4,153 

767 


Total, 


Total  production 
(long  tons) 

Average  price  re- 
ceived per  ton. 

Total  value  of  an- 
nual product.. . 


4,558 

2,992,676 

$1.39 


4,523 


3,009,232 


$1.71 


5,027 


3,116,529 


$2.05 


4,920 
3,000,317 

$2.47 


$4,176,000  $5,161,470          $6,395,000  $7,640,390 

In  1919  the  total  production  of  crude  shale  was  2,758,555 
long  tons. 

1915.   1916.   1917.   1918. 

Average  yield  of  crude  oil  (in  gallons)...     20        20        20        20 
Ammonium  sulphate  (in  pounds) 44        44        40        40 


Dividends  Paid  (fiscal  years) : 


Pumpherston: 


1914-' 15.    1915-'16.    1916-'17.    1917-'18.    1918-19.    1919-'20. 

%  %  %  %  %  % 

6666 


First  preference 6  6 

Second    preference..  6  6 

Ordinary    10  25          40          40          40          60 

Oakbank: 


Preference 
Ordinary  . 


6 


6 
10 


6 
15 


6 
15 


6 
15 


6 
10 


OIL-SKALK    IN   GREAT    BRITAIN  513 

Broxburn: 


Ordinary 

7  5 

15 

1C 

IK 

IOC 

Youngs: 

Ordinary    . 

5 

a 

n 

25 

On  February  10,  1920,  the  Scottish  Oils,  Ltd.,  the  consoli- 
dation of  all  the  Scottish  oil-shale  plants,  paid  a  semi-annual 
dividend  of  3.5  per  cent,  on  its  preference  shares. 

Mining 

At  the  Westwood  pit  of  the  Oakbank  Company  shale  is  now 
being  mined  from  the  middle  Dunnet  seam  at  a  depth  of  640 
feet.  Upper  seams  were  worked  from  a  shaft  now  abandoned. 
One  large  fault  with  a  throw  of  300  feet  and  many  small 
faults  have  been  found.  A  vertical  shaft  was  opened  four 
years  ago,  after  numerous  bore  holes  had  been  put  down,  the 
exact  location  of  the  deposit  determined,  and  a  complete  plan 
of  development  mapped  out.  The  main  shaft  is  circular,  16 
feet  in  diameter,  double  compartment,  brick-walled  14  inches 
thick.  Double  cages  are  used,  with  room  for  two  cars  on  each 
deck.  From  the  bottom  of  the  shaft  four  main  drifts  are  run, 
each  12  feet  wide,  12  feet  high,  bricked  on  both  sides  and  the 
roof.  The  working  faces  are  1680  feet  from  the  shaft.  The 
main  drifts  are  large,  well  ventilated  and  lighted  by  electricity. 
The  seam  of  shale  now  being  mined  is  12  feet  thick,  on  an 
average,  and  dips  at  an  angle  of  18  degrees.  The  roof  and 
floor  are  good,  very  little  timbering  is  necessary.  Cars  of 
shale  are  drawn  by  electricity  from  near  the  face  of  the  work- 
ing to  the  main  drifts,  then  by  gravity  to  the  shaft  and  back 
to  the  working  faces.  This  entire  plan  for  moving  the  shale 
from  the  working  faces  to  the  surface  is  particularly  efficient 
and  economical,  and  was  worked  out  carefully  before  the  shaft 
was  sunk.  The  daily  production  is  640  long  tons.  The  mine 
is  so  free  from  gas  that  open  lamps  are  used.  The  mined 
shale  goes  in  freight  cars  to  the  retorting  works  at  Oakbank. 
The  method  used  in  mining  at  the  Westwood  pit  is  the  room 
and  pillar  and  retreating  system.  The  main  drifts  are  driven 
and  pillars  120  feet  square  are  left.  During  this  stage  of 
operation  from  15  to  20  per  cent,  of  the  shale  is  taken  out. 
The  extreme  boundaries  of  the  ground  to  be  mined  through 


514  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

this  shaft  are  previously  determined.  When  these  boundaries 
are  reached  the  retreating  system  is  followed  and  the  blocks 
are  taken  out.  Each  of  the  blocks,  120  feet  square,  is  divided 
by  cross  cuts  into  four  small  blocks ;  these  are  then  taken  out 
in  order.  The  loss  in  mining  is  approximately  10  per  cent. 

Gas,  Gas  Explosions  and  Accidents 

No  serious  gas  explosion  has  ever  occurred  in  any  Scottish 
shale  mine.  Large  gas  explosions  and  fires  are  virtually 
unknown.  The  laws  governing  the  operation  of  coal  mines 
apply  to  shale  mines,  and  the  same  care,  method  of  ventilation 
and  the  safety  of  workmen  that  prevail  in  coal  mines  are 
enforced  in  shale  mines.  A  fireman  makes  the  rounds  every 
morning  watching  for  fire  damp.  Reports  of  the  conditions 
of  the  mine  are  kept  and  are  inspected  regularly  by  Govern- 
ment officials.  No  gas  is  ever  found  in  the  new  workings. 
Marsh  gas  (CH4)  is  sometimes  found  in  small  pockets  in  old 
workings.  Protections  is  given  by  hanging  up  an  open  lamp. 
Occasionally  a  small  fire  may  occur  in  one  of  these  old  work- 
ings and  a  miner  may  be  slightly  burned,  but  the  fire  is  always 
local  and  easily  extinguished.  Such  gas  explosions  and  fires 
as  have  occurred  in  this  country  where  an  entire  coal  mine 
has  been  on  fire  and  completely  ruined  have  never  occurred  in 
shale  mines  of  Scotland  during  their  70  years  of  working. 
Fatal  accidents  are  also  rare.  In  the  past  three  years  only  one 
man  has  been  killed  in  the  Westwood  pit.  He  was  killed  by 
the  fall  of  shale  at  the  face. 

In  the  past  12  years,  at  the  Mid  Breich  Pit  of  the  Pumpher- 
ston  Company,  only  three  deaths  have  resulted  from  accidents. 

1.  A  man  was  killed  by  the  fall  of  shale  at  the  face. 

2.  A  careless  boy  was  wound  around  the  drum  of  an  engine. 

3.  A  careless  boy  fell  under  the  wheels  of  an  ore  car. 
During  these  12  years  only  one  man  was  burned  by  gas. 

Hours,  Wages,  Production 

At  the  Westwood  Pit  mining  is  done  in  three  shifts  of  seven 
hours  each ;  from  7  A.  M.  to  2  P.  M. ;  from  3  to  10  P.  M. ;  and 
from  11  P.  M.  to  6  A.  M.  All  mining  is  done  on  the  contract 
or  leasing  plan.  One  man  is  given  a  block  of  ground  to  work, 
i.  e.,  a  lease.  He  hires  his  own  men,  provides  all  tools,  powder 
and  supplies  of  all  kinds,  mines  the  shale,  puts  it  in  the  cars, 


OIL-SHALE   IN    GREAT    BRITAIN  515 

and  delivers  it  to  the  nearest  main  haulway.  The  company 
then  hauls  it  to  the  surface.  For  this  the  lessee  receives  from 
the  company  four  shillings  'and  seven  pence,  or  $1.14  a  ton. 
The  minimum  wages  guaranteed  to  each  miner  is  $3.12,  the 
pre-war  rate,  plus  $1.25,  the  war  bonus,  or  $4.37.  If  for  any 
reason  beyond  his  control,  like  a  thinning  of  the  seam  of  shale 
of  encountering  a  fault,  his  production  at  $1.14  a  ton  yields 
him  less  than  $4.37  a  day,4  the  company  makes  up  the  differ- 
ence. If,  however,  he  can  increase  his  production,  he  is  at 
liberty  to  increase  his  daily  wage  as  much  above  the  minimum 
as  he  pleases.  The  average  amount  of  shale  mined  per  day 
per  man  is  4.75  tons,  i.  e.,  one  miner  and  one  man  for  shoveling 
and  tramming  will,  on  the  average,  mine  9.5  tons  a  day;  two 
miners  and  one  trammer  will  produce  14.25  tons  a  day. 
Throughout  the  shale  mines  of  Scotland  the  practice  is  to  mine 
the  shale  with  hand  augurs,  first  with  a  1.75  inch  and  then 
with  a  1.5-inch  augur.  Black  powder  is  used.  The  law  does 
not  allow  an  intoxicated  man  to  work  and  forbids  the  sale  of 
liquor  about  a  coal  or  shale  mine.  Shale  miners  regard  them- 
selves as  being  on  a  higher  plane  than  coal  miners.  They  are 
a  self-respecting  class,  generally  married,  live  in  company 
houses,  "dress  up"  when  not  working,  and  generally  maintain 
a  good  method  of  living.  The  methods,  wages  and  features  of 
the  Westwood  Pit  of  the  Oakbank  Company  are  characteristic 
of  all  the  shale  mines  in  Scotland. 

The  Oil-Shale  Strata 

The  oil-shale  deposits  of  Scotland  consist  of  21  different 
strata.  The  yield  of  oil  and  ammonium  sulphate  varies  greatly 
in  these  different  seams  in  the  same  seam  at  different  locali- 
ties; also  with  the  depth  of  the  seams,  for  example  the  Tor- 
banehill  Mineral,  the  highest  in  the  series,  has  given  the 
greatest  yield  of  oil,  130  gallons  to  the  ton,  but  only  a  few 
pounds  of  ammonium  sulphate.  In  the  succeeding  strata  a 
diminution  of  oil  and  an  increase  of  ammonium  sulphate  is 
noticed  till  at  the  lowest  stratum,  Pumpherston  No.  5,  the  oil 
yield  is  only  20  gallons  to  the  ton,  but  the  ammonium  sulphate 
has  risen  to  60  pounds  to  the  ton.  Also,  the  Raeburn  stratum 
was  best  developed  in  a  very  small  area  in  the  southwestern 
part;  the  Fells  stratum  was  best  developed  in  the  western 
part  where  other  strata  gave  less  oil ;  the  Broxburn  stratum 


516  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

is  best  at  Broxburn ;  the  best  part  of  the  Dunnet  seam  is  in  the 
eastern  part  of  the  area. 

The  following  tests  of  Broxburn  shale  show  the  gradual 
decrease  in  oil  content  and  gradual  increase  of  ammonium 
sulphate  as  depth  is  reached: 


-Vertical  Depth  in  Feet- 


Near  Greatest 

Outcrop      Outcrop       438         821       912        —         965        1077    Depth 
Gallons  of  crude 

oil    31.8         29.6         30.7     24.1     25.8     24.8     22.5     17.3         13.5 

Ammonium   sul- 
phate (pounds)     9.3         10.5         10.4     15.4     11.6     13.4       9.0     16.6         17.1 

Thus,  in  a  depth  of  approximately  1200  feet,  the  oil  content 
has  decreased  from  31.8  to  13.5  gallons,  but  the  ammonium 
sulphate  produced  has  risen  from  9.3  to  17.1  pounds. 

The  Origin  and  Nature  of  Kerogen 

Prof.  Crum  Brown,  F.R.S.,  was  the  first  to  give  the  name 
"kerogen"  to  the  "carbonaceous  matter  in  shale  that  gives 
rise  to  crude  oil  in  distillation."  The  exact  nature  of  kerogen 
and  its  origin  is  a  matter  of  controversy  among  scientific  men. 
The  practical  bearing  of  a  solution  lies  in  this:  If  the  exact 
nature  of  kerogen  can  be  determined,  this  knowledge  may  have 
a  practical  bearing  on  the  best  method  of  destructive  distilla- 
tion. If  the  nature  of  kerogen  can  be  so  determined,  that  it  is 
a  foregone  conclusion  that  in  the  destructive  distillation  a 
large  amount  of  unsaturated  hydrocarbons  (80  to  90  per  cent.) 
will  always  be  formed,  then  it  is  a  useless  ta'sk  to  seek  for  a 
retort  that  will  produce  only  "20  per  cent.  If,  however,  the 
kerogen  is  shown  to  be  of  such  a  nature  that  a  large  produc- 
tion of  unsaturated  hydrocarbons  is  due  to  unscientific  meth- 
ods of  distillation,  and  not  to  the  nature  of  the  kerogen  itself, 
then  the  successful  treatment  of  shale  would  not  be  accom- 
plished until  a  retort  was  constructed  on  such  lines  as  would 
yield  crude  oil  which  contained  the  minimum  amount  of  un- 
saturated hydrocarbons. 

Organic  Theory 

In  true  oil  shale  there  is  no  crude  oil.  A  very  small  amount 
of  oil  may  be  obtained  by  such  solvents  as  carbon  disulphide, 
but  the  amount  is  so  small  as  to  be  negligible  in  determining 
the  nature  of  the  oil  shale  itself.  Since  carbon  and  hydrogen 


OIL-SHALE   IN   GREAT    BRITAIN  517 

compounds  produced  by  inorganic  reactions  are  soluble  in 
carbon  disulphide,  ether  or  similar  solvents,  it  seems  very 
probable  that  kerogen,  the  source  of  the  oil  in  shale,  since  it 
does  not  yield  to  the  usual  solvents,  must  be  of  organic  origin. 
The  organic  theory  of  the  origin  of  kerogen  assumes  that  the 
contents  of  a  shale  stratum  were  laid  down  in  lake  bottoms, 
lagoons  or  estuaries  of  the  ocean,  i.  e.,  fairly  quiet  waters.  By 
the  denudation  of  the  land  the,  clay  and  sand  would  be  de- 
posited along  with  the  remains  of  vegetal  life  from  the  land 
and  animal  life  from  the  water.  The  very  large  amount  of 
fossil  remains  found  in  the  oil  shale  supports  this  theory. 

The  Inspissation  Theory 

""E.  H.  Cunningham-Craig  takes  exception  to  the  organic 
theory.  He  is  a  geologist  of  world-wide  experience,  has  inves- 
tigated the  nature  of  kerogen  by  the  microscopic  study  of  thin 
sections,  and  has  correlated  oil  shale  strata  with  coal  seams 
and  petroleum  deposits  in  all  parts  of  the  world.  His  argu- 
ments are  chiefly  geological.  His  conclusion  is  that  an  oil- 
shale  stratum  should  be  regarded  as  the  remains  of  a  former 
oil-field;  that  oil-shale  fields  and  oil-fields  are  not  two  phe- 
nomena entirely  unrelated,  but  are  closely  associated  in  origin 
and  development;  that  kerogen  is  "not  the  mother  but  the 
daughter  of  petroleum."  American  scientific  men  and  D.  R. 
Stewart,  the  Scottish  authority  on  oil  shales,  generally  favor 
the  organic  theory,  but  the  wide  geological  observations  of 
Cunningham-Craig  and  his  keen  analytical  powers  demand 
careful  consideration  of  any  theory  he  may  propound.  The 
whole  question  is  one  of  supreme  practical  importance,  and 
much  additional  observation  and  research  are  necessary  before 
the  nature  and  origin  of  kerogen  can  be  regarded  as  accurately 
determined. 

Retorting 

The  Scotch  retort  now  in  use  is  a  double-chambered  vertical 
retort  designed  not  to  produce  the  maximum  amount  of  crude 
oil,  with  ammonium  sulphate  as  a  secondary  consideration, 
but  for  the  purpose  of  securing  the  maximum  yield  of  ammo- 
nium sulphate,  with  the  yield  of  oil  a  secondary  consideration. 
Since  most  of  the  American  oil  shale  thus  far  tested  gives  a 
high  yield  of  oil  and  a  comparatively  small  amount  of  ammo- 


518  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

mum  sulphate,  the  present  Scotch  retort  cannot  be  advan- 
tageously copied,  in  toto,  with  a  reasonable  expectation  of 
satisfactory  commercial  success.  The  older  Scotch  Henderson 
retort,  which  was  designed  primarily  for -the  production  of  oil 
is  more  likely  to  meet  the  conditions  of  American  shale  than 
the  present  type.  This  type,  with  modification,  or  some  form 
of  a  horizontal  retort  not  yet  perfected,  is  most  likely  to  be 
successful  on  our  American  shales. 

The  present  Scotch  retort  is  composed  of  two  chambers,  one 
above  the  other.  The  upper  chamber  is  made  of  cast  iron,  11 
feet  high,  2  feet  in  diameter  at  the  top  and  widened  to  2  feet 
4  inches  at  the  bottom,  so  that  the  shale  may  drop  down  with- 
out clogging.  The  lower  chamber  is  20  feet  high,  enlarged  at 
the  bottom  to  3  feet  in  diameter.  Shale  is  fed  in  at  the  top 
from  a  hopper  and  descends  gradually  by  gravitation  through 
the  retort,  and  is  removed  as  spent  shale  at  the  bottom.  Heat 
is  applied  around  the  retort  from  the  non-condensible  gases 
produced  by  the  retorting.  Generally,  enough  gas  is  produced 
from  the  shale  itself,  but  when  lean  shale  is  being  retorted, 
the  amount  of  gas  is  insufficient.  At  such  times  an  auxiliary 
coal-fired  gas  producer  is  used  to  supply  the  necessary  amount 
of  gas.  The  gas  enters  at  the  bottom  and  is  forced  to  circu- 
late around  the  retort.  Into  the  lower  chamber  exhaust  steam 
is  injected  and  a  temperature  of  about  1800°  F.  is  main- 
tained. Here  the  ammonia  is  formed  by  the  combination  of 
the  steam  and  the  nitrogen  in  the  shale.  The  oil  and  gas  are 
formed  in  the  upper  or  cast-iron  chamber  at  a  temperature 
of  about  900°  F.  Thus  the  raw  shale  enters  at  the  top,  is 
subjected  to  a  heat  of  900°  F.,  oil  and  gas  are  formed;  the 
shale  then  drops  gradually  down  through  the  retort;  in  the 
lower  chamber  it  meets  the  incoming  steam,  it  is  subjected  to 
a  heat  of  1800°  F.  and  ammonia  is  formed.  The  entire 
product,  consisting  of  ammonia,  water,  vapor,  oil  and  gas, 
sweep  upward  through  the  retort  and  pass  out  through  a 
large  pipe  to  the  condensers.  Here  the  permanent  gas  is 
drawn  off  and  goes  to  the  scrubbing  tower.  The  crude  oil  and 
water,  containing  ammonia,  flow  into  separator  tanks  where, 
by  the  difference  of  their  specific  gravity,  the  oil  and  water 
assume  different  levels  and  can  be  drawn  off  separately  for 
further  treatment.  These  retorts  are  erected  in  groups  of 
four;  a  series  of  these  groups  forms  a  bench;  the  daily  (24- 


OIL-SHALE    IN    (JKEAT    BRITAIN  519 

hour)  capacity  of  a  retort  varies  from  two  to  four  tons  of 
shale;  the  time  required  for  the  passage  of  shale  varies  with 
the  amount  of  oil  produced ;  the  richer  the  shale,  the  longer  the 
time  required ;  poorer  shale  is  retorted  in  less  time.  No  basic 
changes  have  been  made  during  the  past  25  years  in  the  type 
of  retort  now  in  use.  Improvements  made  have  been  of  a 
mechanical  nature  in  connection  with  the  feed  and  the  dis- 
charge, and  in  the  change  of  the  horizontal  section  of  the 
retort  from  a  circular  form  to'  an  elliptical  or  rectangular 
form. 

Refining 

The  products  of  retorting  and  condensation  are  as  follows : 

(a)  GAS: 

Permanent  gas  is  drawn  to  the  tower  to  be 
scrubbed  and  then  returned  to  the  retorts  to  be 
burned  in  heating  the  retorts  and  retorting  more 
shale.  In  the  scrubbing  process  in  the  tower,  crude 
naphtha  is  obtained.  This  is  treated  with  acid  and 
soda  and  distilled  to  get  motor  spirits  and  finished 
naphtha,  both  ready  for  the  market. 

(b)  CRUDE  OIL  AND  AMMONIACAL  LIQUOR: 

These  go  from  the  condenser  first  to  the  receiving 
tanks  and  are  settled — crude  oil  (c)  at  the  top  and 
ammoniacal  liquor  (d)  at  the  bottom. 

(c)  CRUDE  OIL  IN  THE  RECEIVING  TANKS: 

This  goes  to  the  refinery  and  in  the  first  stage  is 
distilled  to  get  green  oil  (e) . 

(d)  AMMONIACAL  LIQUOR: 

This  is  distilled  and  put  through  sulphuric  acid 
boxes  to  get  the  mother  liquor;  this  is  concentrated 
to  get  the  ammonium  sulphate  ready  for  the  market. 

(e)  GREEN  OIL: 

This,  in  the  second  stage,  is  distilled  and  gives: 

(f )  A  little  naphtha. 

(g)  Crude  burning  oil. 

(h)   Heavy  oil  containing  parraffin. 
(h)  HEAVY  OIL  CONTAINING  PARRAFFIN: 

This  is  frozen  and  pressed  to  get  blue  oil  (i)  and 
crude  paraffin  (j). 
(i)  BLUE  OIL: 

This  is  treated  with  acid  and  soda  and  distilled. 
The  distillate  is  fractionated  into  gas  oil,  medium  oil 
and  lubricating  oil.  The  gas  oil  is  ready  for  the 
market. 


520  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

,  The  medium  and  lubricating  oils  are  treated  with 

acid  and  soda,  are  settled,  and  are  ready  for  the 
market, 
(g)  CRUDE  BURNING  OIL: 

This  is  treated  with  acid  and  soda  and  is  distilled. 
It  gives  as  finished  products  ready  for  the  market : 

1.  Power  oil  for   internal   combustion  engines 
(gasoline,  petrol). 

2.  Lamp  oil. 

3.  Lighthouse  oil. 
(j)  CRUDE  PARAFFIN: 

This  is  run  on  the  top  of  water  in  pans  and  cooled. 
The  water  runs  off  leaving  the  paraffin.  The  doors 
of  the  sweating-house  are  closed  and  the  heat  is 
turned  on.  The  gentle  heat  sweats  off  the  excess  of 
oil  out  of  the  paraffin.  The  melted  paraffin  wax  from 
,  the  sweating-house  is  mixed  with  charcoal  and  put 
through  the  filter-press.  The  charcoal  is  separated 
from  the  paraffin.  The  paraffin  is  then  put  into  tins 
for  the  form  and  size  and  becomes  a  finished  product 
ready  for  the  market.  The  Henderson  sweating 
system  has  been  used,  without  material  change,  for 
the  past  30  years. 

The  residues  from  the  feed  boilers  (stills)  go  to  the  coking 
stills  and  run  to  dryness.  Coke  if  left.  The  heavy  portions 
of  the  distillates,  besides  coke,  are  sent  to  the  proper  part  of 
the  plant.  The  coke  is  sold  to  the  aluminum  works,  is  used  for 
fuel  in  smelting  works,  or  as  carbons  for  lighting  purposes. 
It  has  less  than  1  per  cent,  of  volatile  matter. 

Tars  from  the  acid  washings  are  neutralized  with  tars  from 
the  soda  washings  and  the  resultant  tars  are  burned  in  the 
furnaces. 

All  residues  are  sent  to  their  proper  places  in  the  plant. 
The  acid  and  soda  treatments  take  out  the  unsaturated  hydro- 
carbons and  unstable  bodies  and  improve  the  color.  There  is 
a  good  market  for  all  the  products.  The  refining  loss  is 
approximately  25  per  cent. 

General  Observations 

Very  little  has  been  published  about  the  Scottish  oil-shale 
industry  in  recent  years ;  little  that  is  new  has  been  developed ; 
standard  practice  has  been  adopted  and  followed;  the  cri- 
terion has  been  the  declaration  of  dividends ;  the  scientific  side 
has  not  been  studied  to  any  great  extent ;  the  early  days  were 


OIL-SHALE   IN   GREAT    BRITAIN  521 

the  days  of  rich  shale;  the  Henderson  retort  was  designed  to 
treat  these  rich  shales — 30  gallons  or  more.  This  retort  was 
discarded,  the  present  double-chambered  retort  adopted,  and 
shale  yielding  less  oil  was  treated,  not  because  deposits  of 
richer  shale  were  exhausted,  but  because  the  leaner  shale  was 
easier  to  retort,  gave  a  crude  oil  that  was  easier  to  refine,  pro- 
duced better  commercial  products  and  contained  more  nitro- 
gen and,  consequently,  more  ammonium  sulphate.  Thus  the 
leaner  grade  of  shale  gave  better  commercial  and  financial 
results,  i.  e.,  made  more  money.  Ammonium  sulphate  now 
brings  £22  ($110  normal  exchange)  a  ton  at  the  works  for 
home  consumption ;  for  export  it  brings  £56.  It  is  used  largely 
by  the  sugar  beet  and  cane  sugar  growers. 

The  methods  used  in  the  Scottish  laboratories  to  determine 
the  oil  and  nitrogen  content  are  simple,  but  check  closely  with 
large  scale  results. 

Oil  Content. — Two  pounds  of  broken  shale  are  placed  in  an 
iron  tube,  sealed  at  one  end,  7  feet  long  and  2  inches  in 
diameter.  The  sealed  end  is  pushed  gradually  into  an  oven. 
The  gas  and  oil  vapors  coming  out  -of  the  tube  are  simply 
caught,  weighed  and  measured  roughly. 

Nitrogen  Content. — An  iron  tube  3  feet  long  and  1  inch 
in  diameter  is  filled  with  raw  shale  and  placed  in  an  oven. 
Heat  is  applied  slowly  and  steam  is  injected.  Vapors  are 
drawn  off  and  sulphuric  acid  is  added  to  get  the  ammoinum 
sulphate. 

*  The  purpose  of  the  Anglo-Persian  Company  in  acquiring 
the  oil-shale  properties  in  Scotland  was  apparently  to  secure 
the  extensive  and  well  developed  organization,  i.  e.,  the  refin- 
eries, the  trade-marks,  the  distributing  machinery,  customers, 
technical  men,  skilled  workmen  and  the  market. 

The  Oil  Shale  of  England 

The  oil  shales  of  England  occur  as  well-marked  strata  in  the 
formation  known  as  the  Kimmeridge  clay.  This  formation 
takes  its  name  from  the  little  village  of  Kimmeridge,  in  the 
south  of  England,  two  miles  from  the  coast  line  of  the  English 
Channel,  near  which  the  formation  outcrops  and  where  it  was 
first  studied.  The  formation,  about  900  feet  thick,  has  been 
determined  by  bore  holes  and  outcrops  over  a  large  area  of 
England,  viz.:  in  Dorset,  Kent,  Sussex,  Yorkshire,  Lincoln- 


522  PROCEEDINGS   OF   AMERICAN    MINING   CONGRESS 

shire,  Norfolk,  Cambridgeshire,  Buckinghamshire  and  Wilt- 
shire. The  formation  is  not  continuous,  but  has  been  eroded 
in  many  places  before  the  overlying  Upper  Cretaceous  rocks 
were  deposited.  The  oil-shale  strata  occur  as  basins  in  the 
upper  division  of  the  formation,  notably  in  Dorset,  Norfolk, 
Lincolnshire  and  Yorkshire. 

The  Oil  Shales  of  Dorset 

The  oil  shales  at  Dorset  have  been  known  for  many  years. 
The  Kimmeridge  "coal  money*'  was  made  from  the  oil  shale 
and  was  used  as  currency  in  very  early  days,  even  before  the 
Roman  occupation  of  Britain.  Later  the  shale  was  used  as 
fuel  by  the  inhabitants  of  the  region.  It  lies  about  300  feet 
below  the  top  of  the  Kimmeridge  formation.  The  first  com- 
mercial effort  to  utilize  these  shales  was  made  in  1848  by  the 
Bituminous  Shale  Co.  The  company  continued  in  business 
for  six  years,  but  ultimately  failed.  Six  successive  attempts 
were  made  up  to  1879  to  utilize  these  shales  commercially,  but 
each  failed,  chiefly  because  of  the  large  sulphur  content. 

The  outcropping  of  the  Kimmeridge  shale  forms  a  notable 
feature  of  the  shore-line  cliffs  on  the  English  Channel  for  sev- 
eral miles  east  and  west  of  Kimmeridge  Bay,  in  a  well-defined 
anticlinal  with  some  minor  faults.  The  oil  shale  appears  in 
two  well-marked  strata,  the  Blackstone  and  Main  Bed. 

Complete  Analysis 

Kimmfcridge  Gorton 

Blackstone.  Main  Bed. 

Carbon  37.94  26.75 

Hydrogen    4.19  3.67 

Nitrogen    1.03  0.57 

Sulphur    4.51  5.57 

Oxygen  (by  difference) 3.88  2.79 

Ash    ,  48.45  60.65 


100.00  100.00 

The  specific  gravity  of  the  shale  from  the  Kimmeridge  was 
1.775;  from  the  Gorton,  1.645,  at  15.5°  C.  The  old  shaft, 
tunnel  and  bore  holes  near  Kimmeridge  have  long  been  aban- 
doned. The  present  workings  are  at  Gorton,  near  Weymouth, 
in  an  outcrop  of  the  Blackstone  seam.  Six  adits  1000  feet 
apart  are  being  driven.  Four  are  each  350  feet  long  and  two 
60  feet  long.  Here  the  Blackstone  seam  consists  of  two  strata 


OIL-SHALE   IN    GREAT    BRITAIN  523 

—3  feet  and  2  feet  6  inches  thick,  with  a  clay  stratum  2  feet 
thick  between. 

The  Oil  Shales  of  Norfolk 

The  Kimmeridge  clay  formation  in  Norfolk  county  has 
been  well  explored  by  open  cuts,  bore  holes  and  shafts  in  the 
region  south  of  King's  Lynn  and  east  of  the  Ouse.  The  oil 
shale  appears  in  two  series;  the  upper,  called  the  Smith's 
series,  and  the  lower,  the  Puny  Drain  series,  virtually  at  the 
top  of  the  Kimmeridge  clay.  An  open  cut  or  quarry  on  the 
property  of  the  English  Oilfields,  Ltd.,  shows  a  7-foot  stratum 
of  oil  shale,  wet  and  oily,  beneath  an  overburden  of  from 
13  to  30  feet  in  thickness.  The  dip  is  5  degrees  to  the  east. 
The  deposit  has  been  tested  by  pits  and  bore  holes  over  an 
area  of  two  square  miles.  A  50-foot  shaft,  6x12  feet,  has  been 
sunk  to  an  8-foot  stratum  of  oil  shale.  This  ledge  consists 
of  two  distinct  layers ;  the  upper,  or  black  shale,  3  feet  6  inches 
in  thickness ;  and  a  lower  stratum,  4  feet  6  inches  thick.  The 
roof  is  soft,  so  that  the  walls  and  roof  of  the  main  drifts  need 
to  be  bricked. 

English  Oilfields,  Ltd. 

The  English  Oilfields,  Ltd.  is  the  largest  oil-shale  company 
in  the  Norfolk  district.  It  owns,  or  controls  by  long  lease,  60 
square  miles  of  territory:  It  is  capitalized  at  £1,500,000 
($7,500,000)  in  shares  of  one  pound  sterling  each.  The  com- 
pany is  making  extensive  improvements  on  its  property, 
consisting  of  a  branch  from  the  main  line  of  the  Great  Eastern 
Railway  to  its  property;  houses  for  workmen;  retorts,  con- 
densers, scrubbers,  refinery  shops  and  by-product  plant,  with 
the  intention  of  establishing  a  plant  complete  in  all  details. 
Besides  it  has  erected  and  tested  several  retorts  for  the  dis- 
tillation of  its  shale. 

The  Removal  of  Sulphur  From  Oil  Shale 

Fortunately  for  the  oil-shale  industry  in  the  United  States, 
sulphur  in  the  oil  shale  here  has  not  yet  been  found  in  quan- 
tity to  be  detrimental  to  the  oil  produced.  Also  there  is  little 
or  no  sulphur  in  the  Scottish  shale.  But  in  England  the  known 
beds  of  oil  shale  all  carry  so  much  sulphur  as  to  make  the  oil 
unmarketable  except  for  fuel.  During  the  war,  the  British 


524  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

Admiralty  raised  the  allowable  limit  of  sulphur  in  oil  to  3 
per  cent.,  but  paid  a  low  price  for  any  above  2  per  cent.  The 
one  great  obstacle  standing  in  the  way  of  the  development  of 
the  oil-shale  industry  in  England  is  the  desulphurization  of  the 
shale  without  spoiling  the  oil.  Logically,  there  are  three 
methods  of  attack : 

a.  During  the  retorting  of  the  shale  an  attempt  may  be 
made  to  remove  the  sulphur  by   such  agents   as  lime  and 
caustic  soda. 

b.  As  soon  as  the  oil  vapors  and  gas  are  evolved,  and 
before  condensation,  they  may  be  passed  over  desulphurizing 
agents. 

c.  After  the  vapors  have  been  condensed  the  oil  may  be 
desulphurized  by  some  chemical  means. 

Many  patents  have  been  taken  out  to  cover  processes,  and 
many  individuals  claim  to  have  a  solution ;  yet  no  process  has 
yet  appeared  that  satisfies  commercial  and  industrial  require- 
ments. During  the  Great  War  the  need  of  a  domestic  supply 
of  oil  was  felt  so  keenly  by  the  British  Government  that  it 
investigated  every  possible  source  of  supply.  In  the  case  of 
oil  shale  the  presence  of  an  excess  of  sulphur  stood  as  an  insur- 
mountable obstacle.  It  remains  the  great  unsolved  problem 
before  the  technical  men  of  Great  Britain.  When  its  solution 
comes,  as  it  probably  will  some  day,  great  quantities  of  oil 
shale  in  the  Kimmeridge  formation  now  commercially  value- 
less, will  become  a  source  of  great  wealth  to  the  British 
Empire  and  of  economic  importance  in  supplying  an  additional 
domestic  supply  of  oil. 

Besides  the  technical  point  of  view,  it  is  to  be  observed  that 
in  an  utilitarian  age  like  the  present,  the  aesthetic  objection 
to  the  odor  of  sulphur-bearing  oil  may  have  to  be  ignored 
because  of  grim  industrial  necessity.  Also  sulphur-bearing 
oils  may  have  to  be  mixed  with  non-sulphur-bearing  oils  to 
reduce  the  average  percentage  of  sulphur  below  the  objection- 
able point.  However,  the  only  solution  that  will  be  perma- 
nently satisfactory  will  be  the  production  of  sulphur-free  oil. 

Sulphur  occurs  in  shale  oil  and  petroleum  in  the  form  of 
organic  and  inorganic  compounds,  and  even  as  free  sulphur 
dissolved  in  the  oil.  The  sulphur  in  inorganic  compounds  may 
usually  be  removed  without  much  difficulty,  either  in  the  pro- 
cess of  distillation,  or  by  treatment  of  the  distillate.  Some 


OIL-SHALE   IN   GREAT    BRITAIN  525 

organic  compounds  of  sulphur  are  more  or  less  decomposed 
by  distillation,  so  that  a  part  removal  of  the  sulphur  is 
easily  effected;  but  the  complete  elimination  of  organic  sul- 
phur from  an  oil  may  prove  very  difficult  commercially,  and, 
in  fact,  a  perfectly  satisfactory  solution  of  the  problem  has 
probably  not  yet  been  found.  The  exact  conditions  or  combi- 
nations in  which  the  sulphur  exists,  which  are  not  definitely 
known,  and  which  may  vary  in  different  oils,  add  to  the  diffi- 
culties of  the  case.  Many  methods  have  been  proposed  for 
the  elimination  of  sulphur  and  some  have  proved  successful 
with  certain  oils.  Unsaturated  organic  compounds  containing 
sulphur  can  be  removed  with  sulphuric  acid,  but  ordinary 
sulphur-free  unsaturated  compounds  are  more  easily  attacked 
and  therefore,  if  the  oil  contains  a  large  percentage  of  the 
latter,  the  process  becomes  too  expensive.  Also,  it  is  possible 
for  sulphur  to  be  actually  added  in  the  process  by  the  forma- 
tion of  sulphonic  acids.  Liquid  sulphurous  acid  has  been  used 
in  the  Edeleano  process  to  remove  sulphur.  It  combines  with 
the  unsaturated  sulphur  compounds  and  settles  out  of  the  oil. 
But  not  all  qf  the  sulphur  is  necessarily  in  combination  with 
unsaturated  compounds.  Metallic  oxides,  such  as  cupric 
oxide,  have  been  employed  to  combine  with  and  eliminate  sul- 
phur. This  is  done,  either  by  bringing  the  hot  vapors  of 
distillation  in  contact  with  the  oxide,  or  agitation  of  the  latter 
with  the  hot  oil.  The  above  and  other  methods  are  employed 
with  more  or  less  success  according  to  the  nature  of  the  oil, 
but  the  problem  as  a  whole  is  apparently  still  unsolved. 
Among  the  forms  in  which  sulphur  has  been  found  in  shale  oil 
or  petroleum  may  be  mentioned  free  sulphur,  hydrogen  sul- 
phide, thiophanes,  alkyl  sulphides,  mercaptans  (in  Baku  oil), 
carbon  disulphide,  alkyl  compounds  of  carbon  disulphide. 

Investigations  By  the  British  Government 

On  account  of  the  shortage  of  petroleum  and  its  products 
during  the  Great  War,  especially  fuel  oil  for  the  Admiralty, 
the  British  Government  directed  its  attention  to  the  possible 
production  of  petroleum  from  home  supplies,  i.  e.,  from  Scot- 
land and  England  alone.  First  of  all,  efforts  were  made  to 
increase  production  from  the  known  deposits  of  oil  shale  in 
Scotland  by  speeding  up  the  mining  of  the  raw  shale,  by  using 
to  full  capacity  the  retort  in  use,  and  by  putting  in  use  older 


520  PROCEEDINGS   OF   AMERICAN   MINING"  CONGRESS 

retorts  that  had  been  lying  idle.  By  these  efforts  the  output 
was  increased  but  not  to  a  degree  sufficient  to  meet  the  press- 
ing needs. 

Investigations  were  then  carried  on  with  the  deposits  of  oil 
shale  that  were  known  to  exist  in  Dorsetshire,  Norfolk  and 
elsewhere;  but  on  investigation  these  shales  were  found  to 
produce  an  oil  to  high  in  sulphur  for  Admiralty  purposes,  and 
various  retorts  and  processes  were  tried  in  order  to  produce 
a  suitable  oil  from  these  shales  and  an  oil  which  was  free 
from  sulphur.  In  1917  the  Inter-departmental  Committee  car- 
ried out  experiments  with  the  Del  Monte  retort,  a  low  tem- 
perature distillation  process,  on  the  Kimmeridge  shales  which 
gave  an  output  of  45  gallons  a  ton,  but  carried  6.67  per  cent, 
of  sulphur.  An  endeavor  was  then  made  to  find  a  process  for 
eliminating  this  sulphur,  and  from  June  to  October,  1917, 
experiments  were  carried  on  and  investigated  by  a  process 
invented  by  Heyl  which  failed  to  produce  the  results  obtained 
by  the  inventor.  Other  processes  examined  were  Burnet's 
process  for  desulphurizing  the  oil  obtained  from  the  Norfolk 
shales.  Still  other  processes  investigated  were  Tozer's  system 
for  producing  oil  by  low  temperature,  vacuum  process  distilla- 
tion, the  S.  0.  S.  system,  the  Maclaurin  system  and  the  Lamp- 
lough  process.  Oil  shales  from  other  parts  of  the  country 
were  also  investigated,  namely,  at  Anglesey,  Skipton  in  York- 
shire and  other  places.  Having  failed  to  find  any  satisfactory 
process  for  eliminating  the  sulphur,  attention  was  directed  to 
the  cannel  coal  and  torbanehill  which  were  known  to  exist  in 
various  parts  of  the  country,  and  which  were  capable  of  pro- 
ducing a  high  percentage  of  oil. 

General  Observations 

The  English  oil-shale  deposits  are  essentially  different  from 
those  investigated  elsewhere  and  present  specialized  problems 
of  desulphurization,  retorting  and  refining.  They  are  par- 
ticularly characterized  by 

a.  A  high  specific  gravity. 

b.  A   large   amount   of   olefines   and    unsaturated   hydro- 
carbons. 

c.  A  low  content  of  the  paraffin  and  napthlenic  series. 

d.  A  high  percentage  of  sulphur. 

To  those  who  foresee  a  high  price  for  the  ammonium  sul- 


OIL-SHALE    IN    GREAT    BRITAIN  527 

phate  produced  from  shale  a  note  of  warning  should  be 
sounded.  The  high  price  of,  ammonium  sulphate  obtainable 
in  Scotland  is  the  result  of  peculiar  local  and  industrial  con- 
ditions and  should  not  be  regarded  as  a  criterion  for  the 
United  States.  Here  the  synthetic  production  of  ammonium 
sulphate  has  progressed  to  such  a  point  that  its  market  price 
in  the  future  will  be  lower  than  it  has  been  in  the  past,  so  that 
a  high  price  for  ammonium  sulphate,  as  a  product  from  crude 
shale  oil,  should  not  be  counted  upon. 

Good  oil  shales  have  low  specific  gravities.  The  specific 
gravity  of  ordinary  clay  shale  varies  from  2.4  to  2.5.  The 
specific  gravity  of  oil  shale  is  seldom  more  than  2.2  and  may 
go  as  low  as  1.5.  As  a  general  rule  the  lower  the  specific 
gravity  the  richer  the  oil  content. 

The  Use  of  Steam 

ADVANTAGES  : 

1.  Increase  in  the  value  of  the  oil  (a  practical  obser- 
vation in  Scotland). 

2.  Dilution  of  the  oil  and  gas  vapors. 

3.  Increase  in  the  velocity  of  the  discharge. 

4.  Oil  and  gas  vapors  are  swept  away  from  the  hot 
zone  and  secondary  decomposition  reduced. 

5.  Increase   in   the   paraffin   products    (a  practical 
observation  in  Scotland). 

6.  Equalizes  the  temperature. 

In  the  opinion  of  the  Scotch  operators,  exhaust  steam  should 
always  be  used.  This  is  based  upon  years  of  practical  experi- 
ence rather  than  theoretical  consideration. 

DISADVANTAGES  : 

1.  One  hundred  gallons  of  water,   in  the  form  of 
steam,  are  needed  for  each  ton  of  shale  retorted. 
This  may  be  difficult  to  obtain  in  a  semi-arid 
region. 

2.  Increased  first  cost  of  installation  and  subsequent 
cost  of  condensation. 

After  a  two-months'  study  of  the  oil-shale  industry  in  Eng- 
land and  Scotland,  I  am  led  to  the  following  conclusions: 

a.  The  present  Scotch  methods  are  well  adapted  to  the 
shale  treated;  they  are  commercially  successful  and 
meet  the  local  conditions. 


528  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

b.  The  Scotch  plants  are  the  result  of  70  years  of  opera- 
tion ;  they  have  been  improved  from  time  to  time,  but 
naturally  are  not  now  so  arranged  as  to  be  highly 
efficient  from  an  operative  point  of  view ;  yet  it  would 
be  folly  to  scrap  them  and  re-build  on  more  modern 
plans. 

c.  Scotch  methods  should  not  be  slavishly  followed  in 
other  countries  unless  conditions  are  identical. 

u.  The  problem  in  Scotland  is  one  of  operating  efficiency 
— the  difference  between  cost  of  production  and  sell- 
ing price. 

e.  The  problem  in  England  is  not  yet  a  commercial  one, 
but  technical. 

f.  The  presence  of  an  excess  of  sulphur  in  all  oil-shale 
deposits  of  England  demands  that  some  effective  and 
economical  method  for  the  elimination  of  the  sulphur 
be  devised. 

g.  Where   sulphur   does   not   occur  to   an   objectionable 
amount,  as  in  the  United  States,  the  serious  problem 
is  the  design  of  an  efficient  retort. 

h.  Many  retorts  are  in  process  of  development.  At  the 
present  writing,  it  is  virtually  impossible  for  anyone 
(except  the  inventor  himself)  to  select  the  best. 

i.  In  my  judgment,  the  successful  retort  will  be  one  of 
three  types : 

1.  The  present  Scotch  type,  where  local  conditions 
are  identical  with  those  in  Scotland. 

2.  A  vertical,  modified  Scotch  type,  adapted  to  shale 
rich  in  oil,  but  low  in  nitrogen  content  or, 

3.  A  horizontal  type  which  will  be  based  on  correct 
scientific  principles  and  be  absolutely  new. 

It  is  not  impossible  that  successful  retorts  will  result  of  all 
three  types.  The  keynote  to  the  successful  extraction  of  oil 
from  shale  is  a  retort  adapted  to  the  character  of  the  shale  to 
be  treated. 


c 


WYOMING    OIL-SHALES  529 

WYOMING  OIL-SHALES 
By  G.  B.  MORGAN,  State  Geologist,   Cheyenne,  Wyo. 


529 

V 


The  oil-shale  beds  of  Wyoming,  like  those  of  Utah  and 
Colorado,  are  found  in  the  Green  River  Formation  of  Eocene 
Age.  This  formation  underlies  vast  areas  in  all  these  States 
and  in  Southwestern  Wryoming,  particularly  in  Sweet  Water, 
Lincoln  and  Uinta  counties  the  formation  underlies  approxi- 
mately 3500  square  miles  of  territory.  Outcrops  of  oil-shale 
seams  have  been  examined  by  members  of  the  United  States 
Geological  Survey  along  the  Green  River  escarpment  south  of 
the  Union  Pacific  Railroad  almost  to  the  State  line.  Beds 
sample  along  these  outcrops  average  about  five  feet  in  thick- 
ness. The  results  of  40  samples  taken  by  the  Survey  on 
weathered  surfaces  and  analyzed  show  an  average  of  15  gal- 
lons of  crude  oil  (and  6  pounds  of  ammonium  sulphate)  per 
ton  of  shale.  There  are  many  richer  deposits  in  the  shale 
area  than  those  sampled  by  the  Survey.  Assays  have  been 
received  in  my  office  showing  yields  ranging  from  23  to  60 
gallons  of  oil  per  ton,  and  the  samples  were  taken  from  beds 
15  to  60  feet  in  thickness. 

From  data  that  have  been  sent  in  to  my  office  I  believe  the 
typical  section  of  the  Green  River  shale  deposits  to  be  about 
as  follows: 

The  surface  is  sandstone,  averaging  about  100  feet  thick. 
Underlying  the  sandstone  is  a  thin  but  very  persistent  band 
of  black  waxy  shale,  which  contains  from  60  to  110  gallons  of 
oil  to  the  ton.  This  bed  runs  from  a  few  inches  to  about  five 
feet  in  thickness.  Below  the  black  seam  is  a  brown  sandy  shale 
about  12  feet  thick,  which  will  average  45  gallons  of  oil — the 
oil  being  very  high  in  gasoline.  Then  there  is  a  bed  of  mas- 
sive paper  shale  50  to  150  feet  thick,  which  contains  about 
20  gallons  of  oil  on  an  average.  Underlying  the  paper  shale 
is  a  sandstone  member  from  40  to  60  feet  thick.  This  is,  in 
turn,  underlain  by  paper  shale  from  50  to  200  feet  thick, 
which  also  contains  about  20  gallons  of  oil  to  the  ton.  The 
whole  is  underlain  by  barren  shale. 

The  above  section  is  the  result  of  work  done  for  a  distance 
of  about  20  miles  south  of  Green  River.  Lateral  variation 
of  the  formations  is  very  pronounced,  and  there  are  also  a 


530  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

number  of  faults  in  this  area.  It  was  noted  that  where  the 
outcrops  were  abrupt  the  richest  shales  were  found.  As  a 
general  rule  the  paper  shales  contained  a  zone  of  enrichment 
from  40  to  50  feet  thick  where  the  oil  content  was  a  barrel  or 
more  to  the  ton  of  shale.  Some  of  these  zones  were  massive 
shales  of  some  character  and  in  others  thin  high-grade  seams 
were  found  which  brought  the  oil  percentage  up  to  consider- 
ably more  than  one  barrel  per  ton. 

Oil  Reserves  in  Wyoming  Shale 

Owing  to  the  lack  of  data,  it  is  impossible  to  estimate  the 
tonnage  of  available  oil  shales  in  Wyoming,  and  the  probable 
yield  in  crude  oil.  It  is  estimated  by  the  .United  States  Geo- 
logical Survey  that  the  Green  River  shales  of  northwestern 
Colorado  will  produce  20,000,000,000  barrels  of  oil.  We  have 
reason  to  believe  that  similar  shales  in  Wyoming  are  capable 
of  producing  about  the  same  amount.  As  you  know  the  total 
world's  production  of  petroleum  up  to  the  present  time  is 
about  7,000,000,000  barrels  and  in  the  United  States  about 
5,000,000,000  barrels.  Probably  not  over  6,500,000,000  bar- 
rels of  oil  remain  in  the  ground  in  the  various  oil  fields 
throughout  the  United  States.  In  the  absence  of  more  relia- 
ble information,  I  think  it  may  be  assumed  that  the  oil  shales 
of  Colorado,  Utah,  Nevada  and  Wyoming  are  capable  of  pro- 
ducing 50,000,000,000  barrels  of  crude  oil. 

It  is  a  well-known  fact  that  the  consumption  of  petroleum 
is  increasing  far  more  rapidly  than  domestic  production.  At 
the  present  rate  of  consumption,  and  this  rate  is  increasing 
every  year,  our  pools  will  be  practically  exhausted  in  about 
20  years.  Therefore,  the  future  of  the  oil-shale  industry  is 
assured. 

Oil  distillation  from  shales  is  now  passing  through  the 
experimental  stage,  and  owing  to  the  increasing  demand  for 
gasoline,  lubricants  and  fuel  oil,  it  will  be  matter  of  only 
a  comparatively  short  time  until  shale-oil  plants  will  be  opera- 
ating  in  Colorado,  Utah  and  Wyoming.  Shale-oil  extraction 
is  to  a  great  extent  a  mining  and  metallurgical  problem, 
and  is  a  matter  of  figuring  plant  and  operating  costs  against 
the  market  price  of  oil  and  by-products,  including  gas,  which 
is  used  as  a  fuel  in  the  retorts.  There  is  not  the  element  of 
risk  in  this  industry  as  in  prospecting  for  oil  in  unproven 


WYOMING    OIL-SHALES  531 

fields,  although  the  capital  involved  may  be  much  larger. 
Given  a  practicable  and  workable  plant  for  distillation  one  is 
able  to  calculate  with  a  considerable  degree  of  accuracy  the 
cost  of  mining  and  treatment  added  to  the  original  cost  of  the 
plant  and  also  the  amount  of  oil  and  by-products  that  can  be 
extracted  from  a  known  deposit  of  shale,  the  contents  of  which 
have  been  carefully  sampled  and  tested.  It  is  also  a  simple 
matter  to  calculate  the  available  tonnage  of  workable  shale  in 
a  given  area,  especially  if  diamond  core  drills  are  used  to  sam- 
ple the  underlying  beds.  Thus,  it  seems  possible  to  forecast 
unusually  well  just  what  to  expect  in  such  ventures,  provid- 
ing the  method  of  distillation  is  suitable  for  the  treatment  of 
the  shale  and  will  return  the  greatest  amount  of  the  most 
desirable  products. 

Shale-Oil  Will  Partly  Supplant  Petroleum 

Although  we  do  not  believe  that  shale-oil  production  will 
completely  take  the  place  of  the  dwindling  petroleum  supplies, 
yet  it  is  not  inconceivable  that  within  10  years  our  shale 
fields  will  contain  many  extraction  plants,  with  millions  of 
dollars  invested  and  employing  thousands  of  workmen.  The 
price  of  crude  oil  will  largely  govern  the  development  of  the 
shale-oil  industry.  Just  as  soon  as  that  figure  is  high  enough 
to  ensure  profitable  operation,  the  large  oil  interests  will  begin 
to  get  into  that  business,  as  they  will  be  compelled  to  in  order 
to  protect  their  great  refinery  investments,  and  to  perpetuate 
their  organizations. 

Practically  speaking  no  real  surveys  have  as  yet  been  made 
of  the  Wyoming  shale  fields,  but  we  hope  to  do  something  in 
that  line  during  the  next  year.  There  is  no  question  as  to 
the  great  extent  of  our  shale  formations  which  cover  an  area 
almost  equal  to  those  of  Utah  and  Colorado  combined.  There 
may  be  some  doubt  as  to  whether  Wyoming  shales  are  as  high 
in  oil  content  as  Colorado  shales.  As  to  accessibility,  our 
shale  deposits  lie  along  the  main  line  of  the  Union  Pacific 
Railroad,  and  workable  beds  are  found  near  Rock  Springs, 
Green  River,  Kenmerer  and  other  points.  Taking  into  con- 
sideration, therefore,  the  extent,  richness  and  accessibility  of 
Wyoming  shales,  there  is  no  question  in  my  mind  but  that 
Wyoming  will  run  Colorado  a  close  second  in  the  great  drive 
for  shale-oil  production  which  is  ahead  of  us. 


532  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

K 

THE  ASPECT  OF  THE  PETRO-SHALES  OF  THE  WESTERN 

SLOPE 

,      .    ,„  „ 

By  J.  B.  JENSDN 
Mining  Engineer  and  Oil  Shale  Specialist,  Salt  Lake  City,  Utah 

In  a  study  of  the  petro-shales  of  the  Western  Slope  I  have 
in  mind  particularly  those  which  are  included  in  Colorado, 
Utah  and  Wyoming,  and  which  comprised  the  original  deposit 
of  the  Great  Uinta  Basin  before  its  segregation,  through  up- 
heaval and  erosion,  into  the  Green  River  Basin,  the  Uinta 
Basin,  the  De  Beque  and  Soldier  Summit  fields. 

Geology 

These  shales  consist  primarily  of  argillaceous  clays,  con- 
taining the  remains  of  billions  upon  billions  of  small  plants, 
such  as  diatoms  and  the  algae  which  thrived  in  the  Eocene 
period  on  the  shores  and  bottoms  of  the  warm  quiescent  inland 
lakes  of  that  period.  They  resembled  the  green  mossy  plants 
that  we  see  at  this  time  at  the  bottom  of  stagnant  pools  during 
summer  time.  These  evidently  grew  in  great  luxuriance, 
and  together  with  numberless  fishes  and  other  animal  and 
insect  life  were  imbedded  on  the  lake  bottom  within  clays  and 
mud  sediments  brought  by  freshets  and  streams  from  sur- 
rounding mountains.  From  the  oscillating  movements  of  the 
water  and  mud  these  were  finely  mascerated  and  ground  into 
the  sediments  and  finally  became  a  part  of  them.  Occasion- 
ally great  mineral-bearing  ledges  extending  through  the  moun- 
tains were  eroded  away  and  the  sand  and  clay  from  these, 
together  with  such  gold,  silver  and  platinum  as  they  con- 
tained, also  found  their  way  into  the  lake  bottoms,  thereby 
building  up  at  times  bedding  which  were  metalliferious.  As 
all  plant  and  animal  life  contains  nitrogen  and  potash,  it  is 
natural  that  these  also  should  be  preserved  in  the  compressed 
muds  and  become  constituents  of  the  shale. 

This  building  up  of  lake  bottoms  went  on  for  ages',  until 
great  masses,  consisting  of  thin  layers  or  beddings,  perhaps 
each  representing  a  season,  were  built  to  an  aggregate  thick- 
ness of  sometimes  hundreds  of  feet.  These  great  beddings 


PETRO-SHALES    OF    THE   WESTERN    SLOPE  533 

later  on,  through  earth  upheaval,  have  themselves  become 
exposed  to  surface  erosion,  and  in  places  have  been  entirely 
uncovered,  while  great  gorges  and  river  channels  have  been 
cut  through  the  entire  formation,  leaving  the  surface  exposed 
and  showing  hundreds  of  feet  (in  vertical  thickness)  of  petro- 
shales,  which  are  capable  of  yielding  from  a  few  gallons  to  as 
high  as  100  gallons  of  high-grade  petroleum  to  the  ton. 

These  oil-yielding  shales  consist  usually  of  at'  least  two 
members,  an  upper  and  a  lower.  In  the  heart  of  the  Uinta 
Basin,  and  where  cut  by  the  channel  of  the  Green  River,  they 
show  three  distinct  members,  each  seperated  by  a  bell  rock, 
This  bell  rock  is  a  brittle,  hard  sandstone,  ranging  in  thick- 
ness from  a  few  inches  to  two  feet,  and  which  breaks  in  long 
pieces,  usually  in  an  easterly  or  westerly  direction,  and  at  a 
width  equal  to  the  thickness  of  the  bed,  thereby  taking  on  the 
appearance  of  sawed  timber.  It  has  a  peculiar  metallic  ring 
when  struck  with  a  hammer,  from  which  it  derives  its  name. 
As  we  approach  the  rim  of  what  was  once  the  great  basin,  this 
bell  rock  merges  into  thicker  and  softer  sandstone  beddings. 
This  is  notably  in  evidence  at  De  Beque,  Green  River  and  Sol- 
dier Summit.  The  members  between  the  intervening  bell 
rock  consist  of  many  measures  ranging  in  thickness  from  a 
few  inches  to  several  feet,  and  in  oil  yield  from  a  few  gallons 
to  as  high  as  90  or  100  gallons  per  ton. 

Historical 

My  first  work  in  connection  with  our  American  shales  was 
undertaken  early  in  1902,  when  an  old  Scotch  retort  man  came 
into  my  office  with  samples  of  shale  from  Tucker,  Utah,  with 
a  wonderful  story  as  to  the  possibilities  of  producing  kero- 
sene direct  from  shale  in  this  country  as  was  being  done  in 
Scotland.  Gasoline  was  then  somewhat  of  a  drug  on  the  mar- 
ket, and  had  little  value.  The  enthusiasm  of  the  old  gentle- 
man, together  with  actual  demonstration  in  a  laboratory  re- 
tort of  the  production  of  oil  from  shale,  had  its  effect  upon 
me,  and  I  entered  into  arrangements  with  him  whereby  I 
should  build  a  Scotch-type  retort  of  sufficient  size  to  demon- 
strate the  practicability  of  the  undertaking.  After  a  year's 
work  we  concluded  that  the  Scotch-type  retort  was  not  fully 
adapted  to  the  treatment  of  our  high-grade  American  shales, 
and  that  while  we  had  splendid  success  with  certain  grades, 


C34  PROCEEDINGS   OF   AMERICAN   MINING  CONGRESS 

particularly  those  ranging  around  30  or  35  gallons  per  ton 
downward,  we  had  a  great  deal  of  difficulty  when  treating 
shales  running  above  a  barrel  to  the  ton.  These  would  fre- 
quently flux  in  the  retort  and  stop  all  operations  until  the 
solid  mass  could  be  removed.  While  we  did  not  then  under- 
stand the  cause  of  fluxing,  we  have  since  discovered  and  over- 
come it. 

We  found  certain  fields,  however,  which  contain  non-fluxing 
shales,  and  which  might  be  treated  with  entire  success  by  the 
method  we  were  adopting,  but  inasmuch  as  it  was  particularly 
the  high-yielding  shales  that  we  were  desirous  of  working,  and 
which  must  necessarily  be  the  ones  selected  in  order  to  operate 
at  a  profit,  it  became  necessary  to  work  out  other  devices. 
After  a  good  deal  of  experimental  work,  lasting  between  three 
and  four  years,  this  was  accomplished  in  the  development  of 
what  has  become  the  'stage  eduction  [recovery]  process.'  The 
matter  was  then  allowed  to  lapse  on  account  of  inability  to 
interest  capital  at  that  time  in  the  industry,  and  it  was  not 
until  about  four  years  ago  when  the  serious  demand  for 
petroleum  products  began  to  take  on  an  acute  aspect  that  a 
new  retort  was  built  in  Salt  Lake  City.  Since  then  I  have 
confined  myself  to  this  work  in  oil-shale  work. 

Up  until  a  few  months  ago,  when  the  ruling  appertaining 
to  the  patenting  of  shale  lands  was  made  by  Assistant  Secre- 
tary Vogelsang,  and  concurred  in  by  Secretary  Payne,  the  out- 
look for  the  shale  industry  was  seriously  doubtful,  owing  to 
the  fact  that  no  one  could  say  whether  or  not  titles  could  be 
secured  to  the  lands.  Owners  and  investors  alike  held  aloof, 
and  were  unwilling  to  undertake  any  development  or  con- 
struction work,  and  it  is  only  within  the  last  few  months  that 
real  activity  has  been  noticeable.  During  that  time  more  has 
been  acocmplished  in  this  country  looking  to  the  early  pro- 
duction of  oils,  perhaps,  than  through  all  the  past  ages.  Large 
interests  have  secured  extensive  holdings  under  option,  and 
while  no  great  amount  of  actual  cash  has  been  paid  over,  per- 
haps, nevertheless,  nominal  first  payments  have  been  made, 
and  as  soon  as  the  buyers  can  satisfy  themselves  as  to  the 
patentability  of  the  various  claims,  payments  will,  no  doubt, 
be  completed. 


PETRO-SHALES   OF    THE    WESTERN    SLOPE  535 

Petro-Shales 

Our  Colorado-Utah  shales,  as  generally  spoken  of,  are  mis- 
understood. They  are  not  oil  shales  and  contain  no  oil,  but 
they  are  shales  which  contain  the  materials  from  which  petro- 
leum can  be  produced — not  extracted,  mind  you — but  pro- 
duced. There  are  shales,  however,  which  do  contain  petro- 
leum and  from  which  petroleum  can  be  extracted,  but  they 
are  not  the  Coolrado-Utah  shales  which  we  are  today  con- 
sidering. 

I  have  here  a  number  of  pieces  of  apparently  similar  shale. 
Here  are  two  pieces  of  true  oil  shale  which  come  from  Cali- 
fornia. These  contain  petroleum  very  much  as  our  saturated 
sands  do,  and  it  may  be  extracted  from  them.  When  one 
today  speaks  of  oil  shales,  his  hearers  naturally  think  of  this 
kind  of  shale.  Here  is  a  piece  of  shale  which  contains  no 
petroleum  and  from  which  petroleum,  therefore,  cannot  be 
extracted,  but  from  which  is  can  be  produced.  It  contains 
the  basic  elements  of  petroleum,  hydrogen  and  carbon  in  their 
primary  unretorted  condition.  This  is  a  typical  piece  of  Colo- 
rado shale  of  fairly  high  yield.  On  breaking  open  a  piece  of 
this  character  of  shale,  one  detects  a  peculiar  odor.  This 
comes  from  a  small  amount  of  gas  and  a  trace  of  petroleum, 
which  has  been  produced  from  frictional  or  other  internal 
heat  at  some  time  in  the  earth's  history,  and  has  been  con- 
fined within  the  shale  until  the  present  time.  An  intense  odor 
does  not  necessarily  indicate  a  high-yielding  shale  as  generally 
supposed,  as  some  of  our  low-grade  shales  are  much  more 
odorous  than  some  of  our  high-grade  shales.  The  intensity 
of  odor  rather  indicates  the  degree  of  temperature  that  the 
shale  has  undergone. 

Terms  Used  in  Shale  Work 

Some  years  ago,  Prof.  Crum  Brown,  possibly  guided  by  the 
fact  that  kerosene  was  then  the  most  important  oil  product 
from  the  Scotch  shales,  suggested  the  term  "kerogen"  to  ex- 
press this  carbonaceous  'matter,  and  that  term  has  been  used 
quite  generally  in  Europe  ever  since.  It  is  not  a  definite  one, 
however,  and  when  applied  to  our  American  shales,  where 
kerosene  is  of  secondary  importance,  becomes  as  misleading 
as  the  term  "oil  shale." 


536  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

In  order  to  distinguish  between  these  shales,  and  inasmuch 
also  as  the  gasoline  fraction  from  shale  oil  is  materially  dif- 
ferent and  contains  some  properties  not  contained  in  well 
gasoline,  notably  more  complete  and  rapid  combustion,  and 
from  the  fact  that  as  soon  as  our  large  shale  plants  begin 
operation,  it  will  become  necessary  to  have  a  distinguishing 
feature  between  the  gasoline  from  wells  and  the  gasoline  from 
shales,  and  in  order  to  obtain  definite  and  concise  terms  for 
use  in  my  geological  reports,  as  well  as  in  discussions  of  shale 
matters  in  general,  I  some  years  ago  coined  three  words  which 
I  have  since  used  continuously,  and  judging  from  the  most 
satisfactory  results  therefrom  it  would  be  an  opportune  time 
to  adopt  some  such  words  for  use  in  our  shale  vocabulary  in 
order  that  precise,  accurate  knowledge  might  better  be  dis- 
seminated. They  are  as  follows: 

From  the  fact  that  the  hydrogen  and  carbon  as  contained 
in  the  shales  is  the  source  of  petroleum,  I  have  taken  from 
the  word  petroleum  the  first  syllable  "petro"  and  have  added 
the  suffix  "gen,"  or  source,  to  form  the  word  "petrogen," 
meaning,  therefore,  the  source  of  petroleum  or  that  material 
which  through  destructo-constructive  distillation  produces 
petroleum  or  tar. 

To  those  shales  which  are  still  in  their  primary,  unaltered 
condition,  containing  petrogen,  but  not  petroleum,  and,  there- 
fore, are  yet  only  a  source  of  petroleum,  I  prefer  to  apply  the 
term  "petro-shales."  This  applies  in  general  to  the  shales 
of  Colorado,  Utah,  Wyoming,  New  Brunswick,  the  Devonian 
shales  of  Kentucky,  etc. 

To  those  that  were  originally  petro-shales,  but  which 
through  later  earth  heat  have  given  up  their  petrogen,  and 
then  through  absorption  have  taken  up  the  resultant  petro- 
leum, and  are  now  saturated  or  true  oil  shales,  and  to  those 
shales  which  were  originally  not  petro-shales,  but  which 
through  capillary  attraction  or  otherwise  have  taken  on  migra- 
tory oils,  and,  therefore,  also  contain  oil,  I  prefer  the  term 
"oil  shales." 

To  distinguish  the  product  from  shales  which  corresponds 
to  the  gasoline  fraction  I  add  to  the  word  "shale"  the  letters 
"ne"  to  form  the  word  "shalene,"  and  which  gives  me  the  fol- 
lowing concise  terms :  Petrogen,  petro-shales  and  shalene. 


PETRO-SHALKS    OF    THE    WESTERN    SLOPE  537 

Massive  Shale  and  Paper  Shale 

Petro-shales  are  commonly  spoken  of  as  of  two  kinds :  Mas- 
sive and  paper  shale.  There  is  primarily  no  difference  be- 
tween the  two  except  that  the  paper  shale  consists  of  much 
thinner  beddings  or  measures  than  the  massive.  Between 
each  bedding  is  a  thin  layer  of  argillaceous  material  contain- 
ing no  petrogen,  and  this,  on  weatherings,  decomposes  and 
permits  the  petroliferious  beddings  to  separate,  when  the 
exposed  edge  resembles  somewhat  sheets  of  paper  piled  on 
each  other,  and  which  suggests  the  name — paper  shale. 

We  may  illustrate  this  by  taking  a  number  of  sheets  of  tin 
and  a  number  of  sheets  of  blotting  paper,  and  after  pasting 
these  firmly  together  to  form  a  mass  an  inch  or  two  in  thick- 
ness, permit  the  edge  to  come  in  contact  with  water.  The 
blotting  paper  will  absorb  the  water  and  decompose  the  paste, 
permitting  the  sheets  of  tin,  which  are  not  affected  by  the 
water,  to  separate.  The  sheets  of  tin  correspond  to  the  non- 
permeable  sheets  of  petroliferious  material,  while  the  blotting 
paper  corresponds  to  the  argillaceous  sheets,  and  which  are 
affected  by  the  weatherings  to  a  distance  as  far  as  the  weath- 
ering can  extend  into  the  ledge.  When  a  point  beyond  this  is 
reached  the  shale  face  becomes  solid  and  has  the  appearance 
of  massive  shale,  but  under  the  magnifying  glass  shows  the 
intervening  light  and  dark-colored  laminations  first  described. 
Water  and  air  have  no  effect  on  the  petroliferious  portions, 
whether  thick  or  thin,  and  as  the  massive  shale  consists  of 
thick  beddings  it  retains  its  solid  or  massive  appearance  in  the 
ledge.  Hence  these  names — massive  and  paper  shale. 

As  a  rule,  though  not  always,  the  massive  varity  is  slightly 
higher  grade  than  the  paper  shale,  but  when  the  ledge  is  pene- 
trated beyond  the  weathering,  the  paper  shale  becomes  solid 
and  the  oil  yield  usually  increases. 

Amount  of  Oil  in  Paper  Shale 

I  have  been  endeavoring  for  many  months  to  establish  a 
factor  which  would  enable  one  to  make  a  fairly  accurate  esti- 
mate of  the  oil  yield  that  might  be  expected  in  the  average 
paper-shale  ledge  when  development  should  reach  a  point 
where  weathering  has  ceased  and  the  ledge  has  taken  on  its 
primary  condition.  Thus  far,  I  have  found  this  impractical, 


538  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

inasmuch  as  the  different  measures  in  the  same  shale  mem- 
ber are  not  frequently  different,  but  the  paper  shales  of  the 
different  shale  members  in  the  same  district  are  different. 
Also  the  corresponding  shale  member  in  the  different  locali- 
ties are  dissimilar  and  the  changes  in  yield  greatly  variable. 
The  only  safe  way,  therefore,  is  to  either  prospect  the  ground 
with  a  diamond  drill,  which  can  be  made  to  penetrate  the 
entire  series  of  shale  measures  at  a  point  where  no  weather- 
ing has  occurred,  and  when  the  log  has  been  carefully  kept 
and  tests  on  the  various  measures  have  been  made  one  will 
have  a  most  accurate  basis  on  which  to  calculate  tonnage  and 
yield.  The  next  best  mode  of  development  is  the  driving  of 
tunnels  in  the  lower  portion  of  the  shale  measure  and  sufficient 
distance  into  the  ledge  to  reach  a  point  where  accurate  deter- 
mination may  be  made  and  then  raise  through  the  various 
measures  before  sampling.  This  should  not  be  less  than  100 
feet,  and  preferably  several  hundred  feet,  especially  if  the 
ledge  contains  a  gentle  slope  and  thereby  permits  greater  pene- 
tration of  moisture  downward  through  surface  cracks  than 
in  case  of  a  precipitous  escarpment.  The  next  best  method 
is  that  of  trenching  the  surface  at  a  width  of  five  or  six  feet 
and  penetrating  the  ledge  to  such  distance  as  weathering  may 
extend.  This  is  the  cheapest  method  of  the  three  and  is  fairly 
satisfactory.  The  trench  may  be  ' 'stepped"  down  on  the 
various  measures  to  prevent  the  necessity  of  carrying  the 
lower  portions  of  the  trench  further  into  the  ledge  than  is 
necessary.  In  one  or  two  such  trenches,  I  have  found  the 
weathering  of  paper  shale  to  extend  all  the  way  from  a  foot 
or  two  to  30  feet  before  the  solid  shale  is  encountered.  Oil 
tests  on  the  various  measures  show  an  increase  ranging  from 
a  few  gallons  to  several  times  the  original  yield.  In  one 
extreme  case,  the  shale  on  the  surface  yielded  8%  gallons.  It 
was  a  loose,  light-brown,  papery  shale.  When  the  ledge  was 
penetrated  30  feet  a  yield  of  40  Vs  gallons  was  obtained.  An- 
other example  is  paper  shale,  medium  weight,  original  assay 
40  gallons  in  10  feet,  52  gallons  another  example ;  paper  shale 
20!/2  gallons,  solid  shale  30  gallons.  It  will  be  seen  from  this 
that  while  we  may  always  expect  an  increase  in  yield,  it  is 
impossible  to  estimate  what  this  may  be,  and  in  calculating 
yield,  it  becomes  necessary  before  endeavoring  to  estimate, 


PETRO-SHALES   OF    THE   WESTERN    SLOPE  539 

to  do  enough  work  to  determine  with  reasonable  accuracy  the 
change  that  will  take  place  on4hat  particular  bedding. 

In  the  massive  shale  a  fairly  good  guide  is  that  the  lighter 
in  weight  the  shale  the  greater  the  yield.  It  is  practically 
impossible  for  the  heavy,  close-grained  silicious  type  of  shale 
to  yield  more  than  a  small  quantity  of  petroleum.  That  which 
is  capable  of  a  high  yield  leaves  a  light  porous  or  honey- 
comb ash,  which  frequently  will  float  on  water.  The  ash  from 
the  lower  grade  shales  will  not  do  this. 

The  color  of  massive  shale  will  vary  from  a  light  brown  to 
coal  black.  The  higher  grades  usually  are  of  a  dark  brown 
color  with  a  light  brown,  waxy  streak  and  without  grit.  The 
fresh  fracture  has  a  smooth  feel  to  the  touch ;  the  lower  grade 
shales  have  a  cat-tongue  feel  to  the  touch.  The  older  the 
shales  geologically  the  lower  the  oil  yield  and  the  higher  the 
ammonium  yield.  Our  American  shales  are,  therefore, 
younger  than  those  of  Scotland. 

Destructive  Distillation 

But  what  of  destructive  distillation  that  we  have  heard 
so  much  about  and  that  semes  to  convey  an  unfavorable  im- 
pression against  shale  retorting?  Let  us  illustrate  by  analogy : 
On  a  mountain-side  is  a  beautiful  forest  of  giant  pines,  which 
nature  has  been  carefully  nurturing  for  1000  years.  We  saw 
them  into  timber  of  many  dimensions,  pieces  large  and  small, 
some  thick  and  some  thin,  and  from  these  we  construct  a 
machine,  a  bridge,  a  dwelling.  We  must  first  destroy  the 
trees  of  the  forest  before  we  can  obtain  material  with  which 
to  construct  the  dwelling.  We  employ  destruction  to  obtain 
material  to  undertake  construction.  In  the  shale  we  have 
the  vegetal  growth  of  prehistoric  ages  in  the  form  of  petro- 
gen.  We  decompose  it  and  destroy  its  form  much  as  we  do 
the  tree  and  the  forest,  and  from  it  we  construct  a  new  mate- 
rial. We  destroy  the  petrogen  to  construct  the  petroleum 
from  which  to  produce  the  shalene,  keresone  and  the  lubri- 
cating oils. 

Destructive  distillation,  therefore,  is  not  so  utterly  destruc- 
tive as  it  sounds,  and  we  might  better  use  the  term  "destructo- 
constructive"  distillation  when  speaking  of  the  production  of 
petroleum  from  petro-shales.  In  the  case  of  extraction  of 
petroleum  from  oil  shales,  no  material  chemical  change  is 


540  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

affected  and  only  straight  or  ordinary  distillation  is  employed 
in  centra-distinction  to  "destructo-eonstructive"  distillation 
as  in  the  treatment  of  the  petro-shales. 

In  order  then  to  convert  the  petrogen  into  petroleum  it  is 
necessary  to  effect  a  chemical  change  of  the  hydro-carbons. 
This  may  be  done  by  the  application  of  heat,  but  as  the  com- 
pounds derived  from  petrogen  are  highly  combustible  the 
shale  must  be  treated  within  air-tight  compartments.  If 
air  is  permited  to  enter  the  retorting  chamber  when  the  gases 
have  reached  a  temperature  of  650  degrees  F.  or  over,  the  mix- 
ture becomes  spontaneously  combustible  and  an  explosion 
results.  In  that  case  we  have  effected  what  takes  place  in  the 
carburetor  of  your  automobile,  the  right  mixture  of  gas  and 
oxygen  for  rapid  combustion.  This  must  be  prevented. 

The  proportion  of  the  permanent  gases  produced  are  gov- 
erned by  the  method  of  retorting  and  the  experience  of  the 
operator.  Other  things  being  equal,  it  is  desirable  to  keep 
the  proportion  of  fixed  or  permanent  gases  as  low  as  possible. 

There  is  another  portion  of  our  product,  however,  that  we 
are  not  yet  entirely  able  to  control,  although  partly  so.  We 
might  call  it  an  unfinished  product.  Owing  to  the  fact  that 
petrogen  contains  a  much  larger  proportion  of  carbon  than 
of  hydrogen,  and  that  our  petroleum  products  require  possibly 
from  two  to  three  times  as  many  hydrogen  atoms  as  carbon 
atoms,  it  is  evident  that  our  resultant  products  and  spent 
shale  will  contain  a  considerable  amount  of  carbon,  which 
has  not  been  able  to  secure  the  required  amount  of  hydrogen 
for  the  production  of  a  staple  petroleum  product.  These  are 
our  unsaturated  hydro-carbons  which  should  also  be  kept  as 
low  as  possible.  Their  production,  like  that  of  the  fixed 
gases,  is  largely  governed  by  the  process  used  and  the  knowl- 
edge of  the  operator. 

It  is  obvious  then  that  if  our  petro-shales  are  properly 
heated,  the  petrogen  will  be  volatilized  or  converted  into 
gas,  and  as  this  is  conveyed  into  a  suitable  cooling  system, 
the  greater  portion  will  condense  and  form  crude  petroleum. 
There  are  certain  portions,  however,  which  cannot  be  con- 
densed. These  constitute  the  fixed  or  permanent  gases,  and 
after  having  been  "scrubbed"  or  passed  through  oil  and 
water,  to  remove  the  remaining  naphtha  and  nitrogen  con- 
tained in  them,  are  used  for  fuel  under  the  retort  and  for 


PETRO-SHALES   OF   THE   WESTERN    SLOPE  541 

power  purposes  in  the  engine.  Shales  yielding  45  gallons  or 
better  to  the  ton  are  usually  capable  of  producing  sufficient 
fuel  for  their  own  retorting.  The  nitrogen  is  recovered  and 
converted  into  ammonium  sulphate,  which  is  a  valuable  fer- 
tilizer. The  potash  and  any  metals  that  may  be  contained 
remain  in  the  residue,  or  spent  shales,  and  are  easily  recover- 
able by  leaching  or  concentration. 

The  crude  oil  obtained  ranges  in  color  from  a  dark  brown 
to  olive  green,  and  in  specific  gravity  from  .841  to  .925.  It 
consists  largely  of  oils  of  the  paraffin  and  olefine  series,  com- 
parable with  paraffin  well  oil  of  the  highest  grade.  From 
this  can  be  produced,  by  ordinary  distillation,  lubricating  oils 
and  paraffin,  as  well  as  all  the  products  of  the  coal  tar,  includ- 
ing the  finest  of  synthetic  dyes. 

Manufacturing  Enterprise 

Fortunately  this  premise  is  not  one  based  on  speculation. 
The  risks  incidental  to  well  drilling  are  eliminated,  and  when 
the  ledges  have  been  carefully  sampled  and  measured  by  a 
competent  engineer  and  found  commercially  profitable,  the 
enterprise  becomes  strictly  one  of  quarrying  and  manufac- 
turing, based  on  known  quantities  of  raw  material,  with  every- 
thing indicating  good  prices  for  the  products  for  years  to 
come.  The  petrogen  will  not  migrate  into  a  neighbor's  ground 
if  he  works  and  you  do  not,  such  as  is  often  the  case  in  pump- 
ing of  oil  wells,  and  the  shale  ledges  if  properly  selected  are 
of  such  magnitude  tbat  they  cannot  be  exhausted  through  the 
life  of  several  generations. 

Special  Requirements 

To  be  of  value  commercially  a  shale  deposit  must : 

(1)  Be  located  advantageously  as  to  railroad  facilities. 

(2)  Consist  of  beddings  of  sufficient  thickness  for  cheap 
mining. 

(3)  Contain  a  mill  site  to  enable  movements  by  gravity 
from  the  ledge  to  eduction  plant  at  minimum  cost. 

(4)  Contain  shale  of  sufficiently  high  grade  to  warrant 
profitable  operation. 

(5)  Be  proved  workable  by  a  known  economical  and  con- 
tinuous process,  capable  of  handling  an  unlimited  tonnage 
daily. 


542  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

(6)  Have  ample  water  for  all  mining,  retorting  and  refin- 
ing purposes. 

To  the  individual  or  corporation  that  is  buying  shale  land 
for  the  erection  and  operation  of  machinery  there  are  a  num- 
ber of  essentials  which  must  not  be  overlooked. 

Frequently  little  credence  can  be  given  to  statements  of 
yield  made  by  the  owner  from  the  fact  that  the  cost  of  analy- 
sis usually  prevents  his  having  more  than  one  or  two  tests 
made,  and  these  perhaps  by  no  means  dependable  samples. 
More  often  his  statements  are  a  guess,  based  on  what  some 
one  else  claims  for  shale  which  looks  like  his,  or  he  may  have 
had  a  test  run  made  by  some  stock  company  in  a  window  dis- 
play retort  by  an  inexperienced  operator.  At  any  rate  one 
must  positively  sample  the  property  with  precision  and  care 
before  accepting  it.  It  is  not  so  much  the  purchase  price 
that  concerns  us  as  the  hundreds  of  thousands  and  perhaps 
millions  of  dollars  to  follow  that  must  be  invested,  and  that 
must  not  be  spent  on  a  worthless  property.  No  more  difficult 
or  undesirable  work  comes  to  the  mining  engineer  than  the 
sampling  of  a  shale  ledge,  and  when  the  samples  have  been 
secured,  to  be  reliable  they  must  be  run  by  a  competent  chem- 
ist ;  one  who  has  had  retorting  experience ;  one  who  knows  that 
it  is  necessary  to  insulate  his  retort,  to  replace  the  long  "goose 
neck"  with  a  closed  nipple  and  ell;  that  fully  appreciates  the 
value  of  the  "time  element"  in  retorting  and  that  understands 
the  importance  of  separation  of  his  product  and  does  not 
report  the  emulsion  as  oil,  etc.  His  results  should  be  shown 
in  a  properly  signed  certificate. 

It  is  necessary  to  inspect  all  monuments  on  the  claims;  the 
location  monument  to  see  that  it  contains  a  proper  notice, 
and  if  a  petroleum  placer  blank  form  has  been  used  that  the 
words  "oil  shale"  have  been  written  into  the  location  notices, 
and  that  the  claims  are  not  held  simply  under  a  petroleum 
location;  that  the  corner  monuments  either  are  all  properly 
in  place  or  that  there  is  evidence  that  they  were  properly  set 
when  located  and  any  fallen  monuments  re-set;  to  see  that  a 
valid  shale  discovery  was  made  on  each  claim  prior  to  the 
passing  of  the  leasing  bill  on  the  25th  of  February,  1920. 
It  is  not  sufficient  that  the  locator  state  that  the  bedding 
extends  under  the  surface,  even  though  he  may  be  satisfied 


PETRO-SHALES    OF    THE    WESTERN    SLOPE  543 

of  the  fact,  and  it  is  not  sufficient  that  discovery  of  petro-shale 
be  made  in  doing  this  year's  ^assessment  work. 

One  must  satisfy  himself  that  the  locators  are  all  bona  fide 
locators  who  are  participating  both  in  the  expense  attached 
to  the  locations  and  receipts  of  sale,  and  that  this  is  neither  a 
"horse  back"  or  a  "dummy  location."  If  possible  it  is  well 
to  interview  each  locator,  or  as  many  of  them  as  possible, 
and  if  the  transaction  is  being  conducted  through  an  attorney- 
in-fact  it  is  important  to  secure  the  signature  of  each  locator 
to  the  option  which  you  hold,  even  though  you  may  accept  a 
deed  from  the  attorney-in-fact  if  you  so  desire.  If  deeds 
have  been  made  to  one  or  two  of  the  locators  the  case  requires 
more  than  ordinary  investigation.  In  passing  over  the  land 
you  should  also  observe  that  there  has  been  no  subsequent 
entries,  either  desert  or  otherwise  which  will,  of  course,  not 
appear  on  the  abstract,  and,  therefore,  be  known  by  your  attor- 
ney when  he  passes  on  this  unless  you  inform  him  regarding 
these  matters  or  a  trip  to  the  land  office  be  made. 

Mill-Site 

When  the  property  and  titles  have  been  found  satisfactory, 
the  next  important  matter  is  that  of  mill  site,  dumping  ground 
and  water,  each  of  which  is  almost  as  important  as  the  shale 
land  itself,  but  which  is  seriously  overlooked  by  probably  90 
per  cent,  of  our  shale  investors.  It  is  necessary  that  it  be 
so  placed  that  the  shale  bed  may  be  moved  by  gravity  from 
the  ledge  to  the  plant  without  unnecessary  hoisting  or  han- 
dling, for  in  this  country  the  entire  success  of  the  industry  will 
depend  upon  large  operations.  It  is  equally  important  that 
sufficient  dump  will  accumulate  in  the  years  to  come.  When 
we  consider  that  the  shale  on  retorting  expands  in  bulk,  that 
it  forms  a  light  product  that  will  be  easily  carried  away  by 
floods  and  freshets,  that  the  neighbor  below  your  property 
may  perhaps  seriously  object  to  the  storing  of  your  tailings 
for  you,  it  becomes  important  that  the  matter  of  ample  dump- 
ing ground  should  not  be  overlooked.  At  least  30  per  cent, 
of  your  holdings  should  consist  of  dumping  ground,  taking 
for  example  such  deposits  as  we  find  in  Colorado,  where  thick 
beddings  and  large  tonnage  will  be  treated. 

The  site  selected  for  the  retorting  plant  should  be  located 
upon  the  comb  of  a  ridge  at  a  point  out  of  danger  from  falling 


544  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

or  rolling  rock,  and  immediately  below  the  measure  of  shale 
that  is  to  be  worked.  In  the  De  Beque  district  this  will  aver- 
age approximately  400  feet  below  the  top  part  of  the  shale 
member  and  possibly  from  500  to  700  feet  from  the  creek 
bottom. 

Water 

For  the  immediate  present  the  water  problem  is  not  serious, 
and  until  a  large  number  of  extensive  plants  come  into  opera- 
tion there  will  perhaps  be  no  difficulty,  but  it  is  a  lamentable 
fact  that  a  great  deal  of  land  has  been  selected  by  purchasers 
which  has  not  an  ample  water  supply  and  which  will  have 
difficulty  in  securing  one.  It  is  true  that  in  nearly  all  of  our 
Western  fields  there  are  at  present  small  live  springs  which 
upon  development  may  be  made  to  produce  a  sufficient  quan- 
tity of  water  for  100  or  200-ton  units.  It  is  also  true  that  in 
most  all  fields  on  the  Western  slope  there  are  ravines  which 
contain  good  shale  bottoms  and  in  the  mouth  of  which  dams 
can  be  constructed  for  impounding  water  from  the  melting 
snows,  but  when  the  great  plants  shall  come  into  operation 
such  as  we  may  look  for  within  the  next  two  to  five  years  and 
later,  the  water  problem  becomes  a  serious  one,  and  the  com- 
pany that  is  amply  financed  and  officered  for  large  operation 
should  not  overlook  the  matter  of  immediately  securing  an 
ample  water  supply  from  ranchers  or  otherwise.  It  is  true 
that  crude  ^petroleum  may  be  produced  from  shale  without 
water,  but  the  profitable,  successful  big  plant  will  consume 
from  one  to  three  gallons  of  water  for  every  gallon  of  oil 
produced,  and  while  a  portion  of  this  may  be  recovered  and 
used  over  again,  the  water  required  will  still  be  of  material 
import. 

Refinery 

It  should  be  noted  that  crude  petroleum  produced  from  our 
Western  shales  is  of  a  heavy  paraffin  base  and  cannot  be  suc- 
cessfully transmitted  through  pipe,  lines  to  any  great  distance, 
particularly  in  the  winter  time  in  these  mountain  localities. 
It  becomes  important,  therefore,  that  the  refinery  be  placed 
reasonably  near  to  the  retorting  plant.  This  may  be  done  by 
putting  it  on  the  creek  bottom  at  a  point  where  it  might  serve 
one  or  a  number  of  retorting  plants  in  the  same  gorge  or 


I'KTIiO-SHALES  OF  THE  WESTERN  SLOPE  545 

ravine.  The  crude  petroleum  may  then  be  conveyed  while  it 
is  still  warm  and  whether  partly  fractioned  or  not  to  the 
refinery,  thereby  reducing  materially  the  refinery  expense,  or 
it  might  be  placed  at  the  junction  of  a  number  of  ravines 
wherein  various  retorting  plants  may  be  operated,  and  there- 
by serve  a  number  of  plants  or  a  number  of  companies.  Even- 
tually, fractionation  will  be  so  far  developed  that  it  will  be 
possible  to  convey  at  least  three  'different  products  directly 
from  the  retorting  plant  to  the  refinery  many  miles  away,  and 
when  this  is  done  the  refinery  may  be  placed  directly  upon 
the  railroad  where  the  various  products  may  be  conveyed  into 
the  tank  car.  For  the  time  being,  however,  it  is  advisable 
to  place  the  refinery  and  retorting  plant  near  each  other  at  a 
point  where  the  various  refined  products  may  be  loaded  either 
into  tank  cars  or  into  tank  trucks.  It  should  be  perfectly 
feasible  and  profitable  at  the  present  time  where  good  truck 
roads,  such  as  those  throughout  the  De  Beque  district  particu- 
larly exist,  to  operate  at  a  distance  up  to  25  or  possibly  30 
miles  from  the  railroad,  and  to  convey  the  refined  products  by 
truck  to  the  railroad  tank  cars  until  such  time  as  railroad 
transportation  may  come  nearer.  In  that  case  the  same  truck 
should  not  be  used  for  the  light  and  heavy  products.  While 
a  distance  of  25  miles  now  seems  excessive,  it  will  within  a 
few  years  become  the  center  of  an  active  shale  district. 

Mining     //- 

The  matter  of  mining  is  not  as  difficult  as  has  sometimes 
been  intimated.  Shale  may  be  drilled  satisfactorily  by  per- 
cussion drills,  either  wet  or  dry,  although  dry  drilling  is 
objectionable  on  account  of  the  dust  produced.  In  one  case 
on  average  shale  which  I  have  in  mind  five  feet  per  day  was 
averaged  in  drilling  200  feet  of  tunnel,  5  by  6  feet  in  section, 
with  a  Waugh  drill.  The  crew  consisted  of  one  engineer  and 
mechanic,  one  driller  and  two  shovelers;  power  furnished  by 
a  30-horse-power  gasoline  engine. 

Still  better  results  are  being  obtained  in  a  number  of  in- 
stances by  the  use  of  a  boring  machine,  which  is  applicable 
to  all  commercial  shales  and  which  has  the  advantage  of 
requiring  only  10  to  15  per  cent,  of  the  amount  of  power  used 
with  the  air  drill.  The  shale  after  drilling  breaks  entirely 
satisfactorily  when  a  low-grade  powder  is  used. 


546  PROCEEDINGS   OF   AMERICAN   MINING  CONGRESS 

Our  present  mining  will  be  confined  practically  to  under- 
ground work  and  not  steam  shovel,  as  is  erroneously  stated. 
My  experience  has  been  that  not  10  per  cent,  of  what  is 
claimed  to  be  steam-shovel  deposits  will  be  successfully  worked 
that  way  for  many  years  to  come.  A  good  power  shovel, 
which  can  be  operated  by  electricity,  requiring  a  much  smaller 
crew  and  has  the  advantage  of  being  easily  movable,  is  pref- 
erable. The  cost  under  present  conditions,  on  ledges  from 
six  feet  upwards,  for  mining  and  delivering  into  the  crusher 
bin  should  not  reach  $1.25  per  ton. 

Equipment 

For  the  time  being  we  are  only  interested  in  the  production 
of  oils,  and  possibly  potash,  and  the  recovery  of  any  metals 
that  may  exist  in  the  various  beddings  and  which  range  from 
traces  to  as  much  at  times  as  $4  or  $5.  Our  shales  do  not 
contain  sufficient  nitrogen  to  warrant  the  installation  of  an 
ammonia  plant.  Such  a  unit  may  be  added  at  any  time  should 
development  disclose  sufficiently  increased  nitrogen.  When 
the  tonnage  .shall  have  reached,  say,  1000  tons  per  day  or 
better  we  shall  in  all  probability  find  it  profitable  to  produce 
ammonium  sulphate.  The  initial  plant,  whether  it  be  one 
of  10  tons  per  day  or  100  tons  per  day,  should  be  so  con- 
structed that  enlargement  may  follow  without  increased  cost 
or  disruption  of  the  portion  already  built.  In  no  case  should 
installation  be  made  of  more  than  100  tons  per  day  until  the 
process  has  been  fully  adapted  to  the  particular  shales  to  be 
treated,  the  product  to  be  made  fully  determined  upon  and 
the  market  at  least  reasonably  well  established. 

The  efficient  retorting  plant  should  permit  only  minimum 
cracking,  giving  a  yield  of  only  about  SVa  Per  cent-  of  the 
crude-oil  product  as  shalene.  We  will  thus  retain  a  higher 
yield  of  lubricating  oil,  and  ultimately  a  higher  yield  of 
shalene,  the  two  most  important  and  valuable  products.  Should 
it  be  desirable  to  produce  flotation  oils,  the  same  rule  will  hold 
good,  it  becoming  a  matter  merely  of  dollars  and  cents  as  to 
which  products  will  be  put  out  when  the  plant  becomes  estab- 
lished. Provision  should  be  made  for  the  recovery  of  all 
water-soluble  potash  and  such  gold,  silver  or  platinum  as  may 
exist  and  that  may  be  recovered  by  amalgamation.  About 
80  per  cent,  of  metals,  as  a  rule,  are  thus  recoverable,  but 


I'KTRO-SHALES  OF  THE  WESTERN  SLOPE  547 

until  extensive  operations  be  reached  it  will  not  be  advisable 
or  profitable  to  add  cyaniding  equipment.  A  careful  esti- 
mate for  a  100-ton  plant  constructed  on  the  average  well- 
located  Western  property  and  designed  to  produce  shalene, 
kerosene,  lubricating  oil,  wax  and  recovery  of  metals  is  as 
follows : 

Estimate  for  100-ton  equipment  and  camp : 

Mining  camp  to  accommodate  employes,  water-works, 

lighting,   etc $10,000  00 

Mine  equipment,  compressor,  drills,  haulage,  etc 12,000  00 

Crushing  plant 8,000  00 

Eduction  plant 40,000  00 

Refining  plant 65,000  00 


$135,000  00 

The  capacity  may  be  doubled  for  from  $85,000  to  $100,000,  making  a 
200-ton  eduction  plant  with  refinery  cost  $235,000. 

Production  Cost  Sheet: 

V 

Operating  cost  is  shown  below  to  cover  mining,  eduction 
and  refining. 

Operating  100-ton  daily  capacity  plant: 

Mining  and  crushing  ($1.25  per  ton) $125  00 

Eduction — 3  shifts,  2  men  (each  $4.50  per  day) 27  00 

1  mechanic  ($5.00  per  day) 5  00 

2  helpers  ($4.00  per  day) 8  00 

Repair  and  upkeep 6  00 


$171  00 
Refining  of  crude  oil  and  pressing  wax  (average  $1.12 

per  ton) 112  00 

Marketing,  transportation,  etc.  (40  cents  per  ton) ...  40  00 

Management,  superintendence,  office^  help  and  rent. .  37  00 
Total  operating  cost,  320  working  days  per  year  ($360 

per   day) 115,200  00 

Fixed  Costs: 

Insurance,       2.5%  on  basis  $135,000 $3,375  00 

Taxes,  2.0%  on  basis  $135,000 2,700  00 

Interest  6.0%  on  basis  $135,000 8,100  00 

Depreciation,  8.0%  on  basis  $135,000 10,800  00 

$24,975  00 


Grand   total   for   treating  32,000   tons   per   year 

(equals  total  cost  of  $4.3804  per  ton) $140,175  00 


548  PROCEEDINGS   OF   AMERICAN   MIXING   CONGRESS 

A  thousand  pounds   of  shale  from  De  Beque  treated  at 
Salt  Lake  City  gave  the  following : 


Per  cent,  o: 

e 

Sp.  Gr.. 

crude  oil. 

Gal. 

15.50°  C. 

Be. 

Price, 

c.  Value,  c. 

Crude  oil  

< 

20.25 

.901 

25 

Gasoline   

4.5 

1.08 

.7550 

55 

.25 

.27 

Kerosene    

12.0 

2.82 

.8175 

41 

.18 

.40 

Heavy  illuminating.  . 

10.5 

2.10 

.8438 

36 

.12 

.25 

Fuel  oil  

9.5 

2.00 

.8670 

31 

.05 

.10 

Light  lubricating  

8.0 

1.64 

.8922 

27 

.30 

.49 

Medium  lubricating. 

14.5 

2.85 

.9250 

26 

.35 

.99 

Heavy  lubricating  .  .  . 

11.0 

1.5 

.9693 

15 

.45 

.92 

Ammonium  sulphate 

1.4  pounds 

.05 

.07 

Gasoline  from  gases 

2.4  gallons. 

.25 

.60 

Wax,  6.6  per  cent  .  .  . 

.12 

.79 

Product,  1000 

pounds  

$4.88 

Product,  1  ton 

$9.76 

Receipts  on  100  tons  per  day,  320  working  days,  at 

$9.76  per  ton $312,320  00 

Costs  at  $4.3804  per  ton,  as  per  previous  sheet 140,175  00 


Profits   $172,145  00 

For  absolute  conservatism  and  unforeseen  emergency 
deduct  33  per  cent 56,807  85 


Net  profits  one  year $115,337  15 

By-Products  of  Value 

But  what  of  the  enormous  values  of  our  shales,  the  various 
products  and  the  hundreds  of  by-products  that  we  have  heard 
so  much  about  of  late?  Every  derivative  of  coal  tar  that  is 
named  in  the  average  textbook  on  chemistry  has  been  her- 
alded as  a  shale  product,  conveying  the  impression  that  these 
may  be  recovered  by  the  shale  operator.  The  writer  of  one 
article  claims  to  have  extracted  between  one  and  two  hun- 
dred of  these.  It  would,  of  course,  be  of  interest  to  the  shale 
operator  in  general  and  the  chemist  in  particular  to  know 
the  formula  used  and  the  percentage  recovered  of  each.  Aside 
from  the  fact  that,  in  addition  to  hydrogen  and  carbon,  our 
shales  contain  such  quantities  of  nitrogen  and  potash  as 
usually  go  to  make  up  plant  and  animal  life,  they  are  not 
unlike  ordinary  carbonaceous  shales  and  other  sedimentary 
rocks  for  which  no  such  claims  have  ever  been  made.  Such 


PETRO-SIIALES  OF  THE  WESTERN  SLOPED  549 

metals,  of  course,  as  were  carried  to  the  lake  bottom  by  the 
muds  and  sediments  which  went  to  make  up  these  shales  are 
still  contained  therein,  and  if  they  happen  to  be  petro-shales 
the  metals  will  be  found  in  the  spent  shale  after  treatment 
for  oil.  As  a  rule  they  are  negligible,  small  quantities  of  gold 
and  silver  being  present  in  almost  all  shales,  just  as  in  all 
rocks  and  soil.  Only  in  exceptional  cases  do  these  become 
commercially  of  sufficient  value  tc  be  of  interest. 

Utilization  of  Residue 

It  is  true  also  that  the  shale  residue  in  some  cases  has  values 
for  making  cement,  the  body  of  paints,  cardboard,  roofing,  for 
road  material  and  various  other  products,  but  for  the  time 
being  its  proper  place  must  be  considered  as  on  the  tailings 
dump.  If  later  on  its  owner  finds  a  market  for  it,  all  well  and 
good.  It  is  also  true  after  its  production  that  certain  frac- 
tions and  the  residue  of  the  oil  forms  the  basis  from  which 
are  made  a  large  number  of  products,  among  which  are  the 
most  permanent  of  synthetic  dyes  of  infinite  varieties,  drugs 
and  anesthetics  for  human  use,  the  sweetest-smelling  per- 
fumes, and  even  the  explosives  which  we  need  in  time  of  peace 
as  well  as  war.  The  production  of  these,  however,  require 
immense  factories,  which  can  only  come  with  time,  and  their 
presence,  therefore,  must  only  be  credited  to  the  shales  in  as 
far  as  they  may  make  an  added  market  for  the  shale  plant's 
output. 

While  the  elements  for  the  production  of  all  these  are  locked 
up  in  our  great  shale  deposits  in  limitless  quantities,  and  while 
they  will  some  day  do  their  part  to  make  of  America  the 
greatest  producing  nation  in  the  world,  they  cannot  hold  at  this 
time  be  held  out  as  an  inducement  for  the  investor  to  put  his 
money  into  the  shale  industry,  and  they  need  not  be.  Nor  is 
is  necessary  to  claim  for  our  shales  fabulous  values.  It  is 
sufficient  to  know  that  they  are  of  high  grade,  can  be  easily 
mined  and  treated  on  a  large  scale,  that  they  are  capable  of 
producing  (at  a  good  profit)  a  large  yield  of  what  have  now 
come  to  be  some  of  the  very  essentials  of  our  existence — 
gasoline  and  oils.  Just  as  there  was  perhaps  no  one  element 
that  played  a  greater  part  than  gasoline  in  our  successful 
outcome  of  the  great  World  War,  so  will  there  be  no  product 


550  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

perhaps  that  will  contribute  more  to  our  progress  and  com- 
fort for  the  next  hundred  years  than  will  gasoline  and  oil.  We 
now  know  for  a  fact  that  we  must  without  delay  turn  to  the 
shales  for  this  product  or  witness  in  the  very  near  future  a 
shortage  that  will  cause  us  serious  and  costly  restriction  in 
its  use. 


THE  ART  OF  FLOTATION  551 


FLOTATION  CONFERENCE 


THE  PROCESS  OR  ART  OF  FLOTATION 
By  GEORGE  E.  COLLINS,  Mining  Engineer,  Denver,  Col. 

The  subject  of  our  conference  is  the  process,  or  art,  of  flota- 
tion. I  use  the  alternative  word  advisedly,  because  it  seems 
to  me  to  describe  more  correctly  the  actual  development  of 
the  methods  which  are  used  under  the  general  name  of  flota- 
tion, which  really  includes  a  great  number  of  more  or  less 
distant  methods,  shading  into  each  other.  The  one  general 
link  connecting  all  these  different  methods  is  the  addition  of 
some  modifying  agent  to  water  in  which  ore  is  suspended,  and 
the  use  of  froth  or  bubbles  to  which  the  ore  particles  become 
attached,  and  which  lift  them  away  from  the  waste. 

The  modifying  agent  is  usually  oil,  with  or  without  acid, 
but  an  almost  infinite  variety  of  other  substances,  soluble  or 
insoluble,  have  been  suggested  and  actually  tried. 

So  much  of  the  history,  and  also  of  the  technique,  of  this 
art  has  been  obscured  as  a  result  of  the  unfortunate  manner 
in  which  it  has  become  a  shuttlecock,  driven  from  one  side 
to  another  by  contending  parties  in  the  courts,  both  sides 
endeavoring  to  assert  their  own  claims  rather  than  the  ab- 
stract truth,  that  it  seems  to  me  desirable  to  state  anew  the 
origin  of  the  art.  And  when  I  speak  of  origin,  I  propose  going 
back  to  a  time  before  the  word  flotation  had  been  coined,  and 
long  before  the  inception  of  any  of  the  patents  which  are  now 
claimed  to  cover  all  its  applications. 

Brief  History  of  Flotation 

The  early  history  of  flotation  is  of  special  interest  to  us, 
because  some  of  it  took  place  within  a  short  distance  from  our 
meeting  place  today. 

I  shall  spare  you  any  reference  to  Herodotus,  or  the  various 
early  discoverers  of  the  fact  that  oil  and  grease  tend  to  adhere 
to  surfaces  such  as  those  of  sulphide  ores  in  preference  to 
quartz  or  other  gangue  substances*  Many  experimenters, 


552  PROCEEDINGS   OF   AMERICAN   MINING  CONGRESS 

myself  among  them,  recognized  that  this  attraction  was  not 
uniform,  but  selective,  and  attempted  to  base  working  methods 
of  ore  treatment  on  the  fact.  So  far  as  I  recollect,  however, 
the  only  practical  outcome  of  these  investigations  has  been  the 
grease  tables  used  in  South  Africa  for  the  extraction  of  dia- 
monds from  other  minerals  with  which  they  are  associated. 

The  true  discoverer  of  what  we  call  flotation  was  a  Chicago 
physician,  Dr.  William  K.  Everson,  who  sank  a  considerable 
fortune  in  Colorado  mines  before  1880,  and  became  interested 
in  the  treatment  of  ores.  Everson  seems  to  have  been  a  true 
inventive  genius,  endowed  with  a  considerable  share  of  the 
scientific  spirit.  The  first  outcome  of  his  investigations  was 
a  patent  granted  in  1886.  (No.  348157)  to  his  wife,  Carrie  J. 
Everson.  This  patent  has  been  considered  to  include  all  the 
elements  necessary  to  guide  a  metallurgist  in  the  practical 
working  of  the  process.  To  me,  it  indicates  that  Everson 
failed  entirely  to  appreciate  the  kind  of  practical  manipula- 
tion necessary  to  complete  a  satisfactory  working  method. 

Dr.  Everson  came  to  Denver  toward  the  end  of  1886  or  begin- 
ning of  1887  as  an  invalid  with  his  family.  At  this  time  he 
appears  to  have  been  in  straitened  circumstances,  and  fhe 
possibility  of  their  being  taken  by  his  creditors  is  said  to  have 
been  the  principal  reason  for  taking  out  the  flotation  and 
other  patents  in  the  name  of  his  wife. 

While  in  Denver  Dr.  Everson  made  many  unsuccessful 
attempts  to  interest  local  mining  men  in  the  development  of 
his  process  on  a  working  scale,  and  in  the  course  of  such 
efforts  numerous  demonstrations  were  made  with  apparatus 
very  similar  to  that  we  might  use  for  preliminary  tests  today. 
It  seems  clear  that  at  this  time,  if  not  at  the  time  of  taking 
out  the  original  patent,  he  appreciated  the  importance  of 
using  froth  to  lift  up  and  carry  off  the  mineral  particles,  for 
he  made  use  of  an  egg-beater  to  produce  agitation,  and  occa- 
sionally also  air,  which  was  introduced  from  an  atomizer  by 
means  of  a  glass  tube  to  the  bottom  of  the  flask  used  for  the 
experiments. 

At  the  beginning  of  1889  Dr.  Everson  died,  and  his  widow 
attempted,  with  the  aid  of  an  ex-blacksmith  named  Thomas 
J.  Criley,  who  probably  furnished  some  funds  for  the  purpose, 
to  get  the  process  tried  out  on  a  working  scale.  To  this  end 
experiments  were  conducted  in  an  old  mill  at  Silver  Cliff. 


THE  ART  OF  FLOTATION  553 

Tests  in  the  Early  Nineties 

The  description  of  the  experiments  suggests  a  decided  fall- 
ing off  in  practicability,  as  compared  with  Dr.  Everson's  own 
laboratory  demonstrations,  and  they  failed.  Mrs.  Everson 
later  (in  1891)  became  associated  with  one  Charles  B.  Heb- 
ron, and  a  patent  (No.  471174)  was  taken  out  in  their  joint 
names,  which  incorporated  Mr.  Hebron's  own  ideas  of  ore 
treatment  with  Mrs.  Everson's  recollections — doubtless  im- 
perfect— of  her  husband's.  To  my  mind,  this  patent  shows  a 
decided  falling  off  as  compared  with  the  earlier  one.  It 
includes  the  idea  of  using  a  buoy-stock,  somewhat  along  the 
lines  of  the  original  Elmore  process,  and  also  the  germ  of  the 
future  Murex  process.  Experiments,  probably  unsuccessful, 
were  made  with  this  method  at  Valverde,  near  Denver. 

Mr.  Ben  Stanley  Revett  has  described  his  personal  recollec- 
tion of  experiments  made  by  Criley  at  Baker  City.  I  distinctly 
recollect  some  experiments,  made  by  agitating  powdered  ore 
in  a  flask  with  oil,  made  at  my  father's  office  in  London.  Both 
of  these  experiments  were  clearly  froth  flotation. 

I  do  not  remember  the  year  of  this  experiment,  but  it  was 
made  at  my  father's  older  office  at  /Basmghall  street,  ^mcTnof 
at  his  later  office  at  Broad-Street  Avenue,  from  which  fact  the 
date  could  be  approximately  ascertained.  Unfortunately,  I 
do  not  remember  much  of  the  detail,  except  that  the  flask  used 
for  the  experiment,  and  the  oil,  black  in  color,  were  provided 
by  the  visitor.  I  plainly  recollect  grinding  up  the  ore  to  be 
tested  in  a  pestle  and  mortar,  and  the  man's  appearance.  He 
was  dark  in  complexion,  of  gross  appearance,  and  very  volu- 
ble. He  may  have  been  the  Charles  B.  Hebron  of  the  1891 
patent.  My  father  was  away  at  the  time,  and  I  was  alone  in 
the  office,  having  come  up  from  Cornwall.  On  his  return  I 
made  an  appointment  for  him  to  see  the  process  man,  but  do 
not  know  what  came  of  it.  I  recollect  that  the  idea  of  making 
ore  float  appeared  to  me  absurd,  as  I  thought  that  it  was. 
infinitely  easier  and  cheaper  to  allow  it  to  sink,  but  my  father 
did  not  seem  equally  skeptical.  I  wrote  to  him  in  1915,  shortly 
before  his  death;  he  remembered  the  incident,  but  could  not 
add  anything  to  my  recollection. 

On  consideration  I  am  convinced  that  Dr.  Everson  really 
invented  the  art  of  flotation  just  as  it  has  since  been  de- 
veloped, and  I  believe  that  had  he  lived  a  few  years  longer 


554  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 

the  process  would  have  been  perfected  and  have  come  into 
general  use  20  years  earlier.  Many  persons,  better  able  than 
myself  to  judge  of  the  feasibility  of  the  idea,  certainly  wit- 
nessed the  demonstrations,  and  the  fact  that  nobody  realized 
what  a  great  thing  they  were  missing  is  rather  a  reflection  on 
the  lack  of  imagination  of  the  ordinary  man.  » 

It  may  be  apropos  if  I  briefly  refer  to  my  experiments 
made  in  the  use  of  grease  in  concentration  about  1899  or 
1900,  when  I  used  a  grease  table  for  catching  escaped  mineral 
from  a  gold  stamp  mill  much  as  Haultain  and  Guess  did  more 
effectively  a  few  years  later.  My  contribution  was  the  fact 
that  the  product  so  caught  was  far  richer  than  the  ordinary 
concentrate  recoverable  by  re-concentration  of  the  tailing.  The 
latter  would  carry  only,  say,  half  an  ounce  to  the  ton,  mine  ran 
several  hundred  dollars.  I  showed  that  a  sort  of  selective 
concentration  was  possible;  the  grease  on  the  table  became 
loaded  with  pyrite  concentrate  in  a  few  hours,  but  this  was  of 
low  assay.  By  leaving  the  table  in  the  stream  for  several 
weeks  a  very  high-grade  product  was  obtained.  Of  course,  it 
was  small  in  quantity,  and  very  messy  to  handle;  it  was 
shipped  to  the  smelter,  and  to  sample  it  was  worth  almost 
the  value. 

A  short  time  after  these  experiments,  Haultain  and  Guess 
made  similar  experiments  on  a  much  larger  scale  at  the  Silver 
Lake  mill  at  Silverton,  San  Juan  County.  They  there  worked 
out  the  practical  application  of  grease  concentration  in  a  very 
complete  and  able  manner,  but  I  think  failed  to  realize  as  com- 
pletely as  I  did  the  selective  possibilities. 

I  have  already  indicated  that,  in  my  opinion,  Dr.  Everson 
was  the  first  inventor  of  flotation,  but  the  seed  fell  on  stony 
ground  and  withered.  For  a  number  of  years  after,  say,  1893, 
in  this  country  nothing  whatever  was  done  to  develop  flotation. 

Recent  Improvements 

Meantime  Robson  and  Elmore  had  taken  the  matter  up  in 
England,  and  the  latter,  a  metallurgist  of  great  ability,  had 
introduced  bulk  flotation,  and  worked  out  suitable  apparatus 
to  apply  it  practically.  His  subsequent  introduction  of  a 
vacuum  to  release  the  air  dissolved  in  the  water  of  an  ore  pulp, 
together  with  the  re-invention  either  by  Messrs.  Sulman  and 
Higgins,  or  by  metallurgists  employed  at  the  Central  mill  at 


THE  ART  OF  FLOTATION  555 

Broken  Hill,  Australia,  according  to  the  version  we  believe, 
of  froth  flotation  induced  by  agitation,  complete  the  early  his- 
tory of  the  process.  Subsequent  development  has  been  deter- 
mined on  the  one  hand  by  the  energy,  determination  and 
financial  backing  of  the  gentlemen  who  built  up  the  organiza- 
tion of  Minerals  Separation  in  one  direction,  and  on  the 
other  by  a  great  number  of  independent  investigators  who 
have  worked  out  almost  every  conceivable  variation  and  modi- 
fication. 

Placing  oneself  in  the  position  of  an  observer  from  the  out- 
side, and  endeavoring  to  sum  up  the  gradual  unfolding  of  the 
art  as  it  will  be  viewed  by  the  historian  of,  say,  50  years  hence, 
it  is  surprising  how  little  of  the  practical  result  seems  to 
depend  on  the  original  conception,  and  how  much  on  the  condi- 
tions under  which  it  is  applied  and  developed. 


556  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 


HAS  THE  ATTITUDE  OF  MINERALS  SEPARATION  RETARDED 
THE  DEVELOPMENT  OF  FLOTATION  CONCENTRATION? 

By  W.  C.  RUSSELL,  Mining  Engineer,  Denver,  Col. 

When  in  1915  I  commenced  to  consider  flotation  as  a  com- 
mercial method  of  concentration,  having  previously  been 
acquainted  with  it  only  as  a  laboratory  experiment,  I  natur- 
ally sought  the  scientific  literature  on  the  subject.  Much  to 
my  surprise  I  found  but  one  book  and  a  few  scattered  articles 
comprising  the  sum  total  of  the  contributions  to  the  technology 
of  this  important  branch  of  metallurgy. 

Technology  of  the  Process 

I  read  Mr.  Theodore  Hoover's  book  and  began  a  collection 
of  everything  available  on  the  subject,  but  it  was  not  until 
after  some  months  of  painstaking  effort  had  failed  to  add 
much  that  was  worth  while  to  my  store  that  I  began  to  search 
earnestly  for  a  reason  to  explain  the  paucity  of  technical  data 
and  illuminating  experiment  which  engineers  have  grown  so 
accustomed  to  find  and  enjoy  in  current  contributions  to 
scientific  magazines,  and  discovered  that  apparently  all  infor- 
mation was  being  systematically  suppressed. 

This  clearly  indicated  a  motive  and  an  interest,  and  soon 
after  the  decision  of  the  Supreme  Court  in  the  Hyde  case 
(I  think  in  the  spring  of  1917),  when  first  I  read  the  iniq- 
uitous license  contract  offered  those  desirous  of  using  flotation, 
the  trail  of  carefully  suppressed  information  led  me  to  the 
door  of  Minerals  Separation.  Since  then  I  have  talked  with 
many  engineers,  mining  men  and  mill  operators,  and  have  yet 
to  find  one,  whether  licensee  or  non-user,  who  does  not  de- 
nounce the  attitude  of  Minerals  Separation,  which  in  suppress- 
ing information  and  muzzling  operatives  has  retarded  the 
development  of  an  art  of  great  use  to  a  great  industry. 

The  attitude  of  a  powerful  corporation  toward  a  single 
item,  like  a  policy  of  Government  or  a  particular  thing  or  the 
custom  of  a  country,  is  only  to  be  gathered  from  many  things, 
the  sayings  and  expressions  of  many  people,  and  so  for  the 


MINERALS  SEPARATION  AND  FLOTATION  557 

most  part  this  paper  of  mine  is  a  mere  compilation  of  many 
articles  and  editorial  comments  Covering  the  past  six  years. 

Abstracts  From  the  Technical  Press 

In  May,  1914,  when  the  United  States  Court  of  Appeals  had 
held  Minerals  Separation's  patent  claims  invalid,  the  Engi- 
neering  and  Mining  Journal  said: 

"Of  course,  no  one  will  seek  to  minimize  the  credit  that 
belong  to  Messrs.  Sulman,  Picard  and  Ballot  and  their 
well-organized  and  accomplished  staff  for  their  develop- 
ment of  the  froth-flotation  process  and  their  enterprise 
in  contributing  to  its  becoming  the  important  commercial 
factor  that  it  is  today.  But  similarly  is  the  technical  staff 
of  the  Zinc  Corporation,  in  whose  works  at  Broken  Hill 
the  first  great  commercial  success  was  achieved  entitled 
to  credit.  We  think  that  American  mine  operators  will 
be  disposed  to  recognize  in  a  substantial  way  the  engi- 
neering services  of  the  Minerals  Separation  Co.,  even  if 
they  will  not  accept  its  claims  to  a  monopoly. 

"The  Minerals  Separation  Co.  possesses  the  'know  how' 
in  the  application  of  this  process,  and  for  that  reason  we 
have  no  doubt  that  the  majority  of  American  mine  owners 
having  difficult  ores  to  treat  will  go  to  it  and  pay  it  for  its 
knowledge  and  services,  patent  or  no  patent.  The  whole 
spirit  of  the  American  mining  industry  is  one  of  freedom 
in  the  application  of  processes,  the  exchange  of  informa- 
tion for  the  benefit  of  everybody,  an  abhorrence  of  royal- 
ties and  an  objection  to  monopolies.  On  the  other  hand, 
the  modern  ideas  of  co-operation  give  the  proper  recogni- 
tion, financial  and  otherwise,  to  those  who  contribute  to 
improvements  in  the  arts.  We  are  disposed  to  think  that 
Minerals  Separation's  loss  of  its  American  patent  will 
prove  a  blessing  to  itself." 

In  January,  1915,  the  same  journal  said: 

"Everybody  has,  of  course,  noticed  the  dearth  of  dis- 
cussion about  the  flotation  process  in  the  current  tech- 
nical literature.  The  explanation  of  this  is  the  still 
unsettled  patent  litigation  and  the  attitude  of  Minerals 
Separation,  Ltd.,  the  claimant.  That  company  will 
neither  permit  its  own  employes  to  talk  or  write  about 
the  process  nor  will  it  permit  the  employes  of  its  licensees 
to  do  so.  We  do  not  recollect  any  metallurgical  process  of 
broad  application  and  use  respecting  which  such  efforts 
toward  secrecy  have  been  exerted  and  so  far  have  been 
successfully  maintained.  Toward  that  end  no  stone  is 
left  unturned.  For  example,  a  flotation  apparatus  is 


558  PROCEEDINGS   OF  AMERICAN    MIXING  CONGRESS 

introduced  somewhere  for  experimental  purposes.  The 
experiments  finished,  the -apparatus,  which  is  essentially 
a  construction  of  timber,  is  destroyed  by  axes.  Naturally, 
those  concerns  which  are  employing  the  flotation  process 
without  license  from  Minerals  Separation  and  are  liable 
to  be  called  into  court  keep  their  mouths  shut  as  a  matter 
of  policy." 

In  March,  1916,  in  an  article  in  Canadian  Mining  Journal, 
Mr.  C.  Terry  Durell  said : 

"Seldom  has  litigation  so  retarded  a  science  by  smoth- 
ering it  in  a  cloud  of  secrecy.  It  is  to  be  regretted  that 
this  condition  has  been  brought  about  by  some  prominent 
engineers  attempting  to  gain  a  world-wide  control  of  all 
processes  of  flotation  after  the  basic  patents  expired." 

At  a  meeting  of  the  American  Institute  of  Mining  Engi- 
neers in  1916,  Mr.  H.  W.  DuBois,  presenting  some  of  his 
views  as  to  the  demands  then  being  pressed  by  the  claimants 
to  flotation  patents,  took  occasion  to  remark : 

"Japan  (I  am  informed)  has  passed  a  law  by  which  no 
flotation  patents  will  be  allowed,  solely  in  the  interests  of 
best  conservation  of  their  natural  resources.  This  is 
interesting,  if  true.  I  also  am  informed  (and  this,  I 
think,  is  reliable  information)  that  applications,  with  the 
identical  wording  of  the  fundamental  flotation  patents 
which  were  granted  to  the  Minerals  Separation  Co.  in  the 
United  States,  were  submitted  previous  to  the  United 
States  applications  to  the  German  Government.  After 
an  investigation,  the  German  Patent  Office  decided  that 
there  was  nothing  new  in  these  claims,  and  therefore 
patents  were  not  allowed. 

"It  is  a  matter  of  undoubtedly  a  good  deal  more  impor- 
tance to  us  as  mining  men  to  know,  if  these  flotation  pat- 
ents are  going  to  be  sustained  by  our  highest  courts, 
whether  the  practice  in  the  past  of  demanding  excessive 
royalties  is  to  be  maintained.  In  some  countries,  if  a  man 
has  a  patent  and  wants  royalties  which  the  industry  con- 
siders unreasonable,  those  affected  can  go  to  the  Govern- 
ment and  get  an  adjudication  as  to  some  reasonable  rate  of 
royalties.  That  is  not  true  in  our  country;  but  I  think 
we  should  take,  as  mining  men  generally,  a  little  more 
interest  in  the  subject  to  prevent  statements  which  are 
not  true  from  being  quoted  as  true  before  our  highest 
courts,  and  apparently  accepted  by  them  with  such  con- 
fidence that  decisions  are  being  rendered  along  such  lines 
as  are  going  to  burden  greatly  the  mining  industry  on 


MINERALS  SEPARATION  AND  FLOTATION  559 

account  of  the  unreasonable  royalties  demanded  by  the 
parties  having  their  patents  sustained  by  the  courts." 

After  the  decision  (December,  1916)  by  the  Supreme  Court 
in  the  Hyde  case,  the  Metallurgical  and  Chemical  Engineering 
said  editorially : 

"  *  *  *  The  decision  is  of  wide  interest  and  has 
been  awaited  patiently  by  many  metallurgists  who  were 
concerned  in  one  way  or  another  with  the  future  of  flota- 
tion in  this  country,  and  who  viewed  with  apprehension 
the  prospect  of  a  monopoly  in  that  new  and  promising 
branch  of  metallurgy.  *  *  It  is  equally  true  that 

it  (Minerals  Separation)  will  find  ready  adversaries 
along  the  way  eager  to  break  the  monopoly  which  un- 
doubtedly has  deterred  some  big  operators  from  openly 
adopting  flotation. 

A  little  later  and  after  the  broadcast  distribution  of  the 
"stand  and  deliver"  letter  of  Attorney  Henry  D.  Williams,  the 
Mining  and  Scientific  Press  (February,  1917)  said: 

"Steps  are  being  taken  by  the  Minerals  Separation 
people  to  exact  royalty  from  those  not  licensed  by  them 
to  use  froth  flotation  process.  We  published  a  copy  of  the 
letter  sent  by  their  lawyer  to  various  mining  companies, 
together  with  the  list  of  questions  the  latter  are  ordered 
to  answer.  The  tone  is  mandatory  and  peremptory.  Some 
of  the  questions  are  inquisitorial  and  unwarranted.  It  is 
no  business  of  Minerals  Separation  what  'type  of  manu- 
facture of  apparatus'  is  used  by  anybody.  The  Supreme 
Court  has  upheld  the  validity  of  patent  No.  835,120,  but 
defined  it  closely,  and  under  that  definition  no  embargo  is 
placed  on  the  use  of  any  machine  unless  it  involves  the 
application  of  a  process  employing  less  than  1  per  cent,  of 
oil  and  the  'beating  in'  of  air.  Again,  the  demand  for  par- 
ticulars concerning  'any  flotation  tests'  made  on  the  ore 
is  quite  outside  reasonable  curiosity — it  is  an  imperti- 
nence. The  object,  evidently,  is  to  obtain  information  for 
the  use  of  Minerals  Separation,  and  to  discover  the  names 
of  metallurgists  engaged  in  experimental  work  in  order 
to  put  them  on  a  black  list.  Thus  the  company  is  continu- 
ing its  maladroit  methods  of  antagonizing  those  engaged 
in  mining  and  of  creating  an  intensified  opposition  to  its 
alleged  monopoly. 

And  still  later,  the  same  journal  said,  editorially,  on  March 
10,  1917: 


560  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 

"In  a  recent  issue  we  published  a  copy  of  the  peremp- 
tory letter  sent  by  the  Minerals  Separation  people  to  the 
users  of  the  flotation  process.  It  appears  that  this  letter 
was  sent  to  some  mining  companies  that  are  not  using 
and  never  intend  to  use  flotation;  for  example,  the  Ken- 
nedy Mining  Co.  at  Jackson,  Cal.,  in  the  Mother  Lode 
region.  The  manager  of  the  Kennedy  mine  received  the 
peremptory  demand  of  the  Minerals  Separation  people 
for  specific  data  concerning  his  mill  operations,  and  this 
was  followed  by  the  threat  of  a  suit  for  injunction.  Cer- 
tainly, Minerals  Separation  has  acquired  a  fatal  facility 
for  irritating  those  engaged  in  mining.  *  *  * 

"Our  contemporary  at  New  York  publishes  a  paragraph 
commenting  on  the  mandatory  circular  issued  by  Min- 
erals Separation  and  expressing  the  pious  opinion  that 
'the  company  has  no  idea  of  instituting  vindictive  meth- 
ods with  anyone  who  has  used  flotation  without  paying 
royalties  for  it.'  This  statement  is  incorrect.  The  lan- 
guage used  by  Mr.  John  Ballot,  the  chairman  of  Minerals 
Separation,  and  by  Dr.  S.  Gregory,  its  New  York  repre- 
sentative, indicates  sentiments  not  to  be  reconciled  with 
the  ladylike  policy  thus  outlined.  On  the  contrary,  the 
Minerals  Separation  people  believe  that  they  have  a  cinch 
and  they  intend  to  make  the  most  of  it;  they  expect  to 
use  the  utmost  power  of  the  law  in  bringing  inf  ringers  to 
their  knees  and  compelling  them  to  pay  not  only  tribute, 
but  ransom.  The  circular-letter  contained  questions — 
such  as  those  asking  whether  any  flotation  tests  had  been 
made  on  the  ore,  and  'if  so,  by  whom' — that  have  to  be 
taken  in  connection  with  Minerals  Separation's  attempt 
to  compel  metallurgists  to  sign  an  agreement  binding 
them  not  to  disclose  anything  they  learned  in  a  mill  or 
laboratory  licensed  by  Minerals  Separation  to  use  froth 
flotation.  That  contract  was  submitted  by  us  to  a  good 
lawyer  and  he  pronounced  it  'without  valuable  considera- 
tion and  unconscionable.'  There  was  no  quid  pro  quo. 
It  was  a  bluif  which  failed,  but  it  was  one  more  evidence 
of  the  real  policy  of  Minerals  Separation,  namely,  to  pre- 
vent the  spread  of  knowledge  concerning  the  process;  to 
hold  to  itself  not  only  the  right  to  impose  a  royalty,  but 
the  more  objectionable  power  to  place  an  embargo  on 
technical  information." 

The  Metallurgical  and  Chemical  Engineering  followed  in 
July,  1917,  with  this : 

"*  *  *  Sulman,  Picard  and  Ballot,  who  obtained 
tion  process  has  been  marred  by  unending  litigation  be- 
tween the  owners  of  a  number  of  the  basic  patents  and 


MINERALS  SEPARATION  AND  FLOTATION  561 

various  concentrating  mills  who  have  either  wittingly  or 
unwittingly  committed  infringements.  It  is  notorious 
that  a  very  large  percentage  of  mill  operators  have 
assumed  an  openly  hostile  attitude  toward  the  Minerals 
Separation  Co.,  which  is  unfortunate  in  the  extreme,  but 
which  they  aver  is  entirely  due  to  'bulldozing'  and  other 
'armstrong'  methods  of  the  holding  company.  It  is  a 
matter  of  universal  regret  that  it  seems  impossible  to 
suppress  recrimination  leading  even  to  war  during  the 
development  of  this  process  which  has  such  wonderful 
potentialities." 

In  September,  1917,  the  Engineering  and  Mining  Journal 
published  this  editorial: 

"*  *  *  Sulman,  Picard  &  Ballot,  who  obtained  the 
the  basic  patents  now  owned  by  Minerals  Separation,  are 
entitled  to  the  highest  possible  credit  for  carrying  for- 
ward the  early  work  of  others  in  the  field  of  flotation  to 
a  brilliant  outcome  in  the  laboratory.  The  management 
of  Minerals  Separation  exhibited  great  skill  and  percep- 
tion in  collecting  a  far-reaching  group  of  patents  pertain- 
ing to  the  new  art.  With  bulldog  persistency  they  have 
fought  their  case  through  the  courts  of  Australia,  Great 
Britain  and  the  United  States.  No  fair-minded  person 
ought  to  want  to  deny  them  the  rights  that  the  highest 
courts  have  given  them.  But  when,  in  the  same  breath, 
Minerals  Separation  asserts  that  the  use  of  more  than  1 
per  cent,  of  oil  gives  woefully  inferior  results  as  com- 
pared with  the  use  of  less  than  1  per  cent.,  and  yet  claims 
the  right  to  collect  royalty  on  the  use  of  any  quantity  of 
of  oil,  in  certain  ways,  there  is  created  a  feeling  that 
hoggishness  is  being  exhibited.  While  the  mining  public 
ought  generously  to  admit  the  service  that  Minerals  Sepa- 
ration has  rendered  to  it,  that  company  ought  on  its  own 
part  to  recognize  the  service  that  mining  and  milling  men, 
especially  those  of  Broken  Hill,  rendered  to  it  in  making 
a  commercial  success  of  its  process.  In  this,  as  in  many 
other  new  steps  in  metallurgy,  as,  for  example,  in  the 
cases  of  basic  copper  converting  and  in  coal-dust  firing, 
there  was  a  big  gap  between  the  idea  and  the  successful 
development  of  it  in  practice.  The  enormous  success  of 
the  flotation  process  of  ore  concentration,  which  is  admit-, 
tedly  one  of  the  major  improvements  of  all  times  in 
metallurgy,  is  the  result  of  the  work  of  many  men.  That 
being  the  case,  one  small  group  of  men  cannot  be  per- 
mitted to  sit  astride  the  mining  industry  of  the  world 
claiming  and  collecting  royalties  at  its  own  sweet  will. 


562  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 

So  long  as  any  such  wish  is  expressed  there  will  be 
litigation. 

"Rightly  or  wrongly,  the  mining  industry  of  the  United 
States  has  obtained  the  idea  that  the  management  of  Min- 
erals Separation  is  arbitrary,  dictatorial  and  grasping. 
In  its  own  interest,  that  management  ought  to  dispel  that 
idea.  Instead  of  antagonizing  the  mining  industry,  it 
ought  to  seek  to  win  its  friendliness  and  co-operation.  If 
such  a  wish  were  exhibited,  the  mining  industry  would 
meet  the  company  half  way.  It  would  be  a  good  idea  for 
the  management  of  the  American  subsidiary  of  Minerals 
Separation  to  hold  a  conference  with  representative  men 
of  the  mining  industry  and  talk  things  over,  giving  the 
mining  men  a  chance  to  say  what,  in  fairness,  they  them- 
selves think  they  ought  to  do  and  not  telling  them  what 
they  must  do. 

"After  getting  a  decision  from  the  United  States 
Supreme  Court  for  a  process  of  concentration  with  a 
critical  reaction  when  less  than  1  per  cent,  of  oil  is  used, 
the  attorneys  of  Minerals  Separation,  Ltd.,  argued  at  the 
recent  trial  in  Butte  that  the  use  of  more  than  1  per  cent, 
is  likewise  an  infringement.  The  Shade  of  Carrie  Ever- 
son,  after  listening  to  some  of  these  arguments,  is 
reported  to  have  prepared  for  a  hasty  and  noiseless 
departure,  saying:  'I  had  better  leave  here  spurlos  ver- 
senkt,  or  those  Minerals  Separation  attorneys  will  be 
coming  after  me  for  back  royalty.' s 

October  6,  1917,  the  same  journal  carried  this  as  a  news 
item  from  Toronto,  Canada,  under  date  of  September  29, 
1917: 

"Cancellation  of  oil  flotation  patents  controlled  by 
Minerals  Separation  North  American  Corporation  is  be- 
ing urged  to  prevent  curtailment  in  production.  The 
Minerals  Separation  North  American  Corporation  has 
for  some  time  threatened  to  bring  actions  for  infringe- 
ment against  the  Cobalt  mining  companies  using  the 
flotation  process.  *  *  However,  at  a  meeting  of 

the  Temiskaming  Mine  Managers'  Association,  held  at 
Cobalt  on  September  28,  the  following  resolution  was 
unanimously  adopted: 

"  'WHEREAS  the  attitude  of  the  Minerals  Separation 
North  American  Corporation,  who  claim  to  control  all 
the  basic  patents  for  the  treatment  of  ores  by  oil  flotation, 
has  restricted  the  output  of  war  metals  and  retarded  the 
economic  development  of  the  mineral  resources  of  thic 
country  by  claims  for  unreasonable  royalties  and  by 
threatened  lawsuits,  it  is  hereby 


MINERALS  SEPARATION  AND  FLOTATION  563 

"  'Resolved,  That  the  Temiskaming  Mine  Managers' 
Association  lend  their  sympathy  and  hearty  co-operation 
to  the  Northern  Miner  of  Cobalt  in  its  endeavor  to  have 
the  patents  and  personnel  of  the  Minerals  Separation 
North  American  Corporation  thoroughly  investigated  by 
the  Government,  with  a  view  to  having  the  patents 
annulled/  ' 

In  November,  1917,  the  Canadian  Mining  Institute  Bulletin 
said,  editorially: 

"The  Minerals  Separation  North  American  Corpora- 
tion has  succeeded  very  well  in  antagonizing  the  mining 
world  of  this  continent  by  the  avaricious  course  it  has 
seen  fit  to  pursue.  Therefore,  anyone  who  '  'eaves  'arf  a 
brick  at  it/  can  do  so  with  the  comfortable  assurance  that 
his  performance  will  be  hailed  with  a  harmonious  chorus 
of  approval.  A  campaign  was  started  vigorously,  and  has 
been  prosecuted  energetically  by  the  Northern  Miner  at 
Cobalt,  as  a  protest  against  the  threat  of  the  company  to 
'hold  up*  the  mines  that  are  employing  the  Callow  process, 
and  thereby,  it  is  alleged,  infringing  the  Minerals  Sepa- 
ration patents.  *  *  *  It  will  not  be  in  the  least  diffi- 
cult to  demonstrate  that  Minerals  Separation,  believing 
it  has  now  a  whiphand  by  having  gained  absolute  control 
of  the  basic  process,  seeks  to  use  that  control  to  the 
utmost,  regardless  of  the  effect  on  the  mining  industry. 
That  this  effect  will  be  detrimental,  by  tending,  in  par- 
ticular, to  check  the  development  of  resources  and  the 
production  of  essential  metals  at  a  time  when  it  is  vitally 
necessary  in  the  national  interests  that  such  production 
should  be  maintained  at  a  maximum  level,  is  in  itself  a 
sufficiently  strong  argument  to  impel  Government  action, 
the  aim  of  which  would  be  not  to  deprive  the  proprietors 
of  a  valuable  patent,  of  their  just  rights  to  collect  a  roy- 
alty from  those  deriving  benefit  from  its  use,  but  (as  a 
war  measure)  to  protect  the  user  from  being  forced  to 
submit  to  unreasonable  demands  and  inhibitions,  whereby 
industry  would  be  adversely  affected  and  production  cur- 
tailed. Incidentally,  and  merely  as  an  indication  of  the 
company's  rapacity,  it  may  be  noted  that  the  amount  it 
proposes  to  collect  as  royalty  from  the  Cobalt  mines  is 
in  excess  of  the  total  revenue  derived  by  the  Government 
from  the  mine  taxation  in  the  area.  In  ordinary  times, 
of  course,  the  company  could  be  exacting  as  it  pleased 
so  long  as  it  had  the  power  and  considered  it  good  busi- 
ness to  exercise  it,  and  everyone  would  realize  the  futility 
of  kicking  against  the  pricks.  The  case  now  is  different, 
and  it  is  quite  certain  that  if  the  Canadian  Government 


564  PROCEEDINGS  OF  AMERICAN    MINING  CONGRESS 

can  once  thoroughly  be  satisfied  that  Minerals  Separation 
North  American  Corporation,  even  it  if  isn't  German 
controlled,  proposes  to  follow  a  program  in  dealing  with 
the  mines  that  will  at  all  impede  us  in  fighting  Germany, 
prompt  and  effective  measures  will  be  taken  to  nullify  its 
plans.  Meanwhile,  efforts  in  Canada  to  circumscribe  the 
activities  of  the  Minerals  Separation  octopus  will  un- 
doubtedly be  regarded  sympathetically  by  many  of  our 
neighbors  to  the  South,  to  whom  it  is,  not  without  cause, 
anathema." 

The  "perpetual  bondage"  clause  of  Minerals  Separations' 
license  contracts  received  Canadian  attention  in  an  editorial 
in  the  Canadian  Mining  Journal,  under  date  of  November  15, 
1917,  from  which  I  quote: 

"  *  *  *  The  claims  of  the  Minerals  Separation 
corporations  with  regard  to  discoveries  by  users  of  the 
process  seem  ridiculous  to  Canada,  and  it  is  unlikely  that 
support  for  them  could  be  found  under  our  laws.  It 
would  be  foolish  for  anyone  to  subscribe  to  such  a  contract 
as  this  until  it  has  been  proved  legal.  If  it  has  not  been 
proved  legal  in  Canada,  and  if  the  Minerals  Separation 
North  American  Corporation  insists  on  such  a  contract 
being  signed  before  granting  a  license,  then  the  Corpora- 
tion is,  in  fact,  refusing  to  grant  licenses.  The  obvious 
penalty  for  such  action  should  be  demanded.  *  *  * 

"It  is  an  undeniable  fact  that  not  only  a  few,  but  a 
great  number  of  metallurgists  have  contributed  funda- 
mentally toward  the  successful  development  of  the  flota- 
tion process.  What  seems  so  unreasonable  in  the  whole 
affair  is  that  Minerals  Separation  endeavors  to  claim  the 
right  of  any  further  discoveries  or  improvements  made 
whether  by  themselves  or  anyone  else.  This  is,  in  part, 
what  they  request  a  licensee  to  subscribe  to: 

"  'The  licensee  shall,  during  his  license,  promptly  com- 
municate and  explain  to  the  licensors  every  invention  or 
discovery  made  or  used  by  them  which  may  be  an  im- 
provement, modification  or  addition  to  any  of  the  inven- 
tions specified  in  the  Letters  Patent  within  this  license, 
or  may  be  useful  in  carrying  out  any  of  the  processes 
thereby  protected  or  any  addition  thereto  or  modification 
thereof,  whether  patentable  or  not,  which  the  said 
licensees  may  use  or  be  or  become  possessed  of.  All  such 
inventions  and  discoveries  shall  be  so  available  for  use  by 
the  licensees  as  if  they  were  contained  in  the  Letters 
Patent  within  this  license,  and  subject  thereto  the 
licensors  shall  be  entitled  to  have  the  full  benefit  of  and, 
if  obtainable,  to  have  Letters  Patent  for  any  such  im- 


MINERALS  SEPARATION  AND  FLOTATION  565 

provements  or  discoveries  communicated  to  them  by  the 
licensees,  which  said  Letters  Patent  shall  be  and  become 
the  property  of  the  licensors,  and  the  licensees  shall  ren- 
der all  assistance  in  their  power  for  that  purpose  *  *  * 
(see  Section  3  of  license).' 

"//  this  is  not  a  deliberate  attempt  to  monopolize  one 
entire  branch  of  science,  for  what  purpose,  then,  was  the 
word  'monopoly'  coined?  Other  individuals  own  some- 
what similar  patents.  All  have  contributed  fundamen- 
tally toward  making  the  flotation  process  the  success  that 
it  is.  None  have  contributed  wholly  toward  doing  so. 
None  should  be  permitted  to  monopolize  a  chain  of  dis- 
coveries evolved  through  years  of  toil  and  study  by  inde- 
pendent workers.  In  a  measure,  local  enterprises  solve 
the  problem  of  the  economic  treatment  of  Cobalt  ores. 
The  problem  was  solved  by  an  adherence  to  certain  prin- 
ciples laid  down  by  Frank  Elmore,  Minerals  Separation, 
and  presumably  many  other  metallurgists,  coupled  to- 
gether with  not  a  few  separate  and  distinct,  new,  practi- 
cal and  scientific  ideas  developed  by  local  ingenuity. 

"If  the  Minerals  Separation  or  their  subsidiary  in 
America  is  British  or  American,  it  would  be  nothing 
short  of  a  crime  to  annul  a  solitary  right  contained  in 
their  patents.  But  if  they  elect  to  interpret  liberty  as 
'license'  for  profiteering,  then  just  as  surely  as  rights 
exist  they  should  be  called  to  task  and  a  curb  applied. 
This  curb  would  consist  of  the  fixing  of  royalty  terms  by 
the  Canadian  Government.  *  *  * 

"Our  quarrel  is  against  an  apparently  burdensome  mo- 
nopoly. Anything  that  tends  to  impede  progress  in  the 
mining  profession  we  will  oppose.  We  directly  charge 
Minerals  Separation  North  American  Corporation  with 
an  apparently  deliberate  attempt  to  mortgage  the  brains 
of  the  men  who  become  their  licensees.  We  directly 
charge  that  concern  with  retarding  the  progress  of 
metallurgy. 

"Read  the  following  Prussianized  sections  5  and  6  of 
the  license  a  licensee  or  prospective  licensee  must  sub- 
scribe to : 

"'(5)  The  licensees  shall  not,  directly  or  indirectly, 
during  the  continuance  of  this  license,  nor  at  owy  time 
after  the  termination  thereof,  dispute  or  object  to  the 
validity  of  the  Letters  Patent  within  this  license  or  the 
novelty  or  utility  of  the  inventions  suecified  therein. 

1  '(6)  The  licensees  shall  not,  either  directly  or  indi- 
rectly, during  the  continuance  of  the  Letters  Patent 
within  this  license  or  any  of  them,  use  the  said  inventions 
or  processes  or  any  improvement  or  modification  thereof 
or  addition  thereto  otherwise  than  in  accordance  with 


566  PROCEEDINGS   OF  AMERICAN    MINING   CONGRESS 

these  presents,  and  the  licensees  hereby  undertake  and 
agree  that  they,  their  officials  and  agents,  will  not  in  any 
way,  directly  or  indirectly,  support  or  assist  third  or 
hostile  parties  in  any  litigation  either  against  the  licen- 
sors or  any  licensees  of  the  licensors,  or  against  Minerals 
Separation,  Ltd.,  of  London,  England,  or  subsidiary  or 
associated  companies  or  successors  owning  patents  in  the 
British  Empire  or  in  any  foreign  country  for  the  inven- 
tions protected  by  the  Letters  Patent  within  this  license, 
or  its  or  their  licensees,  or  by  the  licensors  or  said  Min- 
erals Separation,  Ltd.,  or  said  other  companies,  against 
others/ 

"In  other  words,  the  fruits  of  a  licensee's  intellect  are 
not  his  own — they  are  Minerals  Separation's — if  that 
concern  can  enforce  the  lettering  of  their  license.  Surely 
such  a  pledge  cannot  be  British.  It  would  be  difficult 
here  to  measure  the  embarrassment  to  which  a  licensee 
would  be  subjected  during  the  future  practice  of  his  pro- 
fession. He  would  always  labor  under  the  possibility  of 
Minerals  Separation,  contending  that  any  stand  relating 
to  the  subject-matter  of  the  agreement  and  brought  for- 
ward by  the  licensee  in  his  subsequent  career,  was  a 
breach  of  his  pledges.  He  would  be  honor  bound  to  not 
even  any  time  after  the  termination  of  the  contract  be 
permitted  to  utter  adverse  opinions  regarding  the  validity, 
novelty  or  utility  of  the  Letters  Patent. 

"Has  any  set  of  individuals  the  Prussianized  right  to 
seal  the  future  or  muzzle  the  expanding  or  changing 
views  of  the  budding  intellect  of  Canada?  Can  Minerals 
Separation  get  support  of  the  legality  of  such  an  attempt 
in  this  Dominion?  Self-respect  of  mining  men  of  this 
country  forms  a  barrier  to  their  becoming  a  party  to 
such  a  pledge.  Self-respect  of  the  Government  will 
surely  not  permit  the  continuance  of  the  attempt.  The 
discoveries  resultant  upon  the  intellect  which  flows 
through  this  particular  branch  of  the  channels  of  science 
must  not  be  taken  into  impoundage  by  one  set  of  indi- 
viduals who,  at  their  own  discretion,  may  permit  them 
to  become  of  use  to  the  world  or  rule  that  they  should 
stagnate  in  the  pigeon-hole  of  an  obscure  desk  of  New 
York's  Broadway." 

In  an  article  published  in  the  Engineering  and  Mining  Jour- 
nal, under  date  of  December  1,  1917,  Mr.  R.  C.  Canby  said: 

"  *  *  *  The  mining  world  should  not  fail  to  give 
due  credit  to  these  gentlemen  (Sulman,  Picard  and  Ballot) 
for  their  marvelous  perception  as  to  the  possibility  of 
such  processes,  even  though  the  evidence  of  such  percep- 


MINERALS  SKI 'A  RATION  AND  FLOTATION  567 

tion  has  been  most  largely  shown  in  the  development  of  a 
monopoly  in  patent  ownership  and  by  the  expenditure  of 
,    large  sums  in  patent  litigations,  rather  than  in  metal- 
lurgical developments. 

The  patent  laws  of  Canada  contain  a  provision  intended  as 
a  brake  upon  extortion  under  the  guise  of  patent  monopoly, 
which  many  of  the  mining  fraternity  who  are  obliged  to  deal 
with  Minerals  Separation  devoutly  wish  were  duplicated  upon 
our  statute  books. 

The  Canadian  Mining  Journal,  speaking  of  flotation  patents 
in  the  Dominion  of  Canada,  said  in  its  issue  of  January  1, 
1918: 

"  *  *  *  It  is  questionable  whether  the  Miner- 
als Separation  patents  are  now  of  any  great  value  in 
Canada.  In  our  issue  of  October  15  we  pointed  out  that 
Canadian  laws  allow  only  a  reasonable  royalty,  and  that 
the  Minerals  Separation  corporations  can  hardly  expect 
to  be  successful  in  Canadian  courts  as  in  United  States 
courts.  We  stated  that  if  the  American  corporation 
threatens  Canadian  users  of  the  process  with  claims  for 
excessive  amounts  it  must  be  only  bluffing.  It  is  pro- 
vided under  Section  44  of  the  Canadian  Patent  Act  that 
in  case  a  patentee  refuses  to  grant  licenses  to  others  on 
reasonable  terms,  any  one  may  apply  to  the  Commissioner 
of  Patents  for  a  license  to  make,  use  or  sell  the  patented 
invention.  As  the  claims  of  the  Minerals  Separation 
Corporation  and  the  conditions  under  which  it  issues 
licenses  are  unreasonable,  it  is  obvious  that  Canadian 
mining  companies  have  good  reason  to  assume  that  an 
application  to  the  commissioner  would  be  successful." 

And  in  the  same  issue  published  an  article  by  Mr.  W.  E. 
Simpson  as  follows: 

"  *  *  *  Minerals  Separation  —  In  harmony  with 
its  attitude  elsewhere,  the  Minerals  Separation  Co., 
through  its  subsidiary  organization,  the  North  American 
Corporation,  has  threatened  proceedings  against  all  users 
of  flotation  in  the  Cobalt  district,  so  as  to  collect,  if  pos- 
sible, the  royalty  of  21/*  per  cent,  of  the  gross  value  of 
the  whole  concentrate  recovered,  according  to  the  usual 
demands  of  this  patent  exploiting  company.  The  suc- 
cess of  flotation  at  Cobalt  is  due  entirely  to  local  enter- 
prise; therefore,  this  demand  is  resented  bitterly.  The 
indications  are  that  a  legal  fight  is  to  follow,  and  a  cam- 
paign has  been  started  to  enlist  Government  action  'with 


568  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

a  view  to  having  the  patents  annulled/  Amid  the  legal 
turmoil,  metallurgical  progress  is  being  seriously  handi- 
capped, the  free  exchange  of  ideas  has  been  completely 
stopped,  and  an  embargo  is  being  placed  on  valuable 
information.  It  is  sincerely  hoped  that  an  equitable 
settlement  may  be  obtained  at  the  earliest  possible  mo- 
ment. ***** 

Article  3  of  Minerals  Separation  license  agreement,  which 
the  prospective  user  of  flotation  must  swallow  if  he  would 
avoid  litigation,  received  attention  in  an  article  published  by 
Engineering  and  Mining  Journal  in  February,  1918,  as  fol- 
lows : 

"  *  *  *  Article  3  is  one  to  which  so  much  objec- 
tion has  been  raised,  it  being  contended  by  most  people 
that  this  article  of  the  agreement  has  practically  stifled 
development  by  licensed  users  of  the  process.  The  fact 
that  all  improvements  made  by  licensees  must  be  turned 
over  to  the  patent  holders  has  a  decided  tendency  to 
destroy  any  incentive  on  the  part  of  operators  toward 
experimentation  on  improvement  of  the  process.  Licensees 
may  not,  without  the  consent  of  the  licensors,  tell  other 
operators  about  any  modifications  or  improvements  they 
may  make,  but  this  is  in  consonance  with  the  attitude  of 
Minerals  Separation  in  inhibiting  its  technical  staff  from 
•  the  customary  participation  in  discussion  of  this  process, 
before  scientific  societies  or  in  the  current  technical  liter- 
ature. A  glance  over  the  literature  of  the  process  shows 
the  barrenness  of  the  members  of  the  Minerals  Separa- 
tion staff  in  this  respect ;  except  in  the  Patent  Office  and 
in  the  patent  suits  their  names  have  for  the  most  part 
been  kept  submerged.  Whatever  developments  have 
been  reported  in  the  last  five  or  more  years,  as  to  the 
nature  of  the  process  and  its  manifestations,  has  come 
from  outside  of  the  Minerals  Separation  Co.,  which 
has  not  only  restricted  the  expansion  of  information 
through  its  own  engineers,  but  has  obligated  users  of 
the  process  to  contribute  their  information  only  to  Min- 
erals Separation.  The  further  restriction  near  the  end 
of  Article  3,  prohibiting  licensees  from  using,  without 
the  written  consent  of  the  licensors,  any  improvement, 
modification  or  addition  to  any  of  the  inventions  not  the 
property  of  Minerals  Separation,  presumably  has  for  its 
object  the  protection  of  the  royalties  of  the  Minerals 
Separation  Co.'s  patents.  Licensees  might  have  a  dif- 
ferent point  of  view  in  the  event  of  some  epoch-making 
development  in  the  process — or  might  even  view  the  mat- 


MINKIIALS  SKI'AUATIOX  AND  FLOTATION  569 

ter  differently  now,  did  they  not  fear  the  all-pervading 
patent  hand." 

Mr.  V.  F.  Stanley  Low,  member  of  the  Institution  of  Min- 
ing and  Metallurgy,  member  of  the  Australasian  Institute  of 
Mining  Engineers,  member  of  the  American  Institute  of  Min- 
ing Engineers,  and  a  well-known  Australian  engineer,  who  was 
connected  with  mining  at  Broken  Hill  from  1902  to  1910,  con- 
tributed an  article  to  Mining  Magazine  in  April,  1919,  in 
which  he  said: 

"Although  the  concentration  of  minerals  by  means  of 
froth  flotation,  as  distinct  from  the  Elmore  vacuum  proc- 
ess, has  been  in  successful  commercial  operation  for 
over  14  years,  very  little  has  been  written  on  the  sub- 
ject by  British  metallurgists  in  the  British  technical  press. 
This  is,  in  part,  due  to  a  national  characteristic,  by  vir- 
tue of  which  our  metallurgists  and  engineers  are  content 
to  carry  on  the  work  in  hand,  seeking  no  notoriety,  but 
satisfied  if  their  efforts  meet  with  success.  There  may 
also  be  in  their  minds  a  tinge  of  fear  that,  should  they 
commit  themselves  to  technical  articles  in  the  press,  their 
co-workers  may  suspect  them  of  an  assumption  of  supe- 
rior knowledge  to  which  they  in  no  way  wish  to  lay  claim. 
But,  unfortunately,  the  greatest  cause  for  silence  would 
appear  to  be  the  refusal  by  directors  of  mining  companies 
and  of  companies  holding  patent  rights  to  allow  their 
officers  to  communicate  publicly  the  results  of  their  re- 
searches in  the  laboratory  or  mill.  *  *  * 

A  composite  of  the  comment  of  these  prominent  technical 
journals  and  the  opinions  of  the  eminent  engineers  which  I 
have  quoted,  is  undoubtedly  an  affirmative  answer  to  the  ques- 
tion, "Has  the  attitude  of  Minerals  Separation  retarded  the 
development  of  flotation  concentration?"  which  forms  the  title 
of  this  paper,  but  if  any  further  answer  be  desired  it  may  be 
found  in  the  air  of  hostility  and  the  profane  emphasis  of 
antagonism  which  meets  the  very  mention  of  the  name  of 
Minerals  Separation  in  the  mining  camps  of  the  West. 


570  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 


PARTICULAR    PRACTICES     OF     MINERALS     SEPARATION 
WHICH  MINING  MEN  HAVE  CRITICIZED 

By  GEORGE  L.  NYE,  Attorney,  Denver,   Col. 

The  day  of  the  bonanza  is  gone;  grass-roots  deposits  are 
no  longer  found ;  fortunes  made  over  night  no  longer  occur  in 
metal  mining;  shipments  of  high-grade  mineral  direct  to  the 
smelter  have  given  way  to  the  concentrating  mill;  and  metal 
mining  has  developed  into  an  industry  where  economical 
treatment  of  large  tonnages  of  low-grade  material  and  the 
elimination  of  waste  are  the  important  features. 

The  evolution  of  the  industry  has  naturally  resulted  in 
focusing  the  attention  of  experts  upon  the  subject  of  "metallic 
waste."  The  evolution  of  mining  has  naturally  produced  a 
corresponding  evolution  in  the  manner  of  ore  dressing  and 
ore  concentration. 

Experimenters  and  investigators  have  been  steadily  in  the 
field,  and  as  far  back  as  1884  they  were  seeking  to  take  advan- 
tage of  the  well-known  affinity  between  metallic  particles  and 
oily  substances,  plus  the  buoyancy  of  oil  in  water,  as  a  means 
of  separating  metal  from  gangue.  Experiments  and  investi- 
gations were  constant  and  widespread,  but  no  satisfactory 
process,  that  is,  none  that  was  at  the  same  time  both  efficient 
and  economical,  had  developed  until  15  or  16  years  ago,  when 
four  processes  came  into  commercial  use  at  practically  the 
same  time  in  the  Broken  Hill  district  of  Australia. 

In  1907  and  1908  these  four  processes  (R.  1460,  Hoover) 
were  in  operation  and  were  commercially  successful.  They 
were  known  as  the  Potter-Delprat,  the  De  Bavay,  the  Min- 
erals Separation  and  the  Elmore  vacuum  processes. 

The  Potter-Delprat  process,  since  acquired  by  Minerals 
Separation,  consisted  (in  a  general  way)  in  the  introduction 
of  a  fine  ore  pulp  into  a  pointed  box  containing  hot  sulphuric 
acid  or  hot  salt  cake  solution.  There  was  a  resulting  reaction 
on  the  calcium  carbonate  in  the  material,  producing  a  great 
quantity  of  bubbles  which  attached  themselves  to  the  sulphide 
particles  and  raised  them  to  the  surface  in  a  thick  coherent 
froth. 

The  De  Bavay  process  made  use  of  the  "floating  greased- 


MINERALS  SEPARATION  AND  FLOTATION  571 

needle"  idea,  but  instead  of  making  a  coherent  froth  there 
was  a  thin  film  of  mineral  particles  floated  off  the  top  of  the 
vessel. 

In  the  Elmore  vacuum  process  the  material  to  be  treated 
was  thoroughly  mixed  with  water,  oil  and  acid,  and  the  com- 
bination was  then  sucked  up  into  the  apparatus  by  a  suction 
pump.  The  suction  released  the  pressure  of  the  pulp,  with 
the  result  that  nearly  all  the  oil  dissolved  in  the  water  escaped 
the  solution  in  the  form  of  bubbles  which  attached  themselves 
to  the  sulphide  particles  and  raised  them  to  the  surface  in  the 
form  of  a  thick  coherent  froth.  In  some  instances,  calcium 
carbonate  was  added  to  the  material. 

In  1905  the  Sulman,  Picard  and  Ballot  patent,  which  formed 
the  basis  of  the  process  being  operated  by  Minerals  Separa- 
tion, was  taken  out  in  England.  The  same  process  was 
patented  in  the  United  States  in  1906,  and  is  known  as  No. 
835,120,  being  the  patent  litigated  in  the  now  celebrated  Hyde 
case. 

In  1905,  1906  and  1907,  although  the  processes  mentioned 
were  commercially  operating  in  Australia,  but  little  was 
known  about  them  in  the  United  States,  and  it  was  not  until 
after  the  patent  application  of  Sulman,  Picard  and  Ballot, 
which  later  became  patent  835,120.  was  applied  for  that  the 
use  of  oil  flotation  as  a  commercial  method  of  ore  concentra- 
tion was  introduced  into  the  United  States.  The  interest 
aroused  was  immediate  and  widespread,  but  the  development 
of  the  art  and  its  application  to  commercial  uses  was  not  at 
all  in  accord  with  either  its  possibilities  or  its  opportunities. 

Mining  men  the  country  over  have  been  free  to  criticise 
the  policy  and  practices  of  those  controlling  the  fundamental 
patents,  who  apparently  have  been  desirous  of  commercial- 
izing their  ownership,  while  preserving  their  knowledge  and 
information  as  trade  secrets. 

In  taking  this  attitude  the  patent  owners  have  entirely  lost 
sight  of  the  fundamental  basis  for  the  patent  laws  of  the 
United  States,  found  in  the  constitutional  grant  of  legislative 
power  to  Congress  in  the  following  language: 

"To  promote  the  progress  of  science  and  the  useful 
arts  by  securing  for  limited  terms  to  authors  and  in- 
ventors the  exclusive  right  to  their  respective  writings 
and  discoveries." 


572  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 

Referring  to  this  constitutional  provision,  the  Circuit 
Court  of  Appeals  of  the  Third  Circuit  in  National  Harrow 
Co.  vs.  Hench,  83*  Fed.  36,  said : 

"It  is  no  part  of  the  constitutional  scheme  or  of  the 
scheme  of  the  patent  laws  to  secure  to  inventors  a  profit 
from  the  suppression  of  their  creations." 

In  proceeding  contrary  to  the  spirit  and  intent  of  the  con- 
stitutional and  statutory  provisions  as  interpreted  by  our 
courts,  Minerals  Separation  has  resorted  to  many  practices 
criticised  and  condemned  by  the  mining  fraternity. 

These  practices  may  be  summed  up  as  follows : 

It  has  suppressed  technical  information,  thus  retarding  the 
development  of  the  art. 

It  has  made  indiscriminate  charges  of  infringement  and 
has  failed  at  the  same  time  in  many  instances  to  point  out  any 
infringement. 

It  has  required  independent  inventors  and  manufacturers 
to  pay  commissions  on  sales  of  their  own  apparatus. 

It  has  discriminated  unfairly  in  royalty  charges,  has 
charged  and  is  charging  excessive  royalties  and  seeking  to 
fasten  such  royalties  upon  the  operator  beyond  the  life  of  its 
patents. 

It  has  made  excessive  claims  to  flotation  rights,  falsely 
disparaged  independent  apparatus  and  threatens  lawsuits  to 
coerce  operators  to  sign  a  license  contract. 

It  compels  engineers  in  its  employ  to  sign  illegal  and 
iniquitous  contracts,  and  requires  licensees  and  their  employes 
to  assign  their  inventions  to  it. 

It  has  injected  spies  and  hirelings  into  the  plants  of  opera- 
tors refusing  to  take  out  a  license,  and  it  has  violated  the 
criminal  laws  by  breaking  and  entering  the  premises  of  an- 
other, and  threatens  to  continue  such  practices,  justifying  its 
actions  by  its  alleged  necessities. 

Suppression  of  Technical  Information  and  Retarding  the  Art 

In  1909  and  1910  there  was  a  great  scarcity  of  information 
concerning  flotation,  even  in  London,  where  the  process  was 
supposed  to  have  been  invented  some  four  or  five  years  earlier 
(R.  1624-40). 

At  the  office  of  Minerals  Separation  it  was  stated  that  they 


MINERALS  SEPARATION  AND  FLOTATION  573 

did  not  care  to  give  out  information.  There  were  no  books 
on  the  subject,  and  the  practice  of  the  art  was  shrouded  in 
secrecy. 

When  Mr.  Theodore  J.  Hoover  sought  to  publish  his  book, 
he  was  violently  opposed  by  Minerals  Separation,  which,  how- 
ever, later  gave  a  reluctant  consent  and  the  book  finally  came 
out,  minus  certain  excisions  insisted  on  by  Minerals  Separa- 
tion (R.  1642-3).  The  excisions,  according  to  Mr.  Ballot, 
were  considered  necessary  in  the  company's  commercial  inter- 
ests (R.  563).  Private  profit  had  even  then  begun  to  out- 
weigh public  interest  in  the  prosecution  of  science  and  the 
useful  arts. 

Dr.  Gregory  sugar-coats  the  pill  by  calling  it  "self-protec- 
tion." He  says  (R.  621-2-3) : 

"I  am  looking  at  it  purely  from  a  moral  standpoint. 
I  would  say  it  was  an  absolute  dereliction  of  duty  on  my 
part  if  I  allowed  any  employe  of  ours  to  go  and  ruin  the 
prospect  of  a  company  just  because  he  wanted  to  air  his 
views." 

He  adds,  however,  that  in  some  instances: 

"Where  we  have  been  able  to  satisfy  ourselves  that  it 
would  be  innocuous  we  have  allowed  it  (the  publication 
of  information),  but  it  has  done  us  harm,  nevertheless." 

Mr.  John  Ballot,  president  of  Minerals  Separation  (R.  561- 
565),  says: 

"Our  policy  is  thus:  With  a  company  developing  and 
exploiting  patented  processes,  we  have  licensees  using 
these  processes,  and  we  are  obligated  to  pass  improve- 
ments and  inventions  on  to  licensees  for  use.  We  are 
not  satisfied  with  the  finality  of  our  process  as  an  inven- 
tion ;  apart  from  exploiting  the  processes  commercially 
we  also  try  to  improve  them  to  make  them  still  more  use- 
ful. Our  business,  therefore,  is  of  a  secret  nature.  If 
we  permitted  our  staff  members  to  write  papers  and 
discuss  things  publicly,  what  possible  chance  would  there 
be  for  us  to  develop  our  patents?" 

In  other  words,  for  the  sole  purpose  of  facilitating  private 
commercial  exploitation  of  a  patent  right,  Minerals  Separa- 
tion suppresses  all  information  which  might  be  used  as  a 
starting  point  for  further  development  of  the  art  by  any  one 
of  a  thousand  brains  outside  its  employ. 


,174  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

All  this  in  the  face  of  the  fact  that  it  has  been  the  settled 
law  of  this  country  ever  since  the  decision  of  the  Supreme 
Court  of  the  United  States  in  Pennock  vs.  Dialogue  (2 
Peters  1)  : 

"That  the  primary  purpose  of  our  patent  laws  is  not 
the  creation  of  private  fortunes  for  the  owners  of  patents, 
but  is  to  promote  the  progress  of  science  and  the  useful 
arts." 

Dr.  Gregory  admits  (R.  624-5)  that: 

"There  is  no  authoritative  work  on  flotation,  either  in 
America,  England  or  Australia ;  no  book  on  flotation  that 
I  would  consider  an  authority/' 

If  any  further  proof  of  the  desire  and  effort  of  Minerals 
Separation  to  suppress  information  be  required,  it  is  found 
in  the  fact  that  some  years  ago  when  an  editor  [T.  A.  Rickard] 
was  about  to  print  an  interview  with  a  prominent  metallur- 
gist [Charles  Butters] ,  formerly  a  licensee  of  Minerals  Separa- 
tion, the  latter's  chief  engineer  threatened  "to  raise  a  red  flag" 
if  such  publication  was  not  suppressed.  When  crowded  for  a 
reason  for  his  attitude,  his  only  answer  was  that  the  author 
said  something  about  the  treatment  of  concentrates  by  chlori- 
dizing,  roasting  and  leaching,  and  he  was  thinking  of  taking 
out  a  combination  patent  for  that  himself. 

Of  course,  everyone  at  all  familiar  with  the  industry  knows 
that  such  methods  of  treatment  had  been  almost  in  common 
use  for  more  than  a  quarter  of  a  century. 

That  this  attitude  of  Minerals  Separation  has  unquestion- 
ably retarded  the  advancement  of  the  art  is  affirmed  and 
asserted  by  practically  every  mining  man  and  mill  man  who 
has  come  at  all  in  contact  with  the  situation. 

A  well-known  San  Francisco  editor,  himself  an  engineer  of 
wide  experience,  says  (R.  1650-51)  referring  to  the  advance- 
ment of  the  art  in  this  country: 

"It  has  been  extremely  slow  considering  the  im- 
portance of  it.  The  progress  of  the  art  in  this  country 
has  been  retarded  by  the  attempt  to  impose  secrecy  upon 
the  experiments  and  the  operations  of  those  using  the 
process  by  means,  of  course,  of  these  license  agreements 
and  other  methods,  but  more  particularly  by  the  effort  to 
tie  individual  metallurgists  to  the  chariot  wheels  of  this 
patent-exploiting  agency.  *  *  *  " 


MINERALS  SEPARATION  AND  FLOTATION  575 

Government  officials  connected  with  the  Bureau  of  Mines 
express  it  as  their  opinion  (R.^2067  and  R.  2395-6)  after  years 
of  experience  and  careful  observation  that  the  attitude  of 
Minerals  Separation  has  been  to  retard  the  development  of 
the  flotation  art. 

One  Bureau  of  Mines  man  (R.  2053-65)  has  observed  and 
noted  a  number  of  instances  where  mining  companies  have 
refused  to  consider  an  additional  saving  by  the  installation 
of  flotation  because  of  the  repressive  tactics  practiced  and  the 
license  agreement  tendered  by  Minerals  Separation. 

Infringement 

In  one  thing  at  least  Minerals  Separation  has  at  all  times 
dealt  with  lavish  hand,  that  is,  in  its  indiscriminate,  whole- 
sale charges  of  infringement.  The  company 's  own  records 
show  that  it  has  carried  in  its  "infringement  file"  hundreds 
of  operators,  individual  and  company,  who  have  never  used 
flotation  at  all,  and. in  some  instances  concerns  that  have  not 
even  had  a  mill  on  their  property. 

Their  chief  engineer  admits  that  they  get  most  of  their 
information  concerning  infringement  from  the  technical  press 
and  casual  information.  (R.  1240,  647) .  This  information 
is  passed  on  to  patent  attorneys  who  send  out  notices  of 
infringement  and  threats  of  suit  without  further  proof  of  the 
fact  (R.  1248).  This  same  engineer  admits  that  not  nearly 
all  of  those  listed  as  infringers  are  actually  operating  flota- 
tion (R.  1268-9,  1275-1278). 

Apparently  the  plan  was  not  only  to  reach  the  actual  opera- 
tor, but  to  throw  a  fear  into  the  prospective  operator  at  the 
same  time. 

The  "holier  than  thou"  attitude  of  Minerals  Separation  is 
well  disclosed  by  the  statement  of  its  engineer  (R.  1212-13-14) 
in  referring  to  the  actions  of  the  manager  of  a  certain  com- 
pany who,  he  says : 

"Came  and  said  that  they  wanted  to  take  a  license  with 
us  and  settle  up  for  their  sins/' 

And  adds: 

"He  was  sinning  against  the  law  of  using  flotation 
illegally.  His  statement  was  the  result  of  a  letter  which 
Mr.  Henry  D.  Williams  sent  around  generally  to  those  on 
the  list.  They  were  our  list  of  infringers." 


57(5  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 

These  threatening  letters  from  Henry  D.  Williams  were 
sent  to  experimenters  (Westcott,  R.  1860),  to  those  using  the 
Callow  process  (R.  1894,  Lambourne)  and  to  those  operating 
outside  the  limits  of  patent  right  awarded  in  the  Hyde  case 
(Hollister,  R.  2330-31).  Similar  threats  were  made  by  repre- 
sentatives in  personal  interviews  (R.  1894-2395),  yet  so  far 
as  we  have  been  able  to  ascertain  the  threats  were  all  based 
upon  the  broad  and  all-inclusive  proposition  that  Minerals 
Separation  controls  flotation. 

The  chief  engineer  says  (R.  1152)  : 

"The  scope  of  our  patent  has  been  discussed  by  me 
with  inf ringers  in  a  general  way,  in  that  I  told  them  that 
our  patents  covered  the  commercial  use  of  flotation,  and 
that  we  proposed  to  enforce  our  patents.  *  *  *  Ad- 
vice to  field  men  has  been  in  a  general  way  that  people 
using  flotation  are  probably  infringers." 

He  also  says  (R.  1247)  : 

"Our  investigators  went  to  the  operators  and  obtained 
information.  They  did  not  report  what  patent  was  being 
infringed.  They  haven't  any  idea  of  patents.  We  have 
these  operators  down  on  our  infringing  list.  *  *  * 
The  elements  entering  into  flotation  process  which,  in 
general,  infringe  our  patents  are  agitation  and  aeration, 
and  the  use  of  oil  and  other  reagents  with  the  formation 
and  operation  of  froth,  all  in  an  ore  pulp  containing 
mineral  values." 

One  of  Minerals  Separation's  field  representatives  admits 
that  in  many  instances  (R.  1828-35)  neither  the  apparatus  nor 
the  reagents  used  were  disclosed,  and  yet  the  operators  were 
classed  as  infringers. 

The  former  manager  of  the  Midvale  Minerals  Co.  in  Utah 
reports  (R.  1877)  that  the  representative  of  Minerals  Separa- 
tion who  called  on  him  "got  into  the  subject  of  infringement 
immediately." 

"He  did  not  state  or  point  out  in  any  way  whatever  the 
manner  in  which  we  were  infringing,  but  claimed 
infringement  merely  by  use  of  flotation.  He  (R.  1885) 
talked  about  suits  that  Minerals  Separation  had  brought 
against  other  parties,  and  was  careful  to  state  that  all  of 
them  had  been  decided  in  favor  of  Minerals  Separation." 


MINERALS  SEPARATION  AND  FLOTATION  577 

Another  mine  manager  was  informed  (R.  1897)  that  the 
company  was  going  to  give^the  smaller  operators  their  due 
later  on. 

Still  a  third  (R.  1954)  was  told  that  suits  were  being 
brought  on  other  points  than  the  amount  of  oil  used,  and  that 
after  the  decision  of  the  Supreme  Court  Minerals  Separation 
was  "going  after  the  protection  of  th,eir  rights." 

Another  manager,  using  more  than  1  per  cent,  of  oil  on  the 
ore  (R.  2326)  was  told  that  he  was  infringing.  The  repre- 
sentative did  not  say  how, 'but  insisted  that  flotation  could 
not  be  used  without  infringing  Minerals  Separation  patents. 

I  have  given  a  few  of  the  instances  where  wholesale  charges 
of  infringement  without  specification,  and  threats  of  litiga- 
tion without  actual  suits,  have  been  used  apparently  to  intimi- 
date and  frighten  the  small  operator. 

Independent  Inventors  and  Manufacturers 

Another  branch  of  the  "exploiting"  business  upon  which 
Minerals  Separation  embarked  originally  with  great  eclat 
was  that  of  requiring  independent  inventors  and  manufac- 
turers to  pay  commissions  on  sales  of  their  own  apparatus. 
True  it  is  that  this  practice  has  now,  in  the  main,  been  aban- 
doned, but  the  facts  concerning  its  pursuit  while  it  lasted  are 
interesting  and  extremely  illuminating  in  a  consideration  of 
the  acts  and  doings  criticised  by  the  mining  industry  upon 
which  this  patent-exploiting  agency  is  thriving. 

In  December,  1916  (R.  1358-78,  Exhibits  249-259,  inc.), 
the  Stimpson  Equipment  Co.,  handling  the  Janney  machine, 
designed  to  be  operated  in  flotation  concentration,  was  ad- 
vised by  a  prospective  purchaser  that  Minerals  Separation 
was  threatening  trouble  if  the  purchaser  put  Janney  machines 
into  operation.  This  naturally  caused  the  Stimpson  Equip- 
ment Co.  to  investigate  the  matter  and  to  request  that  the 
attitude  of  Minerals  Separation  be  disclosed. 

Later  Minerals  Separation  was  advised  that  the  prospective 
purchaser  was  one  of  their  licensees,  so  that  the  sale  could 
in  no  manner  contribute  to  infringement.  Stimpson  was 
informed,  however,  that  the  chief  engineer  would  see  him  on 
his  way  West,  and  later  was  requested  to  meet  the  engineer 
at  Ogden,  Utah.  The  meeting  occurred,  and  the  engineer 
then  tendered  to  Mr.  Stimpson  a  memorandum  of  a  proposed 


578  PROCEEDINGS  OF  AMERICAN   MINING  CONGRESS 

contract  that  might  be  entered  into  between  Stimpson  Equip- 
ment Co.  and  Minerals  Separation  regarding  the  sale  of  Jan- 
ney  machines.  The  memorandum  was  handed  to  Mr.  Stimp- 
son (Ex.  250). 

This  memorandum  is  one  of  the  most  astounding  documents 
that  has  ever  found  its  way  into  print.  It  provides  that 
Stimpson  shall  have  the  right  to  sell  the  Janney  machine  to 
Minerals  Separation's  licensees,  but  requires  that  he  agree 
not  to  sell,  rent  or  lease  any  flotation  machine  except  to  such 
licensees.  It  stipulates  that  Minerals  Separation  must  have 
a  contract  enforceable  by  injunction,  and  that  it  (Minerals 
Separation)  shall  become  sole  licensee  to  sell  the  Janney  ma- 
chines, but  that  it  will,  in  turn,  appoint  the  Stimpson  Com- 
pany selling  agent.  It  stipulates  that  orders  for  Janney 
machines  must  be  certified  by  Minerals  Separation  before 
machines  are  shipped,  and  requires  that  it  receive  25  per  cent, 
of  the  gross  profit  made  between  net  manufacturing  cost  and 
selling  price. 

Naturally  such  a  contract  was  not  acceptable  to  the  Stimp- 
son Equipment  Co.,  and  after  objection  and  considerable 
correspondence  a  new  form  of  contract  was  submitted,  which 
Minerals  Separation's  chief  engineer  declared  would  not  vio- 
late the  anti-trust  laws,  but  this  contract  contained  a  provi- 
sion for  a  heavy  penalty  in  the  event  that  any  machines  manu- 
factured by  the  Stimpson  Company  were  used  in  infringement 
of  Minerals  Separation's  process  patents. 

In  other  words,  the  effect  of  the  penalty  was  to  close  the 
door  to  any  customers  for  the  Stimpson  Equipment  Co.,  ex- 
cept licensees  of  Minerals  Separation.  The  proposed  contract 
was  not  signed. 

Jackson  Pierce,  another  machine  manufacturer,  was  told 
by  the  engineer,  E.  H.  Nutter,  that  anyone  who  used  one  of  his 
machines  and  infringed  would  make  him  (Pierce)  liable 
(R.  2296).  Pierce  refused  to  sign  the  contract  submitted, 
objecting  to  the  clause  requiring  payment  of  10  per  cent,  of 
the  selling  price  to  Minerals  Separation  and  fixing  a  liability 
of  $10,000  in  the  event  that  any  Pierce  machine  was  used  in 
infringing  operations. 

A  similar  contract  was  offered  to  Mr.  Ruth,  another  manu- 
facturer. It  was  stated  at  the  time  by  the  chief  engineer 
that  the  contract  was  the  standard  form  (R.  2410) ,  and  that 


MINERALS  SEPARATION  AND  FLOTATION  579 

he,  Ruth  (R.  2414) ,  was  not  only  an  inf  ringer,  but  worse  than 
an  infringer,  for  he  was  "furnishing  the  brains  for  other  men 
to  infringe  with."  Ruth  was  also  told  that  he  was  making  a 
living  illegitimately  (R.  2417). 

Royalty  Charges 

In  February,  1915,  the  assignor  of  Minerals  Separation 
North  American  Corporation,  entered  into  a  special  contract 
with  the  Anaconda-Inspiration  interests,  and  in  June,  1916, 
special  royalty  terms  were  given  to  the  Colusa  Parrot  Mining 
&  Smelting  Co.,  because  the  quality  of  its  dumps,  the  low 
recovery  and  the  narrow  margin  of  profit  to  the  company 
made  such  terms  equitable  in  the  opinion  of  the  assignor 
(R.  501). 

A  special  agreement  was  also  made  with  the  St.  Joseph 
Lead  Co.,  the  Doe  Run'  Lead  Co.  and  the  Desloge  Consolidated 
Lead  Co.  (R.  905). 

Dr.  Gregory  explains  (R.  908)  that  the  licenses  issued  to 
these  particular  companies  were  special,  because  containing 
a  condition  that  they  would  pay  a  certain  sum  whether  they 
treated  ores  or  not. 

President  John  Ballot  (R.  513)  explains  that  in  the  instance 
of  the  Colusa  Parrot  Company  the  contract  provided  for  a 
royalty  of  6  cents  for  20  pounds  of  copper  recovered  and  that 
his  company  rebated  3  cents.  He  says  (R.  515)  : 

"We  merely  agreed  to  leave  the  license  as  it  was,  the 
license  taken  up  at  a  certain  rate  of  royalty.    As  the  roy- 
alty was  paid  and  payable  we  refunded  half  of  it  to  the 
owner.     The  agreement  was  probably  oral,  at  most  an 
, ...     exchange  of  letters/' 

It  is  stated  (R.  537)  that  Minerals  Separation,  in  settling 
with  infringers,  has  adopted  the  policy  of  charging  the  in- 
fringer who  somes  to  the  office  and  confesses  infringement 
double  the  amount  he  would  have  paid  if  he  had  taken  out  a 
license;  then  after  he  had  paid  for  past  infringements  he  is 
treated  and  put  on  the  same  basis  as  everybody  else  who  has 
a  standard  form  of  license — he  cannot,  however,  get  the  Ana- 
conda agreement. 

This  was  the  attitude  and  stand  upon  which  Minerals  Sepa- 
ration in  August,  1915,  tried  to  avoid  a  previous  agreement 
with  Utah  Leasing  Co.,  saying  (Ex.  303,  Ex.  p.  2242)  : 


580  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 

"The  London  Board  refuse  to  agree  to  the  6-cent  mini- 
mum royalty  *  *  *  and  insist  that  this  material 
pays  a  flat  royalty  of  12  cents  per  ton.  This  on  account 
of  the  fact  that  to  grant  you  this  6-cent  minimum  would 
jeopardize  our  contract  with  the  Anaconda  Company." 

And  yet  in  November,  1915,  a  special  contract  was  granted 
the  St.  Joseph  Lead  Co.,  the  Doe  Run  Lead  Co.  and  the  Des- 
loge  Consolidated  Lead  Co.,  "with  the  consent  of  London," 
which  was  "the  identical  terms  accorded  Anaconda  in  their 
license  and  private  agreement." 

It  also  appears  that  for  several  years  Minerals  Separa- 
tion was  charging  one  company  50  cents  per  ounce  of  gold 
recovered  by  flotation  concentration  and  another  company 
using  substantially  the  same  methods  and  treating  substan- 
tially the  same  character  of  material  during  the  same  interval 
was  charged  25  cents  per  ounce. 

It  must  have  been  punishment  or  special  privilege,  one  or 
the  other. 

Excessive  Royalties 

There  can  be  no  question  but  that  the  royalties  charged 
by  Minerals  Separation  are  excessive.  They  are  in  prac- 
tically every  instance  based  upon  metallic  recovery.  In  other 
words,  upon  gross  recovery  upon  ores  treated. 

In  one  instance  a  company  during  its  operations  in  1917 
made  a  handsome  profit,  about  $550,000,  and  paid  Minerals 
Separation  a  royalty  of  $18,652.  The  following  year  the 
same  company  made  a  profit  of  $50,000  and  paid  Minerals 
Separation  $30,000  in  royalties.  The  third  year  the  same 
company  suffered  a  loss  of  $70,000,  but  nevertheless  paid  Min- 
erals Separation  $32,800. 

If  the  fees  paid  for  the  use  of  a  process  bore  some  rela- 
tion to  the  net  amount  of  profit  made  by  the  operator,  they 
might  show  some  elements  of  fairness,  but  when  charges  are 
made  upon  a  basis  such  that  Minerals  Separation  gets  its 
profit  when  the  use  of  its  process  contributes  to  a  loss  upon 
the  part  of  the  operator,  as  well  as  when  he  makes  a  profit, 
there  is  something  unfair  and  inequitable,  if  not  illegal  and 
illegitimate,  in  the  royalty  charges. 

Field  engineers  for  Minerals  Separation  have  repeatedly 


MINERALS  SEPARATION  AND  FLOTATION  581 

reported  (R.  1766-1832-3)  that  operators  protested  royalties 
as  excessive. 

Mining  operators  all  over  the  West  (R.  1917-1952-2062- 
2063  and  Ex.  352-2064-2290-2293-2312-2455-2471)  protest  the 
excessive  royalty  charges,  characterizing  them  as  prohibitive, 
and  in  many  instances  refrain  from  using  the  process  because 
of  such  charges. 

In  one  instance,  after  holding  out  the  prospect,  if  not  actu- 
ally promising,  a  royalty  of  4  cents  per  ton  of  tailings  treated, 
Minerals  Separation  demanded  6  cents  per  ton,  and  after 
tendering  a  contract  upon  that  basis  and  selling  to  the  pro- 
spective licensee  Minerals  Separation  flotation  machines, 
which  the  licensee  fully  paid  for,  later  demanded  a  flat  royalty 
of  12  cents  per  ton  upon  the  statement  that  a  minimum  of 
6  cents  would  jeopardize  their  contract  with  the  Anaconda 
Company. 

The  licensee  refusing  to  be  boosted  a  second  time,  Miner- 
als Separation  took  the  high-handed  procedure  of  refusing 
to  deliver  to  the  licensee  the  machines  which  it  had  bought 
and  paid  for  as  a  coercive  measure  to  produce  an  acqui- 
escence in  an  extorionate  royalty.  In  this  they  were  entirely 
unsuccessful  (R.  2097  et  seq.  Witness  Strange  and  Ex.  275 
to  345). 

The  matter  finally  wound  up  with  the  most  astounding  sug- 
gestion from  the  representative  of  Minerals  Separation, 
namely,  that  the  licensee  should  sign  both  the  6-cent  and  the  12- 
cent  agreement,  submit  them  both  to  Minerals  Separation  for 
a  decision,  and  entrust  themselves  and  their  contract  to  a 
concern  which  was  then,  in  violation  of  decency  and  fair  deal- 
ing, withholding  the  machinery  which  the  prospective  licensee 
had  bought  and  paid  for. 

Is  it  any  wonder  that  the  licensee  brought  a  replevin  pro- 
ceeding to  obtain  possession  of  its  own,  and  that  Minerals 
Separation  ultimately  failed  in  its  attempted  holdup? 

Under  the  terms  of  the  license  contract  put  out  by  Minerals 
Separation,  every  licensee  is  bound  not  only  to  give  every 
invention  or  discovery  made  during  operations  under  the 
license  to  Minerals  Separation,  but  to  bind  its  employes  to 
assign  and  transfer  any  such  discovery  or  invention.  The 
licensee  also  agrees  that  he  will  not  without  the  written  con- 
sent of  Minerals  Separation  during  the  continuance  of  the 


582  PROCEEDINGS   O'P   AMERICAN   MINING   CONGRESS 

license  use  or  employ  any  improvement,  modification  or  addi- 
tion to  any  of  the  inventions  specified  in  the  letters  patent 
within  the  license  which  is  not  the  property  of  Minerals  Sepa- 
ration. 

Dr.  Gregory,  referring  to  the  contract  of  the  licensees,  says 
(R.  580) : 

"Now,  coming  back  to  the  contract,  as  I  said  before, 
one  had  difficulty  in  that  direction,  because  it  was  con- 
sidered that  this  contract  never  terminated,  but  when  I 
explained  to  them  that  this  was  merely  an  option,  and  if 
you  used  the  process  you  paid,  and  if  you  did  not  use  the 
process  you  were  as  good  as  not  having  a  contract  at  all — 
there  was  no  objection  of  any  kind.  We  simply  made  the 
contract  and  said.  'Now,  go  ahead ;  if  you  find  it  conveni- 
ent to  use  the  process,  you  pay  us  a  royalty/  The  agree- 
ment terminates  upon  their  ceasing  to  use  flotation,  and 
it  commences  again  when  they  start  to  use  it." 

In  other  words,  when  once  signed,  the  contract  is  perpetual, 
and  extends  the  payment  of  royalties  beyond  the  life  of  the 
patent  right. 

The  charge  of  exacting  excessive  royalties  was  confessed 
by  Chief  Engineer  Nutter  when  he  wrote  to  Minerals  Separa- 
tion in  March,  1917: 

"I  am  becoming  more  and  more  convinced  that  our 
royalties  are  too  high,  and  am  getting  together  data 
which,  I  think,  will  show  that  we  are  losing  out  financially 
through  charging  a  royalty  which  is  considered  too  high. 
The  only  argument  that  I  can  see  is  that  by  maintaining 
our  present  position  we  can  hold  the  Butte  and  Superior 
Company  up  for  more  than  we  otherwise  might." 

Excessive  Claims  of  Flotation  Rights 

The  chief  engineer  of  Minerals  Separation  thinks  (R.  1156) 
that  "any  use  of  oil  infringes  Minerals  Separation  patents/' 
"All  users  of  flotation  (R.  1160)  are  infringers,"  or  (R.  1144) 
"probable  infringers." 

He  told  Manager  Martin  of  the  Ozark  Company  (R.  1178) 
that  Minerals  Separation  patents  covered  "flotation  process," 
that  is,  all  manner  of  flotation  concentration.  He  keeps  all 
those  using  flotation  on  the  infringers'  list  (R.  1129)  upon 
the  general  theory  that  they  could  not  be  using  flotation  in  a 
commercial  way  without  infringing,  and  says  (R.  1267)  that 


MINERALS  SEPARATION  AND  FLOTATION  583 

it  is  practically  impossible  to  use  oil  in  flotation  concentra- 
tion without  infringement.  Furthermore  (R.  1230)  he  re- 
gards all  manufacturers  of  machines  as  contributory  infrin- 
gers. 

In  talking  with  Jackson  Pierce,  who  was  himself  the  manu- 
facturer of  a  machine  for  use  of  flotation,  Chief  Engineer 
Nutter  said : 

"You  are  furnishing  the  brains  for  other  men  to  in- 
fringe with.  If  they  hadn't  the  flotation  machine  they 
couldn't  infringe,  and  that  would  eliminate  them.  I  sup- 
pose you  are  aware  of  the  fact  that  our  patents  control 
any  number  of  them.  Our  patents  carry  us  up  into  the 
year  1935,  and  for  fellows  like  you  who  are  making  flota- 
tion machines,  we  have  a  contract  whereby  you  can  manu- 
facture without  infringing." 

He  then  offered  Mr.  Pierce  a  contract  similar  to  that  pro- 
posed to  the  Stimpson  Equipment  Co.,  requiring  that  he  only 
sell  his  machines  to  Minerals  Separation  licensees  and  pay 
them  10  or  20  per  cent  of  the  selling  price  for  the  privilege  of 
being  thus  restricted  in  his  market. 

Falsely  Disparaging  Independent  Apparatus 

One  of  the  methods  formerly  in  use  by  Minerals  Separa- 
tion to  coerce  the  manufacturer  of  independent  flotation  ma- 
chines and  compel  them  to  come  in  and  transfer  all  their 
rights  to  Minerals  Separation  and  take  in  return  a  mere  sell- 
ing agent's  contract  was,  to  use  an  ordinary  expression,  to 
"knock"  such  apparatus  and  in  every  way  to  disparage  the 
same  in  the  minds  of  prospective  purchasers. 

When  the  Engels  Copper  Co.  late  in  1916  and  early  in  1917 
(R.  1416)  was  thinking  of  installing  Janney  machines,  the 
representative  of  Minerals  Separation  advised  the  president 
of  the  Engels  Copper  Co.  that  before  he  installed  Janney  ma- 
chines he  must  procure  the  consent  of  Minerals  Separation, 
frankly  stating,  however,  that  he  did  not  think  that  the 
operator  could  get  such  consent.  When  asked  what  would 
happen  if  the  operator  went  ahead  without  the  consent,  the 
reply  was  that  very  possibly  his  license  would  be  revoked. 

In  another  instance,  one  of  Minerals  Separation's  own  rep- 
resentatives in  the  field,  in  calling  upon  an  operator  engaged 
in  installing  independent  apparatus,  had  "instilled  doubt  in 


584  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

his  mind  that  the  Hyde  machine  which  he  is  installing  in  one 
of  his  mills  would  do  the  work"  (Ex.  157,  Ex.  p.  1476). 

In  yet  another  instance,  the  Ohio  Copper  Co.  in  Utah  was 
using  flotation.  They  had  installed  a  Janney  machine,  and 
had  had  the  same  in  operation  about  60  days  before  a  Min- 
erals Separation  machine  was  installed.  The  mill  was  treat- 
ing copper  ores,  which  in  solution  naturally  corroded  any 
metallic  iron  with  which  they  came  in  contact.  The  Janney 
machine  was  of  metallic  construction,  and  at  the  end  of  60 
days  was  naturally  less  efficient  in  operation  than  when  new. 
After  the  Minerals  Separation  machine  was  installed,  the  two 
machines  were  operated  concurrently,  and,  of  course,  a  record 
of  the  results  was  kept.  Alfred  Frank,  the  manager  of  the 
Ohio  Copper  Co.  (R.  2557),  states:  "I  did  not  consider  there 
was  any  definite  period  during  which  there  was  a  test."  Not- 
withstanding this  situation  Minerals  Separation  attempted 
to  make  capital  and  to  disparage  the  work  of  the  Janney 
machine  by  circulating  unfair  comparative  results  in  opera- 
tion (R.  1691-4),  and  this  in  the  face  of  the  fact  that  the 
manager  of  the  Ohio  Copper  Co.  states:  "The  Janney  ma- 
chines did  slightly  better  metallurgical  work." 

Minerals  Separation  representatives  have  repeatedly  pro- 
claimed the  desire  to  be  of  assistance  to  operators,  and  always 
use  that  as  an  introductory  statement  in  approaching  anyone 
thought  to  be  infringing,  but  their  ardor  to  be  of  assistance 
cools  rapidly  after  a  license  is  taken  out,  and  actual  help  is 
often  entirely  missing. 

One  notable  instance  was  the  experience  of  the  Chicagoff 
Company  where,  after  repeated  efforts  (R.  1399-1402)  to  get 
help  from  Minerals  Separation,  they  gave  up  in  despair  and 
went  to  independent  experimenters,  who  quickly  gave  them  a 
solution  which  raised  their  savings  16  per  cent. 

Threatening  Lawsuits  to    Coerce  Operators 

Dr.  Gregory  says  very  plainly  (R.  601)  that  a  licensee  is 
insured  against  lawsuits.  The  inference  is  perfectly  obvious. 
Anyone  using  flotation  who  is  not  a  licensee  is  manifestly  in 
danger  of  litigation.  This  is  particularly  emphasized  in  a 
letter  sent  out  by  Minerals  Separation's  patent  attorney,  in 
which  he  stated : 


MINERALS  SEPARATION  AND  FLOTATION  585 

"You  are  hereby  notified  of  infringement  of  my  client's 
patents.  You  are  hereby  directed  to  send  me 

a  full  statement  of  your  infringing  operations.  *  *  * 
In  default  whereof  I  am  instructed  to  bring  suit  against 
you  for  an  injunction,  profits  and  damages,  including  a 
preliminary  injunction  at  the  commencement  of  the  suit 
to  immediately  stop  your  operations." 

According  to  the  statement  of  Minerals  Separation's  chief 
engineer,  such  a  letter  was  sent  out  to  250  or  300  operators 
when,  confessedly,  not  more  than  one-third  of  them  were  actu- 
ally infringing. 

One  of  the  field  representatives  on  one  occasion  called  upon 
the  Idaho  Mining,  Reduction  &  Transportation  Co.  at  Idaho 
Springs,  Colo.  (R.  1740).  This  enterprising  and  energetic 
young  man  stated  to  the  superintendent: 

"We  are  checking  up  the  infringers,  trying  to  keep 
them  out  of  metallurgical  difficulties  and  endeavoring  to 
get  them  to  come  in  and  take  out  a  license  to  avoid  any 
disagreeable  business  that  might  follow." 

This  representative  thereafter  very  naively  stated:  "He 
understood  that  meant  litigation." 

Another  instance,  that  af  the  East  Butte  Copper  Mining 
Co.,  after  receiving  the  threat  of  litigation  from  patent  coun- 
sel already  referred  to,  took  the  matter  up  (R.  2371-3)  with 
their  own  counsel,  and  reached  the  conclusion  that  they  could 
not  afford  to  get  into  a  fight  with  Minerals  Separation,  "not 
because  we  felt  they  were  in  the  right,  but  simply  as  a  matter 
of  expediency." 

Then  there  was  the  case  of  the  Evergreen  Mines  Co.  (R. 
2332),  absolutely  deterred  from  operation  by  threats  of  litiga- 
tion by  Minerals  Separation.  Their  property  today  is  lying  idle 
under  a  resolution  by  the  stockholders  of  the  company  to  the 
effect  that  they  will  not  reopen  the  property  and  commence 
active  operations  until  they  can  receive  fair  and  decent  treat- 
ment from  the  patent-exploiting  agency. 

Compelling  Engineers  in  Its  Employ  to  Sign  Illegal  and  Iniquitous 
Contracts 

Mr.  Theodore  J.  Hoover,  one  time  general  manager  for 
Minerals  Separation,  who  signed  one  of  their  engineer  em- 
ployes' contracts,  by  the  terms  of  which  Minerals  Separation 


586  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

seek  to  bind  the  engineers  to  them  not  only  during  the  period 
of  their  employment,  but  for  all  time,  characterized  the  per- 
petual obligation  contract  (R.  1585)  as  unjust,  immoral  and 
illegal. 

The  clause  of  the  contract  in  question  reads  (R.  1589 
Hoover,  Respondent's  Ex.  9)  : 

"He  shall  also  pledge  himself  to  keep  in  absolute  con- 
fidence all  information  acquired  regarding  the  company's 
business  and  processes  during  the  time  of  his  engagp 
ment,  and  also  afterwards." 

The  words  "and  also  afterwards"  constitute  the  particu- 
larly objectionable  features  of  the  contract. 

Hoover  says  (R.  1584)  that  his  career  has  been  hampered 
and  rendered  difficult  for  years  by  those  words  and  by  thp 
attempts  of  Minerals  Separation  to  enforce  them. 

Mr.  Hoover  finally  sought  and  obtained  the  opinion  of  emi- 
nent legal  counsel  to  the  effect  that  such  a  contract  wa- 
unjust,  immoral  and  illegal  (R.  1582) . 

Minerals  Separation  also  seek  to  stop  the  mouths  and  ham- 
per the  efforts  of  every  metallurgist  who  enters  the  employ  of 
a  licensee  by  forcing  upon  them  a  contract  similar  to  that 
which  they  enforce  upon  their  immediate  employes  (R.  1652 
et  seq.). 

Compelling  Licensees  to  Assign  Their  Own  Inventions  to  Minerals 
Separation  / 

Clause  3  of  the  license  contract  is  the  clause  requiring 
licensees  to  assign  their  own  inventions  and  improvements, 
and  the  inventions  and  improvements  of  their  employes  to 
Minerals  Separation. 

Dr.  Gregory  very  lucidly  (?)  explains  (R.  616  to  19)  the 
intention  of  this  clause  of  the  contract.  He  says,  in  effect, 
that  it  is  intended  merely  to  procure  for  all  their  licensees  the 
benefit  of  new  inventions  without  extra  charge.  He  fails, 
however,  to  make  mention  of  the  fact  that  each  time  a  new 
invention  is  made  by  a  licensee  and  turned  over  to  Minerals 
Separation  for  inclusion  within  the  list  of  patents  under  its 
control  that  the  claims  of  the  licensees  are  forged  anew,  and 
the  period  of  their  slavery  extended  for  the  life  of  such 
patent. 


MINERALS  SEPARATION  AND  FLOTATION  587 

Many  licensees  and  prospective  licensees  complain  bitterly 
of  this  clause  of  the  contract.  One  of  them  characterizes  it 
as  "giving  a  warranty  deed  (R.  1917)  on  the  brains  of  our 
organization,"  and  all  object  to  being  obliged  to  release  the 
results  of  their  own  investigations  and  efforts  to  Minerals 
Separation  for  its  sole  benefit. 

In  1917,  after  writing  to  the  company  suggesting  that 
royalty  charges  were  too  high,  Chief  Engineer  Nutter  said: 

"Another  matter  which  is  in  my  mind  now  and  which 
I  will  mention  here—although  it  does  not  properly  belong 
in  this  letter — is  this :  That  it  would  be  better  policy  for 
us  to  delete  from  our  license  those  clauses  which  always 
cause  irritation  to  our  licensees  and  in  practice  are  not 
observed.  I  refer  more  particularly  to  the  embargo  on 
information  and  to  the  binding  of  employes  to  turn  over 
inventions  to  us." 

This  statement  of  Mr.  Nutter  is  important  for  two  rea- 
sons :  first,  as  a  confession  that  the  company  has  an  embargo 
on  information  and  requires  its  employes  to  turn  over  inven- 
tions ;  and,  second,  because  he  recognizes  and  asserts  that  as  a 
matter  of  business  policy  the  company  is  making  a  mistake. 
Using  Spies  and  Detectives  in  Plants  of  Operators 

Dr.  Gregory  tells  (R.  653)  how  Chief  Engineer  Nutter 
went  right  into  the  plant  of  the  Butte  and  Superior  Com- 
pany. He  says  they  had  the  doors  locked,  but  Nutter  broke 
in.  It  was  "absolute  robbery,"  and  took  some  of  the  stuff  (con- 
centrates) and  put  it  into  a  bottle.  "If  you  get  some  of  the 
froth  you  know  what  they  are  doing,"  and  then  added  with 
the  utmost  sangfroid:  "You  have  to  set  a  thief  to  catch  a 
thief." 

This  characterization  of  their  chief  engineer  may  or  may 
not  be  entirely  acceptable  to  him,  but  up  to  date  he  has  been 
sufficiently  mindful  of  his  complete  ownership  by  Minerals 
Separation,  so  that  he  has  made  no  complaint. 

President  John  Ballot  says  that  they  have  had  occasion, 
and  unless  they  are  ordered  to  the  contrary  they  may  have 
occasion  in  the  future  to  employ  men  who  will  use  their 
ingenuity  and  skill  to  get  into  places  and  find  out  what  people 
are  doing.  "We  have  to  use  all  the  modern  methods  that 
everybody  uses — detectives.  We  employ  a  man  to  get  into  the 
works — anyone  that  we  can  get  hold  of  to  do  the  business. 


588  PROCEEDINGS   OF  AMERICAN    MINING  CONGRESS 

We  employ  a  man  to  go  into  the  works  and  pay  him.  Detect- 
ives were  sort  of  workmen." 

In  other  words,  they  employ  men  outright  in  the  first 
instance  as  spies,  put  them  under  salary,  induce  them  to  go 
to  various  operating  companies  and  misrepresent  themselves 
as  honest  men  seeking  employment,  and  thereby  worm  them- 
selves into  the  work  of  an  operator,  taking  their  money  from 
such  operator  as  regularly  as  they  get  their  pay  from  Min- 
erals Separation  for  the  sole  purpose  of  spying  out  and  report- 
ing the  operations  in  that  particular  mill. 

It  is  brazonly  admitted  (R.  779)  that  they  had  a  chief  spy 
located  in  Salt  Lake  City,  who  recommended  other  spies  (R. 
769)  who  were  employed  in  at  least  two  instances,  and  who 
were  characterized  as  the  "Northern  observer"  and  the 
"Southern  observer."  He  says,  however  (R.  773),  that  they 
were  employed  to  ferret  out  instances  of  stealing,  and  adds: 

"By  stealing,  we  mean  that  they  were  suspected  of  illegally 
using  our  process  patents." 

These  observers  were  employed  at  a  total  cost  of  a  little  less 
than  $10,000. 

The  arch-conspirator,  reporting  to  President  Ballot  (Ex. 
83,  Ex.  R,  p.  1161),  says: 

"I  just  want  to  inform  you  that  I  have  secured,  by 
devious  and  most  unethical  means,  a  sample  of  X  cake, 
which  I  am  sending  by  registered  mail  to  Mr.  Higgins 
today." 

When  we  consider  the  suppression  of  information,  the 
indiscriminate  charges  of  infringement,  the  demands  upon 
independent  inventors  and  manufacturers,  the  excessive 
claims  to  flotation  rights,  the  disparagement  of  independent 
apparatus,  the  threats  of  coercion,  the  strangle-hold  contracts 
imposed  upon  licensees  and  employes,  and  the  excessive  and 
discriminatory  royalties  which  are  being  charged,  to  say 
nothing  of  the  outrageous  methods  employed  by  this  patent- 
exploiting  monopoly  to  obtain  the  evidence  with  which  to  club 
non-licensees  into  submission,  is  it  any  wonder  that  practically 
the  whole  mining  fraternity  has  been  aroused  to  that  spirit 
of  self-defense  which  years  ago  found  expression  in  the  words, 
"Millions  for  defense,  but  not  one  cent  for  tribute"  ? 


MINERALS  SEPARATION  AND  PATENT  LAWS  589 

MINERALS  SEPARATION'S  POSITION  UNDER  THE  PATENT 
LAWS  AND  THE  ANTI-TRUST  LAWS 

By  GILBERT  H.  MONTAGUE 
Counsel    for   American   Mining    Congress,    New    York    City 

Minerals  Separation  owns,  controls  and  is  interested  in  68 
United  States  patents.  Of  these,  three  only  have  been  liti- 
gated: No.  835,120  ("fraction  of  1  per  cent."  oil),  No.  962,678 
(soluble  frothing  agents)  and  No.  1,099,699  (phenol  or  cresol, 
cold,  without  acid) .  None  of  the  remaining  process  patents, 
most  of  which  cover  merely  some  variant  or  alleged  improve- 
ment of  one  of  the  above  processes,  and  none  of  the  apparatus 
patents,  all  of  which  together  admittedly  cover  only  a  few 
of  the  many  types  of  machines  capable  of  use  in  flotation,  have 
ever  been  litigated  or  invoked  by  Minerals  Separation  in  any 
court  against  any  alleged  infringer. 

Taking  up  these  three  patents,  which  alone  have  been  liti- 
gated by  Minerals  Separation: 

No.  835,120  ("fraction  of  1  per  cent."  oil)  was  patented  in 
the  United  States  on  November  6,  1906,  by  three  British  sub- 
jects, Messrs.  Sulman,  Picard  and  Ballot.  No.  962,678  (sol- 
uble frothing  agents)  was  patented  in  the  United  States  on 
June  26,  1910,  by  the  same  Mr.  Sulman  and  two  other  British 
subjects,  Messrs.  Green  way  and  Higgins.  No.  1,099,699 
(phenol  or  cresol,  cold,  without  acid)  was  patented  in  the 
United  States  on  June  9,  1914,  by  the  same  Mr.  Greenway. 
Considerable  mystery  has  been  thrown  by  Minerals  Separa- 
tion around  the  present  ownership  of  these  patents,  but  so  far 
as  can  be  ascertained  (see  testimony  in  Federal  Trade  Com- 
mission v.  Minerals  Separation,  Ltd.,  et  al.,  pp.  40-41,  324-325, 
1015-1016)  such  ownership  is  somehow  suspended  between 
the  parent  company,  Minerals  Separation,  Ltd.,  a  British  cor- 
poration, and  its  subsidiary,  Minerals  Separation  North 
American  Corporation,  which  the  British  parent  company 
caused  to  be  organized  under  the  Maryland  law  in  the  midst 
of  the  Great  World  War. 

"To  Promote  the  Progress  of  Science" 

The  Constitution  of  the  United  States  (Art.  I,  Sec.  8, 
clause  8)  provides  that  Congress  shall  have  power  "To  pro- 


590  PROCEEDINGS   OF  AMERICAN   MINING  CONGRESS 

mote  the  progress  of  science  and  useful  arts,  by  securing  for 
limited  times  to  authors  and  inventors  the  exclusive  right  to 
their  respective  writing  and  discoveries."  That  Congress  was 
empowered  simply  'To  promote  the  progress  of  science  and 
useful  arts,"  and  was  authorized  to  secure  "for  limited  times" 
to  "inventors-  the  exclusive  right"  to  their  "discoveries"  only 
in  so  far  as  this  would  "promote  the  progress  of  science  and 
useful  arts,"  and  that  the  patent  owner's  rights  under  the 
Constitution  are  thus  conditioned  by  the  constitutional  pur- 
pose "To  promote  the  progress  of  science  and  useful  arts" 
must  always  be  remembered,  and  if  my  reference  to  this 
almost  forgotten  constitutional  provision,  and  to  some  often 
overlooked  duties  and  obligations  of  patentees  arising  there- 
under, seems  sometimes  too  frequent,  it  is  only  because  the 
arrogance  of  patentees  in  general,  and  Minerals  Separation 
in  particular,  makes  it  constantly  necessary  to  recall  that  by 
the  very  words  of  the  Constitution  Congress  had  no  power  to 
secure  "for  limited  times"  to  "inventors  the  exclusive  right" 
to  their  "discoveries"  excepting  in  so  far  as  such  "securing" 
should  "promote  the  progress  of  science  and  useful  arts." 

With  this  single  constitutional  purpose  in  view,  Congress 
has  enacted  that  after  filing  in  the  Patent  Office  a  "written 
description"  of  his  "invention  or  discovery,"  and  "of  the  man- 
ner and  process  of  making,  constructing,  compounding  and 
using  it,  in  such  full,  clear,  concise  and  exact  terms  as  to 
enable  any  person  skilled  in  the  art  or  science  to  which  it 
appertains,  or  with  which  it  is  most  nearly  connected,  to  make, 
construct,  compound  and  use  the  same,"  and  "particularly 
point  out  and  distinctly  claim  the  part,  improvement,  or  com- 
bination which  he  claims  as  his  invention  or  discovery"  (U.  S. 
Revised  Statutes,  Sec.  4888,  as  amended,  Act  March  3,  1915, 
c.  94,  Sec.  1),  and  after  establishing,  to  the  satisfaction  of  the 
Patent  Office,  the  fact  of  his  "invention  or  discovery,"  the 
inventor  shall  then  reecive  "a  grant  to  the  patentee,  his  heirs 
or  assigns,  for  the  term  of  17  years,  of  the  exclusive  right  to 
make,  use  and  vend  the  invention  or  discovery  throughout  the 
United  States,  and  the  Territories  thereof,  referring  to  the 
specifications  for  the  particulars  thereof"  (U.  S.  Revised  Stat- 
utes, Sec.  4884).  This  grant,  be  it  always  remembered,  is 
conditioned  by  the  Constitutional  purpose  "To  promote  the 
progress  of  science  and  useful  arts."  Many  times  the  courts 


MINERALS  SEPARATION  AND  PATENT  LAWS  591 

have  held  that  only  in  so  far  as  the  patentee  has  fulfilled  this 
constitutional  purpose,  and  through  his  specifications  and 
claims  on  file  in  the  Patent  Office  disclosed  his  "invention  or 
discovery  in  such  full,  clear,  concise  and  exact  terms  as  to 
enable  any  person  skilled  in  the  art  *  *  *  to  make,  con- 
struct, compound  and  use  the  same,"  is  the  patentee  entitled  to 
a  patent;  and  that  for  conduct  tending  to  frustrate  this  con- 
stitutional purpose,  such  as  fraud,  or  intent  to  deceive,  or 
excessive  claims,  the  patentee  must  forfeit  his  patent. 

Litigated  Patents  Soon  Expire 

Returning  to  the  three  patents  which  alone  have  been  liti- 
gated by  Minerals  Separation: 

No.  835,120  ("fraction  of  1  per  cent."  oil)  by  assignment 
grants  to  the  British  parent  company  and  to  its  controlled 
American  subsidiary,  Minerals  Separation  North  American 
Corporation  (or  to  the  latter  alone,  according  as  may  appear 
when  the  mystery  of  ownership  is  cleared  up) ,  "for  the  term 
of  17  years,"  i.  e.,  until  November  6,  1923,  "the  exclusive  right 
to  make,  use,  and  vend  *  *  *  throughout  the  United 
States,  and  the  territories  thereof"  such  "invention  or  dis- 
covery" as  the  patentees  "particularly  point  out  and  distinctly 
claim"  in  respect  of  their  so-called  "fraction  of  1  per  cent." 
oil  process.  Similarly,  No.  962,678  (soluble  frothing  agents) 
grants  to  the  same  companies,  until  June  26,  1927,  similar 
rights  in  respect  of  the  so-called  "soluble  frothing  agents" 
process,  and  No.  1,099,699  (phenol  or  cresol,  cold,  without 
acid)  grants  to  the  same  companies,  until  June  9, 1931,  similar 
rights  in  respect  of  the  so-called  "phenol  or  cresol,  cold,  with- 
out acid"  process.  By  their  own  terms,  therefore,  and  by  the 
express  language  of  the  statute,  these  companies  must  cease 
exercising  these  rights  on  November  6,  1923,  June  26,  1927 
and  June  9,  1931  respectively,  and  by  the  precise  words  of  the 
Constitution  these  rights  are  conditioned  by  the  constitu- 
tional purpose  "To  promote  the  progress  of  science  and  useful 
arts."  ^jj¥i 

What  are  these  rights,  which,  by  the  Constitution,  the  stat- 
ute, and  the  patents  themselves,  must  expire  anyway  in  a  few 
years,  and  by  the  language  of  the  Constitution  are  conditioned 
"To  promote  the  progress  of  science  and  useful  arts,"  which 


592  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

now  are  so  aggressively  asserted  against  the  entire  mining 
industry  by  Minerals  Separation? 

Precise  Limits  of  Patent  No.  835,120 

No.  835,120  ("fraction  of  1  per  cent."  oil)  has  been  litigated 
in  the  so-called  Hyde  case  (Minerals  Separation,  Ltd.  vs. 
Hdye,  207  Fed.  956,  D.  C.  Montana,  July  28,  1913 ;  Hyde  vs. 
Minerals  Separation,  Ltd.,  214  Fed.  100,  C.  C.  A.  Ninth  C., 
May  4,  1914;  Minerals  Separation,  Ltd.  vs.  Hyde,  242  U.  S. 
261,  U.  S.  Supreme  Court,  December  11,  1916),  and  in  the 
so-called  Miami  case  (Minerals  Separation,  Ltd.  vs.  Miami 
Copper  Co.,  237  Fed.  609,  D.  C.  Delaware,  September  29, 
1916;  Miami  Copper  Co.  vs.  Minerals  Separation,  244  Fed. 
752,  C.  C.  A.  Third  C.,  May  24,  1917),  and  in  the  so-called 
Butte  and  Superior  Case  (Minerals  Separation,  Ltd.  vs.  Butte 
and  Superior  Mining  Co.,  245  Fed.  577,  D.  C.  Montana, 
August  25,  1917 ;  Butte  and  Superior  Mining  Co.  vs.  Minerals 
Separation,  250  Fed.  241,  C.  C.  A.  Ninth  C.,  May  13,  1918; 
Minerals  Separation,  Ltd.  vs.  Butte  and  Superior  Mining  Co., 
250  U.  S.  336,  U.  S.  Supreme  Court,  June  2,  1919). 

In  the  Hyde  case,  after  varying  fortunes  in  the  United 
States  District  Court  for  Montana  and  in  the  United  States 
Circuit  Court  of  Appeals  for  the  Ninth  Circuit,  No.  835,120 
("fraction  of  1  per  cent."  oil)  was  sustained  by  the  United 
States  Supreme  Court  as  regards  the  claims  specifying  "the 
use  of  an  amount  of  oil  which  is  'critical,'  and  minute  as  com- 
pared with  the  amount  used  in  prior  processes  'amounting  to 
a  fraction  of  1  per  cent,  on  the  ore/  and  in  so  impregnating 
with  air  the  mass  of  ore  and  water  used  by  agitation — 'by 
beating  the  air  into  the  mass' — as  to  cause  to  rise  to  the  sur- 
face of  the  mass,  or  pulp,  a  froth,  peculiarly  coherent  and  per- 
sistent in  character,  which  is  composed  of  air  bubbles  with 
only  a  trace  of  oil  in  them,  which  carry  in  mechanical  suspen- 
sion a  very  high  percentage  of  the  metal  and  metalliferous 
particles  of  ore  which  were  contained  in  the  mass  of  crushed 
ore  subjected  to  treatment"  (Minerals  Separation,  Ltd.  vs. 
Hyde,  242  U.  S.,  261,  265),  and  was  rejected  as  indefinite  as 
regards  the  claims  specifying  a  "small  quantity  of  oil"  (p. 
271). 

In  the  Miami  case,  the  United  States  Circuit  Court  of 
Appeals  for  the  third  circuit  started  from  the  point  settle^  by 


MINERALS  SEPARATION  AND  PATENT  LAWS  593 

the  United  States  Supreme  Court  decision  in  the  Hyde  case, 
i.  e.,  "that  invention  resides  not  alone  in  critical  proportion 
of  oil  but  also  in  air  and  agitation"  (Miami  Copper  Co.  vs. 
United  States,  244  Fed.  752,  758) .  "It.  is  to  be  noted,"  said 
the  Circuit  Court  of  Appeals,  by  Judge  Woolley  writing  for 
the  Court,  "that  the  Supreme  Court  did  not  construe  the  pat- 
ent or  determine  its  scope,  for  it  had  no  occasion  to  do  so" 
(p.  758).  Accordingly,  the  Circuit  Court  of  Appeals  pro- 
ceeded "to  construe  the  patent  in  the  light  of  that  finding  and 
determine  whether  the  defendant's  practices  of  aeration  and 
agitation  in  connection  with  its  admitted  use  of  the  critical 
proportion  of  oil,  are  within  or  beyond  the  scope  of  the  patent" 
(p.  758).  The  Circuit  Court  of  Appeals  then  considered  the 
contention  of  Minerals  Separation,  Ltd.,  that  "whenever  the 
modifying  agent  of  the  patent  (oil)  is  used,  a  person  infringes 
who  gets  air  into  the  pulp  in  any  fashion  and  agitates  the 
mixture  by  any  means  to  a  sufficient  extent  to  cause  the  min- 
eral particles  to  attach  themselves  to  air  bubbles  and  to  rise 
therewith  above  the  top  of  the  mixture  in  a  collection  of 
bubbles  and  metal  particles,  to  wit,  froth"  (p.  758).  This 
obviously  was  an  attempt  by  Minerals  Separation  to  shift 
from  the  narrow  ground  which  it  previously  had  assumed, 
and  which  the  Supreme  Court,  in  the  Hyde  case,  had  adopted, 
and  to  place  the  patent  upon  another  and  quite  different 
ground  which  would  be  free  from  the  inconvenient  limitations 
implied  in  the  position  which  Minerals  Separation  had  as- 
sumed, and  which  the  Supreme  Court  had  sustained  in  the 
Hyde  case.  The  Circuit  Court  of  Appeals  rejected  this  con- 
tention and  said:  "The  contention  of  the  plaintiff  at  least 
omits  the  very  definite  limitation  of  the  patent  to  the  results 
obtained  by  the  use  of  oil  within  the  described  proportions, 
and  also  the  equally  definite  disclosure  of  an  agitation  in  vio- 
lence and  duration  greater  than  before  employed"  (p.  758). 
Construing  No.  835,120  ("fraction  of  1  per  cent."  oil),  the 
Circuit  Court  of  Appeals  declared  that  the  patentees  "first 
told  the  art  that  a  maximum  metal  recovery  could  be  had  from 
a  minimum  oil  content,"  which  "disclosure  alone,  interesting 
as  it  was,  would  have  been  valueless  to  the  art,  and  would  not 
have  entitled  the  discoverers  to  a  patent  until  they  told  how 
and  by  what  medium  that  phenomenon  could  be  brought  into 
practical  use,"  and  that  accordingly  the  patentees  "proceeded 


594          PROCEEDINGS   OF   AMERICAN  MINING    CONGRESS 

by  further  disclosures  to  tell  the  art  that  the  way  to  produce 
the  desired  fomentation  is  by  *  *  *  agitation  'greater 
than  and  different  from  that  which  had  been  resorted  to  be- 
fore.' *  *  *  Agitation  was  thus  made  the  practical  ele- 
ment of  their  patented  process,  and  by  their  patent  disclosures 
they  told  the  art  that  agitation  was  the  secret  by  which  the 
principle  of  their  discovery  could  be  unlocked  and  used"  (p. 
765) .  The  Circuit  Court  of  Appeals  held  that  the  first,  second 
and  third  flotation  processes  installed  by  the  Miami  Company 
included  agitation  equivalent  to  that  described  in  No.  835,120 
("fraction  of  1  per  cent."  oil),  and  therefore  infringed  the 
patent,  but  refused  to  pass  upon  the  so-called  "fourth  process" 
then  being  used  by  the  Miami  Company.  Discussing  the 
Miami  Company's  second  process,  the  Circuit  Court  of  Appeals 
said :  "If  the  only  agitation  to  which  the  pulp  was  subjected 
*  *  *  was  the  agitation  of  the  Callow  cells,  we  would  not 
say  that  that  agitation  *  *  *  constituted  an  infringement" 
(p.  768).  One  of  the  Circuit  Court  of  Appeals  judges,  it 
should  be  noted,  dissented,  and  held  that  neither  the  second 
nor  the  third  process  of  the  Miami  Company  included  the 
agitation  of  the  patent  (pp.  775-792).  That  the  Circuit  Court 
of  Appeals  has  no  intention  of  hastily  declaring  the  so-called 
"fourth  process"  used  by  Miami  Company,  or  the  different 
variants  of  this  process,  used  since  1917,  to  be  infringements 
of  No.  835,120  ("fraction  of  1  per  cent."  oil),  appears  from 
the  Court's  refusal,  in  June,  .1920,  to  hold  at  this  time  that  the 
Miami  Company  is  violating  the  Court's  decree  in  using  any 
of  these  variants  or  substitutes. 

In  the  Butte  &  Superior  case,  after  varying  rulings  by  the 
United  States  District  Court  for  Montana,  and  the  United 
States  Circuit  Court  of  Appeals  for  the  Ninth  Circuit,  the 
United  States  Supreme  Court  on  June  2,  1919,  held  that  the 
"essence  of  the  discovery"  covered  by  No.  835,120  ("fraction 
of  1  per  cent."  oil)  was  the  reduction  of  the  total  amount  of 
"oily  substance"  used  in  the  process  to  any  "fraction  of  1  per 
cent,  on  the  ore,"  plus  "vigorous  agitation,"  resulting  in  "flo- 
tation mainly  from  the  inclusion  of  air  bubbles  introduced 
into  the  mass  by  agitation.  (Minerals  Separation  vs.  Butte 
&  Superior  Mining  Co.,  250  U.  S.  336,  346-347,  see  also  341-2, 
334-7). 

Minerals  Separation,  Ltd.,  the  British  parent  company,  and 


MINERALS  SEPARATION  AND  PATENT  LAWS  595 

its  controlled  American  subsidiary,  Minerals  Separation  North 
American  Corporation,  began  suit  upon  No.  835,120  ("frac- 
tion of  1  per  cent."  oil)  against  Nevada  Consolidated  Copper 
Co.  in  September,  1919,  and  against  Magma  Copper  Co.  in 
January,  1920,  both  in  the  United  States  District  Court  for 
Maine.  Both  mining  companies  have  filed  elaborate  answers, 
which  foreshadow  their  defense  that  the  processes  which  they 
are  using  are  wholly  different  processes  which  lie  outside 
No.  835,120  ("fraction  of  1  per  cent/'  oil),  because  they  de- 
pend upon  air  bubbles  introduced  or  generated  not  by  "agita- 
tion," but  solely  by  Callow  or  pneumatic  cells,  and  do  not 
depend  upon,  nor  in  any  way  involve  the  "vigorous  agitation" 
which  the  Supreme  Court,  in  the  Hyde  case,  and  in  the  Butte 
&  Superior  case,  and  the  Circuit  Court  of  Appeals  for  the 
Third  Circuit,  in  the  Miami  case,  held  to  be  essentially  char- 
acteristic of  No.  835,120  ("fraction  of  1  per  cent."  oil) . 

Precise  Limits  of  Patent  No.  962,678 

No.  962,678  (soluble  frothing  agents)  has  been  litigated 
only  in  the  so-called  Miami  case  (Minerals  Separation  vs. 
Miami  Copper  Co.,  237  Fed.  609,  D.  C.  Delaware,  September 
29,  1916;  Miami  Copper  Co.  vs.  United  States,  244  Fed.  752, 
C.  C.  A.  Third  C.,  May  24,  1917),  where  the  Circuit  Court  of 
Appeals  for  the  Third  circuit  sustained  the  patent,  as  to  four 
of  its  claims,  in  which  the  frothing  agent  is  "a  small  per- 
centage" of  one  or  more  specified  soluble  "organic  substances" 
(instead  of  oil  as  in  No.  835,120,  "fraction  of  1  per  cent."  oil) , 
and  the  "mixture  is  thoroughly  agitated"  or  "vigorously  agi- 
tated" by  "beating  air  into  it"  (Miami  Copper  Co.  vs.  Min- 
erals Separation,  244  Fed.  752,  771-774).  "Here  (i.  e.,  in 
No.  962,678)  as  well  as  there  (i.  e.,  No.  835,120),"  said  the 
Circuit  Court  of  Appeals,  by  Judge  Woolley,  writing  for  the 
Court,  "the  decision  turns  upon  the  kind  and  degree  of  agita- 
tion employed  by  the  defendants  *  *  *  what  has  been  said 
about  the  infringing  agitation  in  the  oil  process  (i.  e.,  No. 
835,120)  must  also  apply  to  the  same  agitation  when  con- 
sidered in  reference  to  the  second  process  (i.  e.,  No.  962,678)" 
(p.  774). 

Minerals  Separation,  Ltd.,  the  British  parent  company,  and 
its  controlled  American  subsidiary.  Minerals  Separation  North 
American  Corporation,  began  suit  upon  No.  962,678  (soluble 


596  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

frothing  agents)  against  Nevada  Consolidated  Copper  Co.  in 
February,  1920,  and  against  Magma  Copper  Co.  in  January, 
1920,  both  in  the  United  States  District  Court  for  Maine. 
Both  mining  companies  have  filed  elaborate  answers  which 
foreshadow  their  defense  that  the  processes  which  they  are 
using  are  wholly  different  processes  which  lie  outside  No. 
962,678  (soluble  frothing  agents)  because  they  depend  upon 
air  bubbles  introduced  or  generated,  not  by  "agitation,"  but 
solely  by  Callow  or  pneumatic  cells,  and  do  not  depend  upon, 
or  in  any  way  involve  the  'Vigorous  agitation"  which  the 
Circuit  Court  of  Appeals  for  the  Third  Circuit  in  the  Miami 
case  held  to  be  essentially  characteristic  of  No.  962,678 
(soluble  frothing  agents). 

Precise  Limits  of  Patent  No.  1,099,699 

No.  1,099,699  (phenol  or  cresol,  cold,  without  acid)  has  been 
litigated  only  in  the  so-called  Miami  case  (Minerals  Separa- 
tion, Ltd.  vs.  Miami  Copper  Co.,  237  Fed.  609,  D.  C.  Delaware, 
September  29,  1916 ;  Miami  Copper  Co.  vs.  Minerals  Separa- 
tion, Ltd.,  244  Fed.  752,  C.  C.  A.  Third  C.,  May  24,  1917), 
where  the  District  Court  held  the  patent  invalid,  but  the  Cir- 
cuit Court  of  Appeals  for  the  Third  Circuit  sustained  it.  The 
process  covered  by  this  patent  consists  "in  mixing  a  powdered 
ore  *  *  *  with  neutral  matter  containing  in  solution  a 
minute  quantity"  of  hydroxy  compounds  and  "agitating  the 
mixture  in  the  cold  to  form  a  froth  and  separating  the  froth" 
(Miami  Copper  Co.  vs.  Minerals  Separation,  244  Fed.  752, 
774).  The  Circuit  of  Appeals  held  that  by  dispensing  with 
heat  and  acid,  and  by  using  "a  minute  quantity"  of  hydroxy 
compounds  (i.  e.,  phenol,  cresol,  etc.)  the  patentee  disclosed 
an  original  and  novel  ^  plan  which  has  broadened  and  made 
more  simple  the  agitation  process  of  air  flotation"  (p.  775). 
Neither  Minerals  Separation,  Ltd.,  the  British  parent  com- 
pany, nor  any  of  its  subsidiaries,  has  ever  sued  anyone  else 
upon  this  patent. 

"Occupied  Zone"  of  Minerals  Separation 

Summarizing  the  rights  which  Minerals  Separation,  Ltd., 
the  British  parent  company,  and  its  controlled  American  sub- 
sidiary, Minerals  Separation  North  American  Corporation 
have  under  the  only  patents  which  it  has  litigated : 


MINERALS  SEPARATION  AND  PATENT  LAWS       597 

Under  No.  835,120  ("fraction  of  1  per  cent."  oil),  condi- 
tioned always  upon  the  constitutional  purpose  "To  promote 
the  progress  of  science  and  useful  art,"  the  patentees  have 
the  "exclusive  right,"  expiring  in  any  event  November  6, 
1923,  merely  to  the  process  of  reducing  the  total  amount  of 
"oily  substances"  to  any  "fraction  of  1  per  cent,  on  the  ore" 
and  adding  "vigorous  agitation,"  greater  than  and  different 
from  that  which  had  been  resorted  to  before" — "by  beating 
the  air  into  the  mass" — so  as  to  produce  "flotation  mainly 
from  the  inclusion  of  air  bubbles  introduced  into  the  mass  by 
agitation,"  which  right  the  Court  has  expressly  held  does  not 
cover  any  process  in  which  the  total  amount  of  "oily  sub- 
stances" exceeds  "1  per  cent,  on  the  ore"  nor  any  process  in 
which  air  gets  "into  the  pulp  in  any  fashion"  or  "by  any 
means"  (such  as  "the  agitation  of  the  Callow  cells"),  different 
from  the  "vigorous  agitation"  mentioned  in  the  patent. 

Under  No.  962,678  (soluble  frothing  agents),  conditioned 
always  upon  the  constitutional  purpose  "To  promote  the 
progress  of  science  and  useful  arts,"  the  patentees  have  the 
"exclusive  right,"  expiring  in  any  event  June  26,  1927,  merely 
to  the  process  of  using  "a  small  percentage"  of  one  or  more 
specified  soluble  "organic  substances"  and  agitating  the  mix- 
ture "thoroughly,"  or  "vigorously,"  "beating  the  air  into  it," 
which  right,  by  well-settled  law,  does  not  cover  any  process  in 
which  the  total  amount  of  such  "organic  substances"  exceeds 
the  "small  percentage"  referred  to  in  No.  962,678  (soluble 
frothing  agents) ,  nor  any  process  in  which  air  gets  "into  the 
pulp  in  any  fashion"  or  "by  any  means,"  different  from  agi- 
tating "thoroughly,"  or  "vigorously"  or  "beating  the  air 
into  it." 

Under  No.  1,099,699  (phenol  or  cresol,  cold,  without  acid) 
conditioned  always  upon  the  constitutional  purpose  "To  pro- 
mote the  progress  of  science  and  useful  arts,"  the  patentees 
have  the  "exclusive  right,"  expiring  in  any  event  June  9,  1931, 
merely  to  the  process  of  using  "a  minute  quantity  of  hydroxy 
compounds"  without  acid  and  "agitating  the  mixture  in  the 
cold  to  form  a  froth,"  which  right,  by  well-settled  law,  does 
not  cover  any  process  in  which  the  total  amount  of  hydroxy 
compounds  exceeds  the  "small  percentage"  referred  to  in  No. 
1,099,699  (phenol  or  cresol,  cold,  without  acid),  nor  any  pro- 
cess in  which  air  gets  "into  the  pulp  in  any  fashion,"  or  "by 


598  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

any  means,"  different  from  the  agitation  described  in  the 
patent. 

These  precise  limits  of  Minerals  Separation's  three  litigated 
patents  define  the  entire  zone  which,  so  far  as  the  courts  have 
decided,  Minerals  Separation  today  has  any  legal  right  to 
occupy  in  the  field  of  flotation. 

Occupied  Zone  Soon  to  Be  Vacated,  Free  Zone  Always  to  Be 
Unmolested 

By  the  express  conditions  of  this  occupation,  prescribed 
by  the  Constitution,  the  statute  and  the  patents  themselves, 
Minerals  Separation  on  November  6,  1923,  must  evacuate  the 
first  sector  of  this  occupied  zone  which  it  now  holds  under  No. 
835,120  ("fraction  of  1  per  cent."  oil),  and  on  June  26,  1927, 
must  evacuate  the  second  sector  which  it  now  holds  under 
No.  962,678  (soluble  frothing  agents),  and  on  June  9,  1931, 
must  evacuate  the  third  and  last  sector  which  it  now  holds 
under  No.  1,099,699  (phenol  or  cresol,  cold,  without  acid) . 

The  plain  emphatic  intention  of  the  Constitution,  the  statute 
and  the  patents  themselves  is  that  on  November  9,  1931, 
Minerals  Separation's  evacuation  from  this  occupied  zone 
shall  be  complete,  and  that  Minerals  Separation's  present 
servitude  over  this  occupied  zone  shall  then  cease,  and  that 
this  entire  occupied  zone  shall  then  be  wholly  free  to  everyone. 

The  "exclusive  right"  for  which  the  patentees  bargained 
when  they  "disclosed"  their  processes  and  obtained  their  pat- 
ents was,  as  they  then  well  knew,  by  the  Constitution,  the 
statute  and  the  patents  themselves,  absolutely  and  strictly 
limited  to  this.  After  the  17-year  period  for  each  patent  has 
expired,  freedom  to  everyone  to  use  these  processes,  without 
paying  royalty  or  incurring  any  obligation  of  any  kind  to 
Minerals  Separation  was,  as  the  patentees  then  well  knew, 
one  of  the  absolute  essentials  of  this  bargain,  because  if  this 
essential  should  fail,  then  the  sole  constitutional  justification 
for  this  "exclusive  right,"  namely,  "To  promote  the  progress 
of  science  and  useful  arts,"  would  also  fail,  and  the  entire 
constitutional  purpose  would  be  utterly  frustrated.  I  say, 
advisedly,  "one  of  the  absolute  essentials  of  this  bargain" 
because  there  is  another  essential  equally  necessary  to  the 
constitutional  purpose  "To  promote  the  progress  of  science 


MINERALS  SEPARATION  AND  PATENT  LAWS  599 

and  useful  arts."  Inventors,  engineers,  manufacturers  and 
others,  independent  of  and  competitive  with  the  patentees, 
must  be  permitted  and  encouraged,  at  every  moment  through- 
out these  17-year  patent  periods,  to  utilize  every  suggestion 
which  the  patents  themselves  afford  to  make  every  inde- 
pendent and  competing  "invention  or  discovery"  possible  in 
the  area  outside  the  occupied  zone  of  the  patents.  Suppres- 
sion, intimidation,  molestation  or  harassment  by  the  patentees 
of  such  investigations  of  such  independent  and  competing 
inventors,  engineers,  manufacturers  and  others  thwarts  the 
constitutional  purpose  "To  promote  the  progress  of  science 
and  useful  arts,"  and  destroys  the  sole  constitutional  justifi- 
cation for  the  patentees  "exclusive  right."  To  abstain  from 
these  practices  is  just  as  much  the  patentees'  duty,  under  the 
Constitution  and  the  patents  themselves,  as  is  their  duty  to 
cease  to  exercise  their  "exclusive  right"  at  the  expiration  of 
the  17-year  patent  periods. 

How  defiantly  Minerals  Separation,  throughout  its  career 
in  the  United  States,  has  evaded  these  two  duties,  appears  in 
the  standard  license  agreements  which  Minerals  Separation 
has  executed  with  dozens  of  American  mine  operators  who 
have  never  contested  Minerals  Separation's  patents,  who  at 
great  cost  to  themselves  have  paid  quarterly  to  Minerals  Sep- 
aration the  exorbitant  royalties  exacted  under  these  agree- 
ments, and  who  are  now  'discovering  from  the  Federal  Trade 
Commission's  evidence  that  the  royalties  which  Minerals  Sep- 
aration is  exacting  from  them,  in  some  cases,  several  times 
exceed  the  royalties  paid  by  their  more  favored  rivals  and 
competitors,  and  that  having  executed  these  agreements  they 
must  continue  to  forever  pay  these  royalties,  always  handi- 
capped by  the  lower  royalties  enjoyed  by  their  more  favored 
rivals  and  competitors,  and  after  November  6,  1923,  June  26, 
1927  and  June  9,  1931,  still  further  handicapped  by  competi- 
tion from  rivals  and  competitors  who,  not  having  executed 
any  agreements  with  Minerals  Separation,  will,  after  these 
dates,  be  free  to  use  the  respective  processes  covered  by  Min- 
erals Separation's  three  litigated  patents  without  paying  any 
royalty  or  incurring  any  obligation  of  any  kind  to  Minerals 
Separation. 


600  PROCEEDINGS    OF    AMERICAN   MINING    CONGRESS 

Stretching  Seventeen  Years  Into  Eternity 

Minerals  Separation's  first  duty,  under  the  Constitution, 
the  statute  and  its  patents  themselves,  is  to  evacuate,  sector 
by  sector,  on  November  6,  1923,  June  26,  1927  and  June  9, 
1931,  the  occupied  zone  of  Minerals  Separation's  three  ligi- 
gated  patents. 

To  evade  this  duty,  Minerals  Separation  annexes  to  its 
standard  license  agreement  a  "schedule"  setting  forth  these 
three  litigated  patents,  and  also  all  its  other  United  States 
patents,  65  in  number,  none  of  which  have  been  litigated,  and 
most  of  which  cover  merely  some  variant  or  alleged  improve- 
ment of  processes  or  apparatus  described  in  earlier  patents, 
and  all  of  which  Minerals  Separation  has  succeeded  in  obtain- 
ing from  the  United  States  Patent  Office  at  the  rate  of  from 
one  to  ten  new  patents  each  year.  The  American  mine  oper- 
ator, as  a  rule,  desires  to  use  only  one,  or  at  most  two  or  three 
of  the  processes  and  apparatus  described  in  these  68  Minerals 
Separation  patents.  Minerals  Separation  invariably  refuses, 
however,  to  give  him  this  permission  unless  he  executes  a 
license  agreement,  in  the  standard  form  of  which  Minerals 
Separation  recites  that  "the  licensors  (i.  e.,  Minerals  Separa- 
tion), hereby  grant  unto  the  licensees  (i.  e.,  the  American 
mine  .operator) ,  full  license,  power  and  authority  to  make, 
use  and  exercise  any  or  all  of  the  inventions  described  and 
claimed  in  the  Letters  Patent  within  this  license"  at  such  mine 
as  the  license  agreement  specifies,  "during  the  terms  of  the 
Letters  Patent  within  this  license  or  any  of  them  and  any 
extension  thereof."  Elsewhere  in  the  license  agreement, 
Minerals  Separation  recites  that  the  "Letters  Patent  within 
this  license"  mean  "all  or  any  of  the  inventions,  processes  or 
apparatus  described  and  claimed  in  the  said  Letters  Patent 
and  any  Letters  Patent  for  the  concentration  of  ores  that  are 
or  may  become  the  property  of  the  licensors  (i.  e.,  Minerals 
Separation)."  This  effectively  brings  within  the  phrase 
"Letters  Patent  within  this  license"  all  patents  which  Min- 
erals Separation  may  thereafter  succeed  in  getting  patented, 
which,  judging  from  past  experience,  will  aggregate  from  one 
to  ten  new  patents  each  year  until  the  end  of  time.  The  life 
of  the  license  agreement,  therefore,  which  runs  until  17  years 
after  the  date  of  the  latest  patent  among  the  "Letters  Patent 


MINERALS  SEPARATION  AND  PATENT  LAWS  601 

within  this  license"  will  be,  until  the  end  of  time,  extended 
each  year  by  the  addition^  of  new  patents,  and  the  license 
agreement  will  thus  become  perpetual,  unless  Minerals  Sepa- 
ration's plans  are  upset  by  the  Federal  Trade  Commission. 

Royalties:   Discriminatory  and  Eternal 

Several  Minerals  Separation  licensees,  as  I  have  stated,  pay 
royalties  which  are  only  a  fraction  of  those  charged  by  Min- 
erals Separation  to  other  licensees  similarly  situated,  whom 
Minerals  Separation  has  required  to  execute  standard  license 
agreements.  Such  discrimination  handicaps  each  such  stand- 
ard licensee  in  competing  with  his  more  favored  rivals,  and 
its  correction  is  one  of  the  objectives  of  the  Federal  Trade 
Commission's  proceeding  against  Minerals  Separation. 

The  eternal  duration  of  Minerals  Separation's  licensee 
agreements  presents  a  situation  which  insistently  calls  for 
relief  from  the  Federal  Trade  Commission.  How  it  operates 
upon  Minerals  Separation's  licensees  may  be  illustrated  by 
their  plight  upon  the  expiration  of  the  patents  covering  the 
only  Minerals  Separation  processes  which  they  may  happen  to 
be  using. 

Assume  that  a  Minerals  Separation  licensee  is  using  only 
No.  835,120  ("fraction  of  1  per  cent."  oil)  :  On  November  6, 
1923,  this  patent  expires.  The  plain,  emphatic  intention  of 
the  Constitution,  the  statute  and  the  patent  itself  is  that  on 
that  date  Minerals  Separaion  shall  completely  forfeit  its 
present  "exclusive  right"  to  the  process  covered  by  this  patent, 
that  Minerals  Separation's  present  servitude  on  the  art 
through  its  ownership  of  this  patent  shall  then  cease,  and  that 
this  process  shall  then  be  wholly  free  to  everyone.  Mindful 
of  this,  the  licensee,  let  us  assume,  who  several  years  before, 
in  order  to  obtain  permission  to  use  merely  this  "fraction  of 
1  per  cent."  oil  process,  executed  with  Minerals  Separation  a 
standard  license  agreement,  and  who  has  never  contested  with 
Minerals  Separation  this  or  any  other  patent,  and  who  at 
great  cost  to  himself,  has  paid  quarterly  to  Minerals  Separa- 
tion the  exorbitant  royalty  exacted  by  this  license  agreement, 
and  who  has  never  used  any  process  or  apparatus  belonging 
to  Minerals  Separation  excepting  only  the  process  covered  by 
this  patent  now  expired,  takes  out  this  license  agreement  and 
reads  it  over  in  the  expectation  of  finding  that  all  his  obliga- 


602  PROCEEDINGS   OF   AMERICAN  MINING    CONGRESS 

tions  to  Minerals  Separation  have  now  been  fully  discharged, 
and  that  now  he  may  freely  use  this  process  without  paying 
any  royalty  or  incurring  any  obligations  to  Minerals  Separa- 
tion or  anyone  else.  His  license  agreement,  and  thus  his  obli- 
gation to  pay  royalties,  he  now  discovers,  do  not  end  when  the 
patent  expires,  but  continue  as  long  as  he  uses  the  process, 
continue  even  while  his  rivals  who  executed  no  agreements 
with  Minerals  Separation  are  absolutely  free  to  use  the  process 
without  paying  any  royalty  to  Minerals  Separation,  continue 
even  while  his  competitors  who  defied  Minerals  Separation 
and  contested  its  patent  are  using  the  process  without  incur- 
ring any  obligation  of  any  kind  to  Minerals  Separation  or  any- 
one else,  and  will  so  continue  until  the  end  of  time,  with  the 
requirement  that  he  account  quarterly  and  settle  promptly 
with  Minerals  Separation  in  the  same  exorbitant  figures,  so 
long  as  he  continues  to  use  the  process  of  this  now  expired 
patent. 

Other  Conditions  of  Minerals  Separation's  Eternal  Servitude 

Article  3  of  Minerals  Separation's  standard  license  agree- 
ments provides  that  throughout  the  eternal  life  of  these  agree- 
ments, all  licensees  must  disclose  and  turn  over  to  Minerals 
Separation  the  ownership  of  "every  invention  or  discovery 
made  or  used  by  them  which  may  be  an  improvement,  modifi- 
cation or  addition  to  any  of  the  inventions  specified  in  the 
Letters  Patent  within  this  license,  or  may  be  useful  in  carry- 
ing out  any  of  the  processes"  above  mentioned)  and  that  all 
licensees  must,  so  far  as  practicable,  "bind  their  employees" 
to  turn  over  to  Minerals  Separation  all  such  inventions  made 
by  such  employees,  and  that  no  licensee  may  use  "any  im- 
provement, modification  or  addition  to  any  of  the  inventions 
specified  in  the  Letters  Patent  within  this  license"  except  upon 
request  to,  and  consent  by,  Minerals  Separation.  Articles  6 
and  9  provide  that  throughout  the  eternal  life  of  these  license 
agreements  the  licensee  "shall  not  in  any  way,  directly  or 
indirectly,  support  or  assist  third  or  hostile  parties"  such,  for 
instance,  as  the  Federal  Trade  Commission,  "in  any  litigation 
against  licensors,"  and  "shall  not,  without  the  written  consent 
of  the  licensors,  communicate  any  detail  connected  with  the 
working  of  any  of  said  inventions,  modifications,  additions  or 
improvements  to  any  third  party." 


MINERALS  SEPARATION  AND  PATENT  LAWS  603 

If,  as  Minerals  Separation  claims  (erroneously,  as  I  be- 
lieve), these  license  agreements  ought  to  be  executed  by  every 
mine  operator  practicing  the  art  of  flotation,  it  would  follow 
that  every  mine  operator  who,  by  any  possibility,  could  inter- 
est himself  in  inventing  any  improvement  in  the  art,  now  or 
at  any  time  in  the  future,  would  be  perpetually  subject  to  the 
bondage  of  Minerals  Separation. 

Nothing  approaching  the  duration,  extent  and  burdensome- 
ness  of  the  servitude  imposed  by  Minerals  Separation  has  ever 
been  presented  in  any  reported  decision  in  the  State  or  Fed- 
eral courts.  This  intolerable  and  perpetual  servitude  Min- 
erals Separation  seeks  to  impose  upon  the  entire  mining  in- 
dustry of  the  United  States,  and  upon  all  present  and  future 
inventive  genius  which,  in  this  or  any  future  generation,  can, 
by  any  possibility,  advance  the  art  of  flotation.  Compared 
with  Minerals  Separation,  every  other  trust  which  the  Gov- 
ernment has  dissolved  under  the  anti-trust  laws  pales  into 
insignificance,  for  Minerals  Separation  seeks  to  bring  within 
its  combination  and  monopoly  not  only  all  processes  and  appa- 
ratus which  its  own  employes  may -develop,  but  also  all  proc- 
esses and  apparatus  which  any  mine  operator  anywhere,  who 
now  or  at  any  future  time  uses  flotation,  may  now  or  at  any 
future  time  by  any  possibility  invent  or  discover.  To  curb 
this  extravagance  of  monopoly,  and  to  place  limits  upon  these 
eternal  license  agreements,  are  among  the  objectives  of  the 
Federal  Trade  Commission's  proceeding  against  Minerals 
Separation. 

Obstructing  ''the  Progress  of  Science" 

Minerals  Separation's  second  duty,  under  the  Constitution, 
the  statute  and  its  patents  themselves  by  which  Minerals 
Separation's  "exclusive  right"  under  these  patents  is  condi- 
tioned, is  not  to  thwart  the  constitutional  purpose  "To  pro- 
mote the  progress  of  science  and  useful  arts."  This  consti- 
tutional purpose  requires  that  independent  and  competing 
inventors,  engineers,  manufacturers  and  others  should  be 
permitted  and  encouraged  to  utilize  every  suggestion  which 
Minerals  Separation's  patents  afford  to  develop,  and  exploit 
every  independent  and  competing  "invention  or  discovery" 
possible  in  the  area  outside  the  occupied  zone  of  Minerals 


604  PROCEEDINGS   OP    AMERICAN   MINING    CONGRESS 

Separation's  patents,  and  that  Minerals  Separation  should 
abstain  from  suppressing,  intimidating,  molesting  or  haras- 
sing independent  and  competent  inventors,  engineers,  manu- 
facturers and  others  engaged  in  such  development  and 
exploitation. 

In  defiance  of  this  duty,  the  Federal  Trade  Commission 
charges,  Minerals  Separation  has  tried  to  prevent  independent 
and  competing  inventors,  engineers,  manufacturers  and  others 
from  exploiting  independent  and  competing  processes  and 
apparatus,  has  tried  to  prevent  American  mine  operators  from 
using  such  independent  and  competing  processes  and  appa- 
ratus, has  falsely  and  maliciously  disparaged  such  independent 
and  competing  processes  and  apparatus,  has  falsely  and 
maliciously  claimed  patent  rights  in  excess  of  those  actually 
possessed  by  Minerals  Separation,  has  maliciously  threatened 
to  prosecute  American  mine  operators  who  were  using  such 
independent  and  competing  processes  and  apparatus,  has 
seduced,  corrupted  and  bribed  employes  of  American  mine 
operators  to  give  Minerals  Separation  confidential  information 
regarding  their  employers'  operations,  and  in  various  ways 
has  tended  to  suppress,  intimidate,  molest  and  harass  the 
development  and  exploitation  of  independent  and  competing 
"inventions  or  discoveries"  in  the  area  outside  the  occupied 
zone  of  Minerals  Separation's  patents,  and  has  thus  tended  to 
frustrate  the  constitutional  purpose  "To  promote  the  prog- 
ress of  science  and  useful  arts"  by  which  Minerals  Separa- 
tion's "exclusive  right"  under  its  patents  is  wholly  conditioned. 
These  practices  attributed  to  Minerals  Separation,  the  Fed- 
eral Trade  Commission  proposes  to  stop. 

All  these  practices,  according  to  the  Commission's  com- 
plaint, Minerals  Separation  has  been  committing  for  many 
years,  with  such  success  that  by  means  of  them  Minerals  Sep- 
aration has  stifled  and  suppressed  the  development  and  exploi- 
tation of  independent  and  competing  processes  and  apparatus, 
and  has  prevented  actual  and  potential  competition  from 
independent  and  competing  inventors,  engineers,  manufac- 
turers and  others,  and  has  thus  obtained  that  position  of 
power  and  dominance  which  now  enables  Minerals  Separation 
to  charge  exorbitant  and  discriminatory  royalties. 


MINERALS  SEPARATION  AND  PATENT  LAWS        COS 

What  the  Commission  Can  Accomplish 

The  Commission's  purpose  is  not  to  dislodge  Minerals  Sep- 
aration from  the  occupied  zone  which  Minerals  Separation 
succeeded  in  capturing  in  its  first  legal  onset  upon  the  Ameri- 
can mining  industry.  That  task  is  being  attempted  only  by 
the  American  mine  operators  who  are  now  defending  them- 
selves against  Minerals  Separation  suits  above  described.  The 
Commission's  object  is  to  ensure  that  Minerals  Separation 
shall  fulfill  its  plain  emphatic  duty  under  the  Constitution, 
the  statute,  and  its  patents  themselves,  to  evacuate,  sector  by 
sector,  on  November  6,  1923,  June  26,  1927  and  June  9,  1931, 
the  occupied  zone  of  Minerals  Separation's  three  litigated 
patents,  and  meanwhile  not  to  suppress,  intimidate,  molest  or 
harass  independent  and  competing  inventors,  engineers,  manu- 
facturers and  others  now  working  outside  this  occupied  zone, 
and  that  Minerals  Separation  shall  not  utilize  its  ingenious 
entrenchments,  its  skilfully  planned  attacks,  its  enormous 
exactions  of  tribute  from  the  occupied  zone  under  its  servi- 
tude, its  awe-inspiring  preparations  for  extorting  colossal 
indemnities  from  the  outside  realm  of  flotation,  and  its  cam- 
paign of  commercial  schrecklichkeit  generally,  for  the  purpose 
of  evading  this  plain  emphatic  duty. 

The  Federal  Trade  Commission,  in  most  of  the  proceedings 
which  it  has  heretofore  brought,  has  found,  like  the  Supreme 
Court  in  the  Standard  Oil  case  (Standard  Oil  Co.  vs.  United 
States,  221  U.  S.  1,  77)  "that  ordinarily  where  it  was  found 
that  acts  had  been  done  in  violation  of  the  statute  adequate 
measure  of  relief  would  result  from  restraining  the  doing  of 
such  acts  in  the  future."  But  in  the  present  proceeding,  the 
Federal  Trade  Commission  will  find  as  the  Supreme  Court  of 
the  United  States  found  in  the  Standard  Oil  case,  that  "in  a 
case  like  this,  where  the  condition  which  has  been  brought 
about  in  violation  of  the  statute,  in  and  of  itself,  is  not  only  a 
continued  attempt  to  monopolize,  but  also  a  monopolization, 
the  duty  to  enforce  the  statute  requires  the  application  of 
broader  and  more  controling  remedies"  (p.  77) . 

The  Federal  Trade  Commission's  authority  for  devising  and 
applying  these  remedies  is  ample  under  the  Federal  Trade 
Commission  Act  and  the  Clayton  Anti-trust  Act.  Adequate 
remedy  in  the  present  situation  will  never  be  obtained  until 


606  PROCEEDINGS   OF   AMERICAN  MINING    CONGRESS 

the  Commission,  by  explicit  directions  in  respect  of  the 
amount  of  royalties  to  be  charged  by  Minerals  Separation 
ensures  that  such  royalties  are  not  in  excess  of  what  they 
would  have  been  had  not  actual  and  potential  competition  from 
rival  processes  and  rival  apparatus,  and  from  rival  inventors, 
engineers,  manufacturers  and  others,  been  stifled  and  sup- 
pressed by  Minerals  Separation  over  a  period  of  years.  Merely 
to  enjoin  at  this  late  day  the  continued  practice  by  Minerals 
Separation  of  the  particular  methods  of  unfair  competition 
set  forth  in  the  Commission's  complaint  will  not  immediately 
revive  the  actual  and  potential  competition  which  Minerals 
Separation  has  for  years  been  stifling  and  suppressing.  Not 
for  several  years,  perhaps  not  for  many  years,  can  this  com- 
petition be  revived,  nor  the  mining  industry  be  made  safe  for 
rival  processes  and  rival  apparatus  and  rival  inventors,  engi- 
neers, manufacturers  and  others  to  compete  with  Minerals 
Separation.  Until  that  time  arrives,  therefore,  the  Federal 
Trade  Commission,  "recreating,  out  of  the  elements  now  com- 
posing it,  a  new  condition  which  shall  be  honestly  in  harmony 
with  and  not  repugnant  to  the  law"  (United  States  vs.  Ameri- 
can Tobacco  Co.,  221  U.  S.  106,  187),  should  make  explicit 
directions  as  to  the  amount  of  royalties  to  be  charged,  to  the 
end  that  the  exorbitant  and  discriminatory  royalties,  which 
are  the  purpose  and  crowning  accomplishment  of  years  of 
unfair  methods  of  competition  on  the  part  of  Minerals  Sepa- 
ration, may  not  be  perpetuated  after  the  mere  practice  of  such 
methods  has  been  discontinued. 


RECENT  DEVELOPMENTS  IN  FLOTATION  607 

RECENT  DEVELOPMENT  IN  FLOTATION 
By  PHILIP  ARGALL,  Consulting  Engineer,  Denver,  Col. 

Substantial  progress  is  being  made  along  chemical  and  me- 
chanical lines  and  in  a  more  careful  preparation  of  ores  for 
flotation,  tending  towards  somewhat  coarser  crushing  followed 
by  one  or  more  flotation  cleanings  of  the  concentrate  and  re- 
grinding  the  middlings  from  the  cleaner  cells  previous  to 
re-floating.  Selective  flotation,  through  which  two  or  more 
minerals  can  be  floated  separately,  producing  marketable  con- 
centrates of  both  ore  minerals,  has  made  considerable  pro- 
gress. It  is,  however,  extremely  diffiicult  to  obtain  details  or 
data  of  recent  developments,  as  so  many  inventors  are  reticent 
until  patent  protection  is  secured,  and  others  are  not  yet  ready 
to  discuss  their  methods.  Under  these  circumstances  I  can 
only  indicate  the  direction  of  improvements  that  come  within 
my  knowledge. 

Oil  Not  Wholly  Essential 

Under  chemical  improvements,  I  might  say  at  once  that  oil 
is  not  essential  for  good  flotation  results,  as  demonstrated  by 
Henry  E.  Wood  of  Denver  about  14  years  ago,  and  by  Potter 
and  Delprat  in  Australia  some  four  years  earlier.  The  two 
latter,  however,  used  water  and  sulphuric  acid,  or  acid  sul- 
phate of  sodium  and  successfully  treated  several  million  tons 
by  their  process.  There  is  a  strong  tendency  today  to  get  away 
from  the  use  of  oil  in  flotation,  hence  the  earlier  oil-less  proc- 
esses are  subject  to  close  study. 

It  is  well  known  that  various  chemicals  added  to  water 
facilitate  flotation  by  either  the  film  or  the  bubble  method,  and 
such  reagents  are  in  common  use  in  oil  flotation  methods; 
apart  from  these  there  are  some  new  compounds  or  reagents 
now  available,  or  soon  to  be  available,  which  are  expected  to 
produce  a  froth  highly  effective  in  separating  minerals  from 
their  gangue  without  the  use  of  a  trace  of  oil.  In  this  connec- 
tion colloids,  or  colloid  solutions  have  been  used  on  an  experi- 
mental scale,  and  I  believe  in  some  instances,  on  a  practical 
scale  also,  producing  commercial  results  without  the  use  of  oil. 

I  believe  I  am  safe  in  saying  that  there  are  several  people 


608  PROCEEDINGS   OF    AMERICAN   MINING    CONGRESS 

actively  at  work  today  in  the  elaboration,  perfection  and  manu- 
facture of  reagents  that  will  satisfy  all  requirements  of  good 
flotation  without  the  use  of  oleaginous  compounds. 

Selective  Flotation 

• 

In  the  field  of  selective  flotation  much  good  work  has  been 
accomplished  by  first  deadening  the  zinc  ores  by  gases  or  other 
chemicals  so  the  lead  can  be  floated,  and  following  the  removal 
of  the  deadening  film  the  zinc  can  next  be  floated,  thus  produc- 
ing two  marketable  concentrates  from  mixed  zinc  and  lead 
ores.  The  Bradford  process  is  a  notable  example  that  marks 
the  beginning  of  large  commercial  results  in  this  line  of  work. 
Here,  again,  there  are  several  methods  of  selective  flotation 
the  full  details  of  which  are  not  yet  available  to  the  public, 
while  some  of  the  schemes  are  very  probably  not  thoroughly 
worked  out.  In  selective  flotation  there  is  a  vast  field  open  for 
proved  methods,  and  I  believe  there  is  a  bright  future  along 
this  line  of  operation. 

In  mechanical  improvements  the  greatest  efforts  appear  to 
have  been  concentrated  in  developing  agitating  machines  of 
many  and  varied  designs.  These  may  be  divided  into  two  gen- 
eral types — vertical  agitators  and  horizontal  agitators — the 
latter  apparently  in  the  lead.  The  vertical  agitator,  with  the 
hollow  shaft  through  which  air  is  drawn  down  into  the  pulp, 
takes  a  prominent  place  but  is  scarcely  novel.  Machines  of 
this  type  have  been  used  over  30  years  ago  for  amalgamation 
and  for  oxidizing  the  impurities  in*  mercury.  The  horizontal 
agitator,  drawing  in  its  air  around  a  central  shaft,  appears  to 
me  both  novel  and  efficient.  I  refer  to  the  type  having  agitat- 
ing drums  of  a  length  of  3  to  6  diameters,  which,  fan  like, 
draw  in  air  around  the  horizontal  shaft  from  both  ends.  The 
drums  operate  at  the  bottom  of  the  flotation  cell  providing  a 
quick  passage  for  the  ascending  bubbles,  mineral-laden,  to 
reach  the  surface  in  a  short  and  direct  route  and  discharge 
their  burden  into  the  overflow  launders  on  either  side  of  the 
cell.  No  filter  or  canvas  bottom  is  used,  and  for  acid  processes 
this  type  of  agitator  offers  very  great  advantages. 

Some  Principles  of  Gravity  Concentration  and  Flotation  Alike 

More  attention  is  given  to  the  preparation  of  the  ore  for 
flotation  where  a  granular  product  with  minimum  slime  is 


RECENT  DEVELOPMENTS  IN  FLOTATION  609 

sought.  Some  principles  governing  gravity  concentration 
apply  equally  to  flotation ;  the  minerals  must  be  fully  liberated 
from  the  gangue  when  high-grade  concentrate  and  low-tailing 
is  desired.  In  gravity  concentration  it  is  invariably  admitted 
that  the  middling  product  remains  middling  until  re-ground  to 
liberate  the  minerals.  This  important  principle  was  not  rec- 
ognized in  flotation,  or  I  should  say  was  not  put  into  use  as 
early  as  it  might  have  been ;  yet  when  properly  applied  it  will 
decrease  operating  expense  by  permitting  coarser  crushing  in 
the  initial  stage,  and  will  also  increase  the  recovery  in  a  higher 
grade  concentrate. 

Returning  unground  middlings  from  concentrate  cleaning 
cells  to  the  mill  stream  usually  result  in  building  up  a  product 
that  in  time  escapes  in  the  tails  or  contaminates  the  concen- 
trate. Very  fine  initial  grinding,  it  is  true,  lessens  these  losses 
but  increases  the  percentage  of  slime,  a  product  that  seldom 
gives  the  best  recovery  even  in  bubble  flotation. 

Good  practice,  for  the  production  of  a  high-grade  concen- 
trate and  high  recovery,  in  my  opinion,  favors  coarse  initial 
crushing;  a  bulky  roughing  concentrate,  followed  by  one  or 
more  flotation  cleanings  of  this  concentrate,  with  the  re-grind- 
ing of  all  middlings  from  the  cleaning  cells  that  are  worth 
re-treating. 


610  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

THE    INFLUENCE    OF    FLOTATION    ON    METALLURGICAL 

PRACTICE 

By  FRANCIS  A.  THOMSON,  Dean,  School  of  Mines,  University  of  Idahc 

In  ten  years  flotation  has  revolutionized  the  entire  art  oJ 
ore  dressing.  At  its  inception,  the  writer — and  he  had  plentj 
of  distinguished  company — greeted  the  new  process  wit! 
skepticism,  and  felt  inclined  to  classify  it  as  simply  one  more 
of  that  great  array  of  abortive  ore-treatment  schemes.  Ii 
this  he  was  mistaken. 

Flotation  has  become  one  of  the  leading  metallurgical  pro 
cesses,  and  with  the  single  exception  of  the  smelting  of  iror 
ore  in  blast-furnaces,  no  other  method  approaches  it  in  mag 
nitude  of  tonnage  handled. 

In  a  paper  published  three  years  ago,  I  presented  some  esti 
mates  on  this  subject,  and  after  revising  these  for  1919  am 
1920,  I  would  give  the  following  figures: 

Tons 
Process.  per  annum. 

Iron  blast-furnace  smelting 75,000,000 

Flotation  plants 25,000,000 

Gravity  concentration  plants 18,000,000 

Copper  smelting  plants 5,000,000 

Gold  and  silver  milling  plants 5,000,000 

Copper  leaching  plants 2,500,000 

Lead    smelting   plants ! 2,000,000 

Zinc  smelting  plants , 750,000 

Zinc  leaching   plants 150,000 

These  are  frankly  estimates,  as  the  exact  figures  are  subjec 
to  considerable  variation  and  are  difficult  to  procure. 

So  much  for  the  place  of  flotation  on  the  quantitative  side 
now  as  to  the  changes  wrought  in  metallurgical  practice. 

Ore  Dressing 

First,  in  the  field  of  ore  dressing  itself,  flotation  has  pri 
marily  increased  recovery  to  a  point  never  previously  dreamei 
of.  For  instance,  Mr.  Frederick  Laist,  in  response  to  ai 
inquiry,  writes  as  follows :  "The  average  recovery  by  concen 
tration  at  Anaconda,  prior  to  the  installation  of  any  slim 
treatment,  was  about  78  per  cent.  The  20-deck  round  table 


INFLUENCE  OF  FLOTATION  ON  METALLURGY  611 

increased  the  recovery  to  about  85  per  cent.  This  recovery 
was  raised  by  flotation  process  to  about  96  per  cent."  In- 
credible as  it  may  sound  to  those  expert  in  the  older  practice 
of  gravity  concentration,  there  are  authentic  instances  where 
upwards  of  99  per  cent,  recovery  was  maintained  for  several 
days  at  a^  time  in  moderate-sized  plants,  treating  particularly 
easy  ores. 

Almost  as  striking  as  the  remarkable  increases  in  recovery 
is  the  great  simplification  of  flow-sheets  and  of  plant  con- 
struction brought  about  by  flotation,  thus  decreasing  both 
first  cost  of  plant  and  Jabor  expense  for  operation.  On  the 
other  hand,  the  finely  divided  and  frothy  character  of  the  con- 
centrate produced  has  necessitated  the  addition  of  filters  and 
dryers  in  concentrating  plants ;  and  the  need  for  careful  con- 
trol of  pulp  dilution  has  increased  the  number  of  pulp- 
thickening  devices. 

Slime,  once  the  "bugaboo"  of  all  millmen,  is  no  longer 
feared.  There  are  some  metallurgists  who  claim  that  in  their 
particular  plants,  slime  is  an  indispensable  factor  in  the  suc- 
cessful flotation  of  their  ore.  A  secondary  result  of  this 
aspect  has  been  the  rapid  development  and  application  of 
various  types  of  ball-mills. 

Each  ore  is  a  problem  in  itself,  and  in  no  process  are  skill 
and  technique — both  in  preliminary  testing  and  in  plant 
operation — so  necessary  as  in  flotation.  This  is  one  of  its 
disadvantages.  It  is  undoubtedly  true,  however,  that  many 
millions  of  tons  of  ore  are  being  concentrated  today  which 
would  be  left  on  dumps  or  in  mines  had  it  not  been  for 
flotation. 

Ferrous  Metallurgy 

So  far  as  I  am  aware,  the  field  of  ferrous  metallurgy  is  as 
yet  uninfluenced  by  flotation  unless  we  care  to  place  under 
this  "head  the  recovery  of  molybdenum,  tungsten  and  other 
ferro-alloy  constituents  by  flotation. 

Treatment  of  Gold  and  Silver  Ores 

In  the  treatment  of  these  ores,  flotation  has  not  filled  as 
important  a  place  as  its  advocates  predicted  for  it.  Cyanida- 
tion,  supplemented  to  a  constantly  decreasing  extent  by 


612  PROCEEDINGS    OF    AMERICAN   MINING    CONGRESS 

amalgamation,  still  holds  the  field.  It  is  possible,  experimen- 
tally, to  show  a  high  recovery  of  gold  by  floating  certain  ores. 
Generally,  the  gold,  in  part  at  least,  is  so  finely  divided,  that 
crushing  ore  through  approximately  200-mesh  is  necessary 
for  its  liberation;  and  there  is  still  some  difficulty  in  large- 
scale  flotation  of  ores  crushed  to  that  fineness. 

It  is  also  true  that  many  profitable  gold  mines  are  situated 
in  remote  places  from  which  the  transportation  cost  prohibits 
the  shipment  of  anything  but  bullion,  compelling  the  process  to 
be  one  of  ultimate  extraction  rather  than  of  concentration. 

In  the  treatment  of  complex  gold  and  silver  ores  which 
render  the  cyanide  consumption  prohibitively  high,  or  from 
which  no  satisfactory  extraction  can  be  made,  flotation  has  a 
field. 

In  the  case  of  oxidized  ores  of  silver,  where  the  primary 
sulphide  ore  is  not  amenable  to  cyanidation,  it  may  be  more 
profitable  to  sulphidize  and  then  float  the  silver  and  other 
sulphides  thus  produced,  than  to  erect  a  cyanide  plant  for  the 
oxide  ore  and  a  flotation  plant  for  the  sulphide. 

Treatment  of  Copper  Ores 

It  is  probably  in  the  metallurgy  of  copper  that  the  flotation 
process  has  exerted  its  most  powerful  influence.  The  changes 
at  Anaconda  are  the  best  illustration  of  this  fact,  as  this  com- 
pany had  a  well-established  large-scale  works  before  the  ad- 
vent of  flotation,  and  a  comparison  of  the  older  practice  with 
the  new  makes  this  clear. 

Coincident  with  and  in  a  large  measure  due  to  the  intro- 
duction of  flotation,  the  blast-furnace  has  gradually  been 
superseded  by  the  reverberatory.  Most  new  plants  are  de- 
signed for  these  furnaces.  The  reason  is,  of  course,  obvious : 
No  one  is  going  to  pour  a  stream  of  fine  concentrates  into  a 
furnace  with  a  gale  of  wind  (the  blast)  blowing  through  it. 

The  great  increase  in  volume  of  finely-divided  concentrates 
has  lead  to  additional  roasting  capacity,  and  to  the  necessity, 
therefore,  of  more  apparatus  for  catching  and  treating  the 
dust  therefrom. 

Flotation  has  also  checked  the  development  of  treatment  of 
sulphide  copper  ores  and  tailings  by  leaching.  Reverting  to 
Anaconda,  we  find  the  conclusion  there  is  that  while  equally 


INFLUENCE  OF  FLOTATION  ON  METALLURGY  613 

good  results  at  approximately  the  same  cost  can  be  secured  on 
sulphide  tailings  by  flotation  and  by  leaching,  nevertheless 
flotation  recovers  the  silver  while  leaching  does  not.  This 
applies  only  to  sulphide  ores  of  copper;  oxidized  and  semi- 
oxidized  ores  will  probably  continue  to  be  treated  by  leaching. 

Treatment  of  Lead  Ores 

In  the  treatment  of  lead  ores  flotation  so  far  has  wrought 
no  striking  changes.  If  the  D wight-Lloyd  sintering  machines 
had  not  been  developed  almost  coincidently  with  the  develop- 
ment of  flotation,  then  something  of  the  kind  would  have  been 
so  indispensable  as  to  demand  and  ensure  its  development. 
However,  the  lead  smelter  finds  himself  seriously  embarrassed 
by  the  nature  of  the  material  that  he  is  receiving.  Much  of 
the  flotation  concentrate  shipped  to  him  is  in  the  form  of 
gummy,  sticky  slime,  which  will  neither  leave  shovels,  dump 
from  wheelbarrows,  run  in  bins,  nor  permit  itself  to  be 
handled  by  any  of  the  means  commonly  used  for  the  storage 
and  transportation  of  concentrates. 

Treatment  of  Zinc  Ores 

Similar  difficulties  are  encountered  at  zinc  smelters.  It  is 
stated  that  at  times,  additional  troubles  have  been  met  with 
by  reason  of  retort  explosions,  due  to  the  fine  state  of  division 
in  which  the  flotation  concentrate  comes  to  the  plant.  In 
response  to  an  inquiry  on  the  subject,  Dr.  Charles  H.  Fulton 
writes:  "The  zinc  smelter  seriously  objects  to  flotation  con- 
centrate and,  unless  covered  by  special  contract,  assesses  a 
penalty  at  the  present  time  of  $10  per  ton  for  concentrate 
when  it  originates  from  flotation.  The  reason  for  this  is  the 
losses  caused  during  roasting  and  the  difficulty  of  roasting 
such  fine  material  in  the  present-day  furnace.  There  is  also 
an  objection  to  the  fineness  of  the  material  in  the  retorting 
itself,  as  impurities  are  mechanically  carried  over  into  the 
spelter." 

So  far  as  the  new  and  rapidly  developing  art  of  zinc  leach- 
ing, followed  by  electrolytic  precipitation  is  concerned,  I  can- 
not do  better  than  quote  from  a  recent  letter  from  Mr.  J.  0. 
Elton,  to  whom  is  due  in  a  large  measure  the  successful 
development  of  this  process : 


C14  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

Flotation  concentrates  are  the  only  zinc  concentrates  that  can 
be  treated  to  advantage,  in  the  electrolytic  zinc  plant  without 
special  fine  grinding.  Even  table  concentrates  are  too  coarse. 
While  the  fineness  of  the  roaster  feed  increases  the  dusting,  the 
time  of  the  roasting  period  is  cut  down  and  the  temperature 
necessary  for  the  elimination  of  the  sulphur  from  the  fine  par- 
ticles is  much  lower,  thus  decreasing  the  percentage  of  ferrate 
formed.  With  adequate  dust-catching  equipment  the  objection  to 
a  fine  feed  largely  disappears.  The  finer  the  particles  the  quicker 
the  chemical  reactions  take  place;  that  is,  the  solution  of  the  zinc 
oxide  and  the  precipitation  of  the  iron,  arsenic,  alumina  and  silica, 
with  a  relatively  small  excess  of  calcine.  It  is  nearly  impossible 
to  wash  zinc  sulphate  solution  from  the  residue  resulting  from 
coarse  calcine  when  all  the  washing  is  done  on  Oliver  filters.  A 
vacuum-filter  will  not  pick  up  the  coarse  partcles  which,  there- 
fore, collect  causing  frequent  and  expensive  delays  to  filter,  pump 
and  settler  equipment.  I  will  say  that  the  finer  the  concentrates 
the  better  they  are  for  the  electrolytic  zinc  process. 

Finally,  and  in  conclusion,  I  think  it  safe  to  say  that  while 
flotation  has  increased  the  recovery  in  ore  dressing  on  an 
average  of  from  10  to  20  per  cent.,  it  may  be  said  also  to  have 
increased  the  difficulties  of  the  metallurgist  who  is  treating 
his  ores  by  smelting.  It,  however,  gives  to  the  field  of  hydro- 
metallurgy  an  initial  advantage  in  that  the  material  received 
is  already  finely  ground  and  in  good  condition  for  leaching 
after  roasting.  1  am  willing  to  venture  the  prophecy  that  in 
the  next  25  years  flotation  and  hydro-metallurgy,  advancing 
hand  in  hand,  will  in  large  measure  have  displaced  the  present 
methods  of  pyro-metallurgy  for  the  treatment  of  the  ores  of 
copper,  lead  and  zinc. 


INDUSTRIAL  GOLD  CONSUMERS'  SUBSIDY  615 


GOLD  CONFERENCE 


THE  INDUSTRIAL  GOLD  CONSUMERS'  SUBSIDY 

By  H.  N.  LAWRIE 
Chief,  Precious  Metals  Division  of  The  American  Mining  Congress 

Price  of  Gold  Fixed  By  Government 

There  are  480  grains  in  an  ounce  of  gold.  By  United  States 
statute  there  are  23.22  grains  of  fine  gold  in  the  standard  dol- 
lar. Dividing  the  number  of  grains  in  an  ounce  by  the  number 
of  grains  in  a  dollar,  the  quotient  obtained  is  20.6718  dollars, 
the  price  of  the  fine  gold  ounce.  That  the  Government  has 
arbitrarily  fixed  the  price  of  gold  has  been  questioned,  but 
this  fact  alone  determines  the  solution  of  the  gold  problem. 
Because  the  price  of  gold  is  fixed,  the  premium  specified  in  the 
McFadden  Bill  cannot  be  construed  as  a  subsidy  to  the  gold 
producer,  as  it  constitutes  a  compensation  of  the  loss  in  the 
purchase  power  of  the  gold  ounce,  and  for  the  same  reason 
the  consumer  of  industrial  gold  who  buys  the  metal  at  the 
pre-war  price  is  receiving  a  subsidy.  Fixed  in  price,  gold  can- 
not respond  to  the  law  of  supply  and  demand,  and  market 
conditions  differ  altogether  from  all  other  products. 

Purchase  Power  of  Gold  Ounce 

As  compared  to  1914,  the  average  purchase  power  of  the 
dollar  in  terms  of  the  wholesale  prices  of  all  commodities  dur- 
ing the  last  five  years  (1915-1919)  was  67  cents.  The  gold 
ounce,  the  only  source  of  income  to  the  gold  producer,  with  a 
purchase  power  of  $20.67  in  1914,  had  an  average  purchase 
power  during  the  last  five  years  (1915-1919)  of  $20.67  multi- 
plied by  0.67,  or  $13.85.  Had  the  $10  premium  been  in  effect 
during  this  five-year  period  the  purchase  power  of  the  gold 
ounce  would  have  been  $30.67  multiplied  by  0.67  equals  $20.54, 
or  13  cents  below  the  fixed  price  of  $20.67.  Opinions  have 
already  been  expressed  by  our  leading  financiers  and  econo- 


GIG 


PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 


OBSpJT  TO  CONSnvERS  0?  OOIJ) 
MABTJTACTORES  AMD  THE  ARTS. 
PAID  BY  GOLD  PRODUCERS  v 


20,000,060 


10,000,000 


50,000,000 


20,000,000 


10,000,000 


1916  1917 

CALENDAR  YEARS 


Chart  1. — Subsidy  paid  by  gold  producers  to  U.  S.  Government  and  con- 
sumers of  gold  in  manufactures  and  the  arts,  based  on  production  and 
decline  in  purchase  power  of  dollar,  1914-1919. 

mists  that  it  will  be  a  matter  of  ten  years  before  the  1914 
dollar  will  have  regained  even  a  large  part  of  its  purchase 
power,  and  many  question  that  it  will  ever  return  to  its  pur- 
chase power  of  1914.  It  would  be  most  liberal  to  assume, 
therefore,  that  the  1914  dollar  will  regain  its  purchase  power 
during  the  five-year  period  (1920-1924),  in  which  event  the 
average  purchase  power  of  the  dollar  during  this  five-year 
period  would  be  less  than  67  cents,  the  average  during  the 
period  of  uprising  prices  (1915-1919).  The  purchase  power 
of  the  gold  ounce,  including  the  $10  premium,  based  on  67 
cents  as  the  purchasing  power  of  the  dollar,  would  be  $20.54 
during  the  period  (1920-1924),  the  same  as  if  the  premium 
had  been  in  effect  during  the  period  (1915-1919).  It  is  fun- 
damental to  the  maintenance  of  a  normal  gold  production  dur- 
ing this  abnormal  period  that  the  purchase  power  of  the  ounce 
be  restored  to  normal  as  compared  to  1914.  The  McFadden 
Bill  providing  a  premium  of  $10  an  ounce  for  the  newly  pro- 
duced gold  will  accomplish  this  result. 


INDUSTRIAL  GOLD  CONSUMERS'  SUBSIDY  617 


no 


1914       1915       1916       1917       1918       1519 


Chart  2. — Decline  in  purchase  power  of  dollar  based  upon  the  wholesale 
price  index  numbers,  1914rl919. 


618 


PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 


INDUSTRIAL  GOLD  CONSUMERS'  SUBSIDY  619 

Subsidy  Paid  by  Gold  Producers 

Had  the  price  of  gold  ascended  to  the  average  wholesale 
price  of  all  other  commodities  during  the  five-year  period 
(1915-1919),  the  gold  producers  would  have  received  for  the 
amount  of  gold  they  actually  produced  $218,280,000  more  than 
the  amount  which  they  did  receive  of  $404,509,000.  Of  the 
$218,280,000,  the  amount  which  would  have  been  paid  by  the 
industrial  consumers  of  gold  would  have  been  $133,686,000 
for  the  gold  actually  consumed,  while  the  Government  would 
have  paid  $84,594,000  upon  the  monetary  gold  surplus.  Inas- 
much as  the  price  of  gold  has  been  fixed,  these  respective 
amounts  may  be  construed  as  subsidies  paid  by  the  gold  pro- 
ducers to  the  industrial  consumers  of  gold  and  also  to  the 
Government,  which  received  the  monetary  surplus.  Since 
there  was  no  monetary  surplus  in  1919  the  industrial  con- 
sumers of  gold  benefited  by  the  entire  subsidy  of  $65,500,000. 
It  is  reasonable  to  assume  that  if  the  premium  had  been  in 
effect  during  the  entire  period  (1915-1919),  which  would  have 
insured  a  normal  (1914)  purchase  power  of  the  ounce,  the 
gold  production  of  1915,  $100,000,000,  would  have  been  main- 
tained throughout  the  period,  in  which  event  the  gold  pro- 
ducers would  have  received  $500,000,000,  the  monetary  price, 
plus  $250,000,000,  the  premium,  a  total  of  $750,000,000,  or 
$345,491,000  more  than  actually  received. 

Excise  Compensates  for  Industrial  Subsidy 

In  imposing  the  excise  of  50  cents  a  pennyweight,  which  is 
equivalent  to  $10  an  ounce,  for  the  gold  contained  in  manu- 
factured articles,  the  McFadden  Bill  enables  the  industrial  con- 
sumer to  pay  more  nearly  the  anticipated  cost  of  production 
during  the  forthcoming  five-year  period,  an  amount  which 
when  paid  to  the  producer  of  new  gold  will  re-establish  the 
purchase  power  of  the  ounce  to  its  status  of  1914,  and  will 
therefore  insure  the  normal  production  of  gold  in  the  United 
States. 

Monetary  Necessity  for  Immediate  Remedy 

Gold  production  of  the  United  States  this  year  (1920)  will  be 
between  $40,000,000  and  $50,000,000,  less  than  50  per  cent,  of 
the  1915  production;  and  unless  some  remedy  as  is  provided 


G20          PROCEEDINGS   OF   AMERICAN  MINING    CONGRESS 

for  in  the  McFadden  Bill  is  expedited,  the  production  for  the 
ensuing  years  will  rapidly  approach  the  vanishing  point,  as  the 
gold  mines  of  the  country  continue  to  shut  down.  By  reason 
of  the  monetary  necessity  for  maintaining  the  normal  gold 
production  of  the  United  States,  especially  during  this  period 
of  credit  and  currency  contraction,  of  protecting  the  monetary 
gold  reserve  from  further  industrial  depletion  and  of  safe- 
guarding the  gold  standard  itself,  Congress  should  provide  a 
remedy  without  delay  in  the  interest  of  national  security. 


PRESENT  CONDITION  OF  THE   GOLD-MINING  INDUSTRY 

IN  CALIFORNIA 

By  FLETCHER  HAMILTON,  State  Mineralogist,  San  Francisco,  Cal. 

In  California  we  produce  over  50  different  varieties  of  min- 
erals, the  total  production  in  1919  being  close  to  $200,000,000. 

I  will  confine  myself  to  the  gold  situation  in  California,  as 
well  as  a  few  remarks  upon  the  McFadden  Bill. 

I  spent  the  last  six  weeks  (Oct.-Nov.,  1920)  in  making  an 
auto  trip  through  the  various  counties  of  California,  covering 
4000  miles,  and  in  that  time  I  did  not  cover  one-half  of  the 
State,  but  merely  the  points  where  I  thought  some  good  could 
be  done,  and  some  education  started  along  the  lines  which 
would  bring  the  business  people,  the  bankers  as  well  as  the 
miners  of  California,  to  the  point  where  they  would  realize 
that  the  gold  situation,  not  only  of  the  State  of  California,  but 
of  the  United  States  was  at  a  critical  point.  We  all  know  the 
conditions  confronting  the  gold  mining  industry,  the  high 
cost  under  which  they  are  operating,  but  the  industry  is  labor- 
ing under  a  condition  which  no  industry  has:  they  have  a 
fixed  price  for  their  product. 

The  Status  of  Gold 

The  premise  upon  which  gold  is  being  studied  is  this:  that 
the  gold  miner  himself  is  not  looking  for  relief  for  the  gold 
industry  because  of  the  fact  that  he  is  in  difficulties,  but 
we  are  looking  for  relief  for  the  gold  mining  industry  be- 
cause of  the  fact  that  the  gold  reserve  of  the  nation  is  being 
depleted  by  the  use  of  gold  in  the  arts  and  trades  to  a  greater 


GOLD  MINING   IN  CALIFORNIA  621 

extent  than  it  is  being  produced  in  the  United  States.  Last 
year  there  was  consumed  $20,000,000  over  production,  and  this 
year  there  will  be  consumed  in  the  United  States  some  thirty 
or  forty  million  dollars  over  production,  and  that  is  being 
taken  from  the  gold  reserve. 

In  California,  in  making  this  trip,  I  wanted  to  familiarize 
myself  personally  with  the  conditions,  and  all  I  can  say  is, 
coming  from  a  gold  State — the  primary  gold  State  of  the 
nation — that  it  is  a  shame  to  see  the  mining  camps  and  the 
mines  themselves  forced  to  close  down  because  of  the  unnatural 
conditions  which  prevail  at  this  time.  In  Trinity  county  there 
were  three  stamps  operating,  when  in  the  past  there  had  been 
perhaps  a  hundred  stamps  dropping.  In  Amador  county, 
where  in  the  years  past  there  were  five  to  six  hundred  stamps 
at  work,  we  have  today  the  equivalent  of  sixty  stamps.  In 
Calaveras  county,  in  1914,  there  were  494  stamps  dropping, 
and  today  there  are  50  stamps.  In  Tuolumne  county,  where 
there  were  300  stamps  crushing,  today  there  is  not  a  stamp 
operating  in  the  county.  In  Kern  county,  the  Yellow  Aster, 
which  had  100  stamps,  is  not  operating  today.  So  the  history 
goes  throughout  the  State,  and  it  does  not  mean  only  that 
stamps  are  not  dropping,  but  it  means  that  the  population  of 
the  mining  counties  of  California  is  dropping  off — for  example, 
in  Calaveras  county  the  decrease  shown  by  the  census  of  1920 
was  40  per  cent. — and  I  take  it  that  this  as  well  pertains  to  the 
other  gold  producing  States — that  the  gold  mining  counties 
are  losing  population ;  and  it  is  not  only  at  the  expense  of  the 
mining  counties  that  the  population  which  developed  the  nat- 
ural resources  of  the  State  is  being  depleted,  but  at  the  expense 
also  of  the  valleys  and  the  big  towns,  because  if  we  are  going 
to  progress  we*  must  maintain  our  population  in  the  develop- 
ment of  our  natural  resources.  You  can  not  point  out  any 
industry  in  the  United  States  that  is  not  dependent  in  some 
way  or  other  upon  the  mineral  resources  of  the  country,  and 
I  must  say  that  it  is  absolutely  necessary  that  education  ex- 
tend to  all  the  people  of  the  United  States  in  order  that  they 
may  realize  that  the  mineral  industry  must  be  supported  both 
by  the  nation  and  by  the  States.  If  we  are  going  to  have 
any  relief  for  the  situation  which  confronts  us,  it  must  be 
quickly  applied,  and  the  only  application  that  will  be  satisfac- 
tory, or  will  be  successful,  is  the  application  of  public  opinion. 


622  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

The  mining  people  themselves  in  their  industry  do  not  consti- 
tute a  great  percentage  of  the  population  of  the  United  States, 
and  it  must  be  that  we  should  go  and  educate  and  tell  our  story 
to  the  balance  of  the  nation  if  we  are  going  to  have  any  suc- 
cessful legislation;  and  it  was  with  that  idea  in  view  that  I 
made  the  trip  through  the  State  of  California,  and  I  should 
like  to  see  it  done  in  other  States. 

The  McFadden  Bill 

The  relief  which  we  are  working  for  is  embodied  in  the 
McFadden  Bill.  I  will  not  go  into  the  history  of  it,  but  I  should 
like  to  point  out  some  of  the  salient  features  in  order  that  you 
may — those  who  are  familiar  with  it — carry  the  voice  to  those 
people  who  should  be  advised. 

The  McFadden  Bill  provides  for  the  maintenance  of  the  pro- 
duction of  gold  in  order  that  it  may  satisfy  the  wants  of  the 
arts  and  trades,  that  our  gold  reserve  may  not  be  depleted.  To 
do  that,  it  is  proposed  to  place  an  excise  tax  upon  the  manu- 
factured article  in  which  gold  is  used.  That  in  no  way  affects 
the  monetary  value  of  the  gold.  The  excise  tax  so  collected  is 
placed  in  a  premium  fund,  and  from  that  fund  the  miner  of 
the  new  gold  is  paid  a  premium  of  $10  per  ounce.  In  other 
words,  there  is  an  open  market  for  gold  at  the  established 
standard  value  of  $20.67,  and  the  tax  is  collected  only  upon  the 
manufactured  article. 

It  seems  to  me  that  every  business  organization  in  this  coun- 
try should  take  action  on  a  measure  which  so  vitally  affects 
the  business  of  the  country,  and  I  would  like  to  see  a  campaign 
started  which  would  get  in  touch  with  these  organizations  and 
get  results  from  them.  We  have  had  some  opposition  to  the 
McFadden  Bill  by  the  jewelers,  who  based  this  attitude  on 
the  grounds  that  paying  the  gold  producer  a  premium  of  $10 
an  ounce  would  be  granting  a  subsidy  to  that  industry  at  the 
expense  of  the  jewelry  trade.  If  you  will  just  look  upon  the 
other  side,  you  will  realize  today  that  the  gold  consumer  is 
being  subsidized  by  the  United  States  because  of  the  very  fact 
that  he  is  being  supplied  with  his  raw  product  at  a  fixed  price. 
There  is  no  economic  formula  which  will  allow  the  life  of  any 
industry  in  a  time  of  rising  costs  when  it  must  sell  its  product 
at  a  fixed  price. 


GOLD  MINING   IN  CALIFORNIA  623 

Views  of  the  Bankers  not  Consistent 

There  has  also  been  opposition  by  bankers  stating  that  there 
is  too  much  gold  in  the  country,  and  in  the  same  breath  they 
say  that  this  gold  problem  is  an  international  question,  but 
they  do  not  say  in  the  same  breath  that  there  is  too  much  gold 
in  the  world.  It  is  merely  that  there  is  too  much  in  the  United 
States.  So  the  problem  is  the  distribution  of  the  gold,  and  not 
the  fact  that  no  new  gold  is  necessary.  Five  years  ago  there 
was  not  any  bank  that  would  have  stated  that  there  was  too 
much  gold  in  the  country.  If  we  are  going  to  maintain  the 
ordinary  process  of  business,  we  must  get  the  added  increment 
to  our  gold  reserve.  A  commission  appointed  some  years  ago 
figured  that  the  normal  gold  reserve  of  the  United  States 
should  be  $2,000,000,000,  and  the  required  added  increment  to 
that  should  be  about  10  per  cent,  annually.  Instead  of  that, 
we  have  been  registering  a  decrease  in  production.  You  may 
not  realize  it,  but  the  State  of  California  alone  has  produced 
practically  the  normal  gold  reserve  of  the  United  States  in  the 
last  70  years.  California  has  produced  today  $1,723,000,000 
in  gold  bullion. 

Now,  that  seems  to  me  to  define  to  the  Government  a  policy 
not  involving  a  period  of  two  or  three  or  four  years,  but  they 
should  look  ahead  for  the  next  50  or  60  years  and  see  to  it  that 
the  industry — the  gold  mining  industry — which  gives  to  it  the 
standard  product. on  which  its  monetary  system  is  based,  and 
on  which  all  international  financial  principles  are  based,  is 
maintained  and  put  in  such  position  that  it  can  get  its  gold 
production  as  it  is  needed. 

A  Tax  Levied  in  France 

We  have  had  some  opposition  also  by  people  who  would  say 
that  this  is  not  the  proper  policy  to  pursue,  that  the  principle 
is  wrong.  I  state  to  you  that  the  Government  of  France  has 
had  for  many  years  past  a  sumptuary  tax  upon  the  use  of  gold 
as  a  commodity,  or  the  use  of  gold  in  the  arts  and  trades,  and 
in  June  of  this  year  they  passed  a  further  sumptuary  tax,  or 
an  excise  tax  upon  the  use  of  gold  as  a  commodity,  and  you 
did  not  find,  when  they  passed  that,  that  there  was  any  change 
in  the  monetary  value  or  the  exchange  rate  on  the  franc,  and 


624  PROCEEDINGS    OF    AMERICAN   MINING    CONGRESS 

it  was  proved  that  such  a  tax  did  not  affect  in  any  way  the 
monetary  value  of  the  gold. 

It  is  also  stated  sometimes  that  other  Governments  are  not 
giving  relief,  and  that  it  is  due  purely  to  the  matter  of  ex- 
change that  exists  that  the  British  Government  is  able  to  get 
a  higher  price  or  a  premium  for  its  gold. 

I  possess  a  report  of  Sir  Evelyn  A.  Wallace,  president  of 
the  Transvaal  Chamber  of  Mines,  and  I  should  like  to  read  a 
few  sentences  of  that  report,  which  places  on  record  the  fact 
that  although  there  is  not  an  open  market  for  gold  in  England 
today,  the  gold  mines  of  South  Africa  and  Australia  are  en- 
abled through  an  express  agreement  with  the  Bank  of  England 
to  sell  their  product  and  thereby  obtain  a  premium.  This 
address  was  made  before  the  Transvaal  Chamber  of  Com- 
merce on  March  22,  1920.  It  goes  on  to  state: 

"Since  the  24th  of  July,  1919,  we  have  been  able,  under 
the  new  agreement  with  the  Bank  of  England,  to  mar- 
ket our  gold  not,  indeed,  to  the  best  advantage,  since  the 
Government  of  India  is  reserving  the  best  for  its  own 
operations,  but  to  considerably  increased  advantage.  The 
result  of  this  has  been  that  during  the  last  five  months 
of  1919  we  obtained  about  £3,000,000  more  than  we 
should  have  obtained  had  we  been  restricted  to  the 
standard  price.  Beginning  at  approximately  16  per  cent, 
the  premium  has  varied  up  to  44  per  cent.,  the  average  up 
to  the  latest  date  of  which  we  have  advice  being  26-V4  Per 
cent.,  and  the  last  cable  states  that  the  premium  is  ap- 
proximately 33!/2  Per  cent." 

So  it  shows  that  although  there  was  a  closed  market  for 
gold  in  England,  the  Government  has  realized  the  necessity 
for  maintaining  their  gold-mining  operations  intact,  and  they 
have  made  a  special  agreement  whereby  their  mining  opera- 
tions, or  their  mining  properties,  may  obtain  for  their  prod- 
uct a  higher  price  or  a  premium  for  their  gold. 

Now  jt  seems  to  me  that  the  United  States,  in  the  financial 
position  which  it  is,  should  see  to  it  that  the  confidence  of 
the  world  is  maintained  in  the  financial  integrity  of  the  United 
States,  to  the  extent  that  its  gold  production  is  maintained 
and  the  gold  reserve  of  the  nation  maintained. 

I  should  like  to  see  the  American  Mining  Congress  give  a 
great  deal  stronger  support  in  the  efforts  to  bring  about  this 
relief  to  the  industry,  and  I  believe  that  the  gold-mining  inter- 


GOLD  MINING   IN  CALIFORNIA  625 

ests,  as  well  as  the  nation  itself,  should  give  to  Mr.  H.  N. 
Lawrie,  who  has  spent  so  much  time  and  who  has  sacrificed 
his  own  personal  affairs  in  order  to  study  this  question,  the 
support  which  would  enable'  this  legislation  to  be  carried 
through  to  a  successful  conclusion.  It  is  right  and  it  is  just, 
and  I  believe  it  is  absolutely  in  order  that  we  maintain  the 
financial  position  of  which  we  boast. 


THE  CONDITION  OF  THE  GOLD  PRODUCER  IN  COLORADO 
By  GEORGE  E.  COLLINS,  Consulting  Mining  Engineer,  Denver,  Col. 

The  condition  of  the  gold  mines  in  this  State  may  be  best 
illustrated  by  a  simple  recital  of  ascertained  fact.  In  the  five 
years  from  1915  to  1919,  the  production  steadily  declined  from 
$22,500,000  to  $9,750,000.  In  1920,  the  production,  assuming 
that  November  and  December  continue  at  the  same  rate  as 
the  rest  of  the  year,  will  be  less  than  $7,250,000. 

The  first  year's  drop  was  15  per  cent.,  the  second  nearly 
17  per  cent.,  the  third  20  per  cent.,  the  fourth  over  23  per 
cent,  and  this  year  (1920)  nearly  26  per  cent.  In  other  words, 
the  decrease  has  been  steady  and  continuous  at  an  advancing 
ratio.  There  is  every  reason  to  expect  that  if  present  condi- 
tions continue,  the  production  in  1921  will  decline  to 
$5,000,000. 

De-population  of  Mining  Towns 

What  does  this  involve?  In  the  first  place  it  involves  the 
de-population  of  thriving  communities,  homes  broken  up,  the 
savings  of  a  life  time  sacrificed,  families  parted.  Typical 
gold-mining  towns  such  as  Cripple  Creek  and  Central  City  are 
almost  deserted.  Houses  are  being  torn  down,  and  the  lumber 
shipped  away.  Mining  railroads,  such  as  the  Cripple  Creek 
Short  Line,  the  Boulder  &  Northwestern  and  the  Gilpin  Tram- 
way, have  gone  out  of  business,  and  in  some  cases  have  already 
been  scrapped.  Mines  are  being  abandoned,  and  their  work- 
ings are  caving  or  filling  with  water.  Most  of  the  men  who 
used  to  work  in  the  mines  have  left  and  gone  into  other  lines 
of  employment. 


626  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

Comparing  the  condition  of  the  gold  industry  with  that  of 
other  States,  it  would  seem  that  our  decrease  has  been  greater. 
California  in  particular,  which  in  1915  produced  almost  exactly 
the  same  amount  as  Colorado,  by  1919  had  dropped  only  to 
$17,330,000,  although  there  is  reason  to  fear  that  1920  will 
show  a  much  larger  decrease. 

What  is  the  reason  for  these  differences?  Why  has  Colo- 
rado, as  a  gold-producing  State,  suffered  so  much  more  than 
California? 

The  reason  is,  I  think,  largely  because  California  produces 
gold  mainly  in  the  form  of  bullion,  whereas  our  own  produc- 
tion consisted  to  a  greater  extent  of  gold  contained  in  ores 
and  concentrates,  which  were  shipped  to  the  custom  smelters 
and  treatment  plants.  The  figures  "supplied  to  me  by  indi- 
vidual producers  show  that  the  falling  off  in  the  case  of  the 
mines  and  districts  which  produce  gold  as  bullion  was  not  as 
serious  as  in  those  which  shipped  to  smelters.  This  is  con- 
firmed by  the  fact  that  from  1915  to  1919  the  gold  from  Colo- 
rado mines  deposited  in  the  Denver  Mint  fell  from  $14,304,- 
980  to  $7,648,044,  or  46y2  per  cent.,  whereas  the  gold  from 
Colorado  purchased  by  the  smelting  plants  dropped  from  ap- 
proximately $6,846,320  to  $2,175,745,  or  over  68  per  cent.  In 
1920  the  smelter  gold  will  apparently  increase  slightly,  but  I 
think  this  was  due  entirely  to  the  fact  that  the  new  mill 
at  the  Tomboy  produces  gold  entirely  in  the  form  of  concen- 
trates, whereas  heretofore  a  great  part  of  the  gold  from  this 
mine  went  to  the  Mint  in  the  form  of  retorted  gold. 

It  seems  evident  that  the  difference  arises  from  the  fact 
that  when  a  mine  reduces  its  own  gold  the  treatment  costs  are 
under  its  own  control.  To  some  degree  employes — and  espe- 
cially the  skilled  and  permanent  employes — of  treatment 
plants  are  influenced  in  their  demands  and  in  the  character  of 
the  work  which  they  produce  in  return  for  a  given  wage  by 
what  they  know  to  be  the  surplus  available  from  which  to  pay 
them.  Such  men,  usually  more  intelligent  than  the  mine 
employes  and  often  possessing  comfortable  homes,  are.  dis- 
inclined to  destroy  the  enterprise  by  which  they  live. 

Increase  in  Operating  Costs 

Actual  figures  show  that  in  two  of  the  largest  and  most 
representative  treatment  plants  in  the  State,  both  producing 


GOLD  MINING  IN  COLORADO  627 

• 

gold  almost  entirely  as  bullion  by  the  cyanide  process  in  dis- 
tricts widely  separated  and  physically  very  different,  the  treat- 
ment costs  from  1915  to  1919  increased,  respectively,  8  per 
cent,  and  60  per  cent.  In  the  same  mines,  during  the  same 
period,  the  mining  costs  increased,  respectively  98.8  per  cent, 
and  160  per  cent. 

According  to  my  own  experience  and  to  the  confidential 
figures  with  which  I  have  been  supplied,  this  tendency  is  uni- 
versal. Costs  of  mining  have  advanced  more  than  costs  of 
treatment  at  the  mine. 

In  the  case  of  mines  that  ship  ores  and  concentrates  to  the 
smelters,  this  is  not  true.  I  cannot  give  you  the  figures  from 
all  mines,  and  I  do  not  suppose  that  the  smelting  plants  are 
able  to  supply  them  as  a  whole,  even  if  they  were  willing  to 
do  so.  But  I  feel  confident  that  the  costs  of  smelting  have 
advanced  at  a  greater  ratio  than  the  costs  of  milling,  and  I  am 
still  more  sure  that  the  smelting  charges,  including  deduc- 
tions, show  a  still  greater  increase.  In  the  case  of  one  mine, 
which  was  among  the  principal  gold  producers  of  the  State, 
and  where  the  nature  of  the  ore  renders  it  entirely  dependent 
on  the  smelters,  the  freight  increase  has  been  57  per  cent., 
and  the  smelting  costs  have  been  doubled. 

Now  freight  and  smelting  are  a  first  charge  on  the  value 
of  the1  ore  shipped.  The  miner  does  not  share  the  proceeds 
of  the  ore  with  the  railroads  and  the  smelting  plant;  he 
receives  the  balance  after  their  charges  have  been  deducted. 
They  have  not  the  same  incentive  to  temper  the  wind  to  the 
shorn  lamb  which  may  be  supposed  to  influence  the  men  em- 
ployed in  a  mine-treatment  plant.  To  the  worker  in  the 
smelter,  his  employer  is  a  great  and  wealthy  international 
corporation;  he  does  not  realize  that  his  compensation  really 
comes  from  mines  which  are  struggling  to  make  both  ends 
meet,  usually  without  success.  The  increased  cost  can  be, 
and  is,  passed  on  to  the  miner. 

Smelting  and  Freight  Charges 

Nor  is  this  the  entire  story.  As  I  have  said,  the  freight  and 
smelting  rates,  direct  and  indirect,  are  a  first  charge  on  the 
proceeds  of  the  ore,  and  as  they  increase,  so  much  more  ton- 
nage of  ore  becomes  unpayable.  You  can  easily  realize  that 


628  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

if  you  increase  the  limit  at  which  ore  becomes  workable  from 
$5  to  $10,  you  are  certain  to  reduce  the  quantity  of  available 
ore  by  more  than  one-half.  In  the  case  of  the  mine  just 
alluded  to,  the  minimum  aggregate  freight  and  smelting 
charge  is  about  $11.50,  so  that  ore  loaded  into  railroad  cars 
must  run,  say,  $12  to  be  worth  billing  out.  Obviously,  there- 
fore, low-grade  ore,  which  has  to  be  shipped  to  the  smelter, 
has  ceased  in  Colorado  to  be  ore  at  all,  excepting  as  to  lime, 
and  iron  ores  from  Leadville,  Aspen  and  Kokomo,  which 
usually  do  not  contain  gold.  Without  going  further  into 
detail,  I  may  say  that  the  minimum  value  of  workable  smelt- 
ing ore,  excepting  in  the  districts  named,  is  now  $20  to  $30. 
The  minimum  value  of  workable  concentrating  ore  has  simi- 
larly increased  in  about  the  same  proportion.  The  result  is 
that  most  of  what  was  ore  in  Colorado  in  1915  has  ceased  to 
be  ore  in  1920,  and  will  continue  worthless  until  all  costs  have 
come  back  to  the  1915  level,  which  may  not  be  in  our  time. 

Meantime,  even  of  the  mines  which  are  still  producing  or 
are  in  a  condition  to  produce,  the  ores  which  were  of  higher 
grade  or  cheaper  to  handle  have  been  mined  out  in  the  strug- 
gle for  bare  existence,  and  in  almost  every  instance  develop- 
ment work  has  been  curtailed  or  suspended.  It  is  very  clear 
that,  while  the  proposed  bonus  of  $10  per  ounce  on  gold  will 
prevent  a  further  decline  in  the  gold  output,  no  increase  in 
production  will  be  possible  unless  in  addition  to  the  bonus  a 
considerable  reduction  in  working  costs  is  effected. 

Conditions  at  Cripple  Creek 

With  regard  to  the  Cripple  Creek  district  —  the  greatest 
gold-producing  area  in  the  State — while  it  operates  on  the 
custom-treatment  basis,  the  situation  is  more  favorable  than 
is  the  case  with  the  districts  which  ship  to  the  smelters.  Prac- 
tically all  of  the  production  goes  to  the  Golden  Cycle  mill  at 
Colorado  Springs,  which  purchases  the  ore  on  a  sliding-scale 
basis.  The  tonnage  treated  at  this  plant  fell  from  389,000 
tons  in  1915  (when  part  of  the  output  of  the  district  was  still 
treated  at  the  Portland  mill)  to  285,600  tons  in  1919.  The 
increased  cost  per  ton  in  1919,  as  compared  with  1916,  was 
about  35  per  cent.  The  cost  for  1915  was  probably  about  40 
per  cent,  less  than  in  1919. 


GOLD  MINING  IN  COLORADO  629 

Nevertheless,  thanks  to  the  enlightened  and  liberal  policy 
which  has  been  adopted  by  the  controlling  interests,  the  treat- 
ment charge  to  the  miner  has  not  been  increased.  Similarly, 
on  the  Midland  Railroad,  which  now  transports  all  ore  from 
the  mines  to  the  treatment  plant  at  Colorado  Springs,  the 
latest  increase  in  freight  rates  authorized  last  August  by  the 
Interstate  Commerce  Commission  has  not  been  put  into  effect. 
As  a  result,  the  output  from  this  district  has  not  been  so  com- 
pletely arrested  as  from  those  districts  which  ship  to  the 
smelting  plants,  and,  but  for  this  fact,  the  present  output  from 
Colorado  would  be  even  less  than  it  actually  is. 

The  figures  of  reduced  output  do  riot  tell  the  entire  story. 
Many  mines  have  managed  to  stave  off  the  evil  day  by  the  use 
of  various  expedients,  such  as  the  following : 

(a)  Concentration  of  production  on  the  richest  or 

most  cheaply  worked  ore  bodies. 

(b)  Reduction    or   entire    cessation    of   development 

work. 

(c)  Reduction   or    entire   cessation   of   maintenance 

expense. 

(d)  Consumption  of  stores  or  material  purchased  at 

pre-war  prices  and  failure  to  replace  them  at 
present  prices. 

(e)  Cessation  of  expenditure    on    investigation    and 

experiment,  and  reduction  of  staff. 

Most  gold  mines  have  been  compelled  to  adopt  some  of  these 
expedients  in  order  to  exist ;  many  have  had  to  adopt  them  all, 
and  yet  have  succumbed  after  a  greater  or  less  period  of 
struggle.  In  fact,  it  can  easily  be  seen  that  they  all  amount, 
in  the  long  run,  to  meeting  expenses  out  of  capital,  and  that 
actual  figures  of  cost  per  ton,  taken  from  the  books  of  opera- 
ting mines,  understate  the  facts.  It  is  clear  that  the  increase 
of  mining  costs  average  nearly  100  per  cent.  Now,  as  very 
few  mines  before  the  war  had  any  such  profit  margin,  it 
seems  evident  that  many  of  the  gold  mines  which  have  sur- 
vived have  been  enabled  to  do  so  only  because  some  change  in 
condition  has  offset  the  increase  in  costs.  In  other  words, 
most  of  the  gold  mines  which  are  still  working  are  those  in 
which  the  figures  of  cost,  for  one  reason  or  another,  are  not 
typical. 


630  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

A  Limit  to  Present  Conditions 

The  process  above  outlined  cannot  go  on  forever.  The  acute 
danger  of  the  situation  is  that  mines  are  getting  down  to 
where  they  can  no  longer  resort  to  such  temporary  expedients. 
A  large  proportion  of  the  gold  mines  in  the  States  which  are 
still  in  operation  are  reduced  to  a  situation  where  they  must 
spend  more  on  development  and  maintenance ;  must  have  new 
stocks  of  supplies;  must  purchase  new  plants  of  machinery, 
etc.,  or  go  out  of  business  altogether. 

The  urgency  of  the  problem,  in  so  far  as  it  affects  the 
Rocky  Mountain  States,  of  which  Colorado  is  the  principal 
one,  has  never  been  adequately  realized.  The  Jennings  Com- 
mittee, in  1918,  and  the  Strauss  Committee,  in  1919,  did  not 
include  men  qualified  by  personal  experience  to  appreciate  the 
special  problems  which  confront  this  important  part  of  the 
gold-mining  industry,  and  consequently  misread  the  outlook 
to  a  degree  which  todays  seem  hard  to  realize.  I  quote  from 
the  last-mentioned  report  to  the  Secretary  of  the  Treasury, 
under  date  February  11,  1919:  "Under  these  circumstances 
there  is,  in  our  opinion,  no  need  for  artificial  stimulation  of 
gold  production.  Not  only  has  any  need  therefor  passed,  but 
there  have  come  into  operation  causes  that  will  in  due  time 
restore  all  industry,  including  the  mining  of  gold,  to  a  normal 
basis.  Gold  mining  will  then  become  again  normally  profita- 
ble, and  respond  automatically  to  normal  stimuli." 

It  is,  of  course,  easy  to  prophesy,  and  easier  still  to  show, 
a  couple  of  years  later,  how  bad  a  guess  the  prophets  made. 
The  result  should,  however,  warn  us  to  avoid  this  spirit  of 
undue  optimism  for  the  future.  In  fact,  it  is  not  too  much 
to  say  that  the  warnings  of  decreased  gold  production,  made 
at  various  times  on  behalf  of  the  producers,  have  been  ful- 
filled to  the  letter,  and  that  the  optimistic  predictions  of  those 
who  have  belittled  the  gravity  of  the  situation  have  corre- 
spondingly falsified.  It  would  seem,  therefore,  that  so  far  as 
our  own  business  is  concerned  our  judgment  has  proved  to 
be  sound,  and  it  would  apparently  follow  that  in  any  future 
inquiry  as  to  gold  production  the  considered  judgment  of  the 
industry  itself  should  be  held  to  outweigh  the  opinions  of 
those  who  speak  without  first-hand  knowledge  of  the  facts. 
I  refer  especially  to  the  representations  made  before  the  Ways 


GOLD  MINING  IN  COLORADO  631 

and  Means  Committee  of  the  House  of  Representatives  on 
behalf  of  the  Jewelers*  Vigilance  Committee,  to  the  effect  that 
the  gold-mining  industry  could  very  well  stand  a  few  years  of 
low  profits  because  before  1916-1917  "they  had  had  a  long 
series  of  very  profitable  years,"  during  which  "they  were 
producing  gold  at  a  very  low  cost  and  amassing  large  profits." 
I  think,  that  taking  the  gold-mining  industry  as  a  whole,  that 
was  never  true. 

A  Bonus  or  Premium  Necessary 

In  view  of  the  exhaustion  of  our  resources,  forced  by  the 
attempt  to  pilot  the  industry  through  this  stormy  period;  in 
in  view  of  the  unfavorable  condition  of  our  mines  and  plants 
caused  by  sheer  necessity;  in  view  of  the  destruction  of  capi- 
tal, the  loss  of  trained  labor  and  organization,  I  will  ven- 
ture to  say  that  without  a  bonus  or  premium  on  gold  in  some 
form,  or  such  a  reduction  in  costs  as  will  amount  to  a  catas- 
trophe for  all  other  forms  of  industry,  the  production  of  gold 
in  Colorado  will  continue  to  decline.  If  the  world  needs  gold, 
as  I  believe,  and  as  most  of  the  bankers  and  economists  de- 
clare, then  the  world  must  pay  for  it,  and  the  longer  common 
justice  to  the  gold-mine  industry  is  delayed,  the  higher  will 
be  the  price  to  be  paid  ultimately. 

You  may  recall  the  legend  of  the  sibylline  books.  The 
sibyl  offered  Tarquin  nine  books  at  a  price  which  he  thought 
too  dear.  She  then  destroyed  three,  and  offered  the  remain- 
ing six  at  the  same  price,  which  he  again  refused.  She  again 
destroyed  three,  and  offered  the  remaining  three  books  at  the 
price  of  the  original  nine,  and  this  time  the  king  was  forced  to 
pay  the  price. 

Gold  Is  Needed 

So  will  it  be  with  the  gold-mining  industry.  The  world  will 
need  gold,  and  will  have  to  pay  whatever  price  is  necessary 
to  reopen  such  mines  as  can  produce  it.  Every  plant  scrapped, 
every  mine  which  caves  or  fills  with  water  will  merely  reduce 
the  value  of  the  asset  which  the  world  will  have  eventually  to 
redeem.  In  the  long  run  this  wasted  capital  will  have  to  be 
replaced;  true  national  economy  would  lead  us  to  maintain 
the  industry  at  its  maximum  productivity,  even  if  the  product 


632  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

can  for  the  moment  be  dispensed  with.  It  is  indestructible, 
and  is  essential  under  modern  conditions  as  insurance,  even 
if  it  does  not  constitute  intrinsic  wealth. 

At  the  time  when  the  Jennings  Committee  made  its  investi- 
gation, perhaps  even  when  the  Strauss  Committee  reported, 
the  output  of  gold  might  have  been  restored  to  a  maximum  in 
much  less  time,  and  at  one-half  the  ultimate  expense  to  the 
community  that  will  be  necessary  now. 

It  is  incontestably  true  that  so  long  as  the  flow  of  South 
African  gold  continues  at  its  present  rate,  and  so  long  as  it  is 
available  for  export  to  the  United  States,  the  effect  of  stimu- 
lation of  home  production  would  be  relatively  unimportant. 
But  neither  of  these  conditions  can  be  depended  on  to  continue 
indefinitely. 

The  gold  production  of  the  Rand  is  rapidly  falling  off,  and 
is  only  maintained  at  all  by  the  premium  which  arises  out 
of  the  difference  in  exchange. 

Moreover,  it  is  probable  that,  directly  the  continental 
European  nations  begin  to  do  business  on  any  large  scale,  they 
will  require  all  the  gold  available  outside  the  United  States 
with  which  to  settle  their  balances.  Had  the  war  ended,  as 
most  of  us  hoped,  in  the  millennium,  this  might  not  have  been 
true,  but  having  resulted  in  something  approaching  pande- 
monium, nations  will  trust  each  others'  papers  less  than  ever, 
and  will  give  less  credit,  so  that  balances  will  have  to  be  ad- 
justed more  frequently  and  more  promptly  than  heretofore, 
which  involves  the  use  of  gold  or  silver  in  greater  quantities. 


GOLD-MINING  CONDITIONS  IN  ALASKA 

By  MILNOR  ROBERTS,   Dean  of  The   College  of  Mines.  University   of 
Washington,  Seattle,  Wash. 

Alaska  offers  an  excellent  example  of  decreased  production 
of  gold  due  to  increased  cost  of  mine  operation.  The  condi- 
tions under  which  gold  mining  throve  in  past  years  in  our  rich 
northern  Territory  and  those  that  prevail  there  today  can  be 
discerned,  making  clear  the  causes  that  have  brought  about 
the  present  situation.  Perhaps  in  no  other  region  of  equal 
size  has  the  low  value  of  gold,  in  comparison  with  the  cost  of 


GOLD    MINING    IN   ALASKA  633 

mining  it,  had  such  a  disastrous  effect  on  the  industry  and  on 
the  region  in  general. 

Mining  the  Essential  Industry 

Alaska  is  principally  a  mining  country.  The  development 
of  its  settlements  and  routes  of  transportation  took  place  un- 
der the  pressure  of  mining  needs.  The  upbuilding  of  nearly 
all  its  towns,  except  the  fishery  centers,  accompanied  the  open- 
ing of  its  mines.  Although  some  of  the  coast  towns  existed 
as  fishing  and  trading  ports  prior  to  the  finding  of  gold  in  the 
Klondike  on  August  17,  1896,  their  real  growth  took  place 
after  that  date,  along  with  the  opening  of  the  territory  as  a 
whole.  Juneau,  the  capital  of  the  Territory  since  1906,  at- 
tained early  importance  through  the  Treadwell  mines,  which 
were  in  regular  operation  in  the  early  80's.  Seward,  another 
part,  was  founded  and  developed  as  the  coast  terminus  of  a 
railway  (now  owned  and  being  completed  by  the  Govern- 
ment) to  be  built  to  reach  nearby  mining  districts  and  the 
gold  fields  of  the  interior.  Cordova  also  is  a  railway  terminus 
and  ore-shipping  point.  All  the  cities,  towns  and  camps  of 
interior  Alaska,  without  exception,  grew  up  either  as  mining 
centers  or  as  stopping  places  on  routes  to  the  mines. 

If  gold  had  not  been  discovered  in  Alaska,  other  industries 
would  independently  have  made  more  or  less  growth  there 
following  the  rapid  settling  of  the  Pacific  Northwest  and  Brit- 
ish Columbia.  Sealing,  whaling  and  fishing  would  have 
brought  settlements  along  the  Alaskan  coast,  but  one  need 
only  consider  the  numerous  canneries  and  fishing  stations 
located  in  scattered  harbors  to  see  how  disconnected  such  a 
development  would  have  been  dependent  upon  an  industry 
that  is  active  only  a  few  months  in  the  year  and  that  employs 
largely  foreign  laborers  on  contract.  The  tourist  business 
alone  would  have  added  little.  The  fur  trade  would  have  been 
important  and  might  have  served  to  keep  open  certain  trails, 
river  camps  and  trading  posts,  but  the  hunter  and  trapper 
rarely  burden  themselves  with  many  belongings  or  seek  the 
opening  of  a  country.  Agriculture  and  stock  raising  even 
with  the  present  incentive  of  nearby  markets  at  the  mines 
have  made  only  a  little  headway,  although  they  have  a  good 
future.  It  seems  clear  that  no  cause  has  yet  arisen  in  Alaska 


634  PROCEEDINGS    OF    AMERICAN   MINING    CONGRESS 

that  would  have  served  to  develop  the  country  in  any  degree 
as  mining  has  done. 

The  current  life  and  activities  of  the  Territory,  as  distin- 
guished from  the  causes  of  its  settlement,  are  likewise  mainly 
dependent  on  mining.  The  exceptions  to  this  statement  are 
easily  noted  and  can  be  segregated  for  the  purpose  of  con- 
sidering the  condition  of  the  mining  industry.  The  only 
prominent  exception  consists  of  the  fishery  interests,  and 
these  are  confined  to  the  coast.  The  fur  trade  involves  a 
comparatively  small  number  of  persons,  and  the  same  may  be 
said  of  farming.  Indeed,  most  of  the  farming  depends  upon 
the  mines  for  disposal  of  its  products,  or  upon  other  lines  of 
industry  which,  in  turn,  serve  mining. 

From  whatever  standpoint  the  situation  is  viewed  it  will  be 
found  that  the  basic  industry  of  the  Territory  as  a  whole  is 
mining.  The  one  metal  that  far  outranks  all  others,  except 
copper,  which  prevails  along  the  coast  and  on  the  Copper 
River,  is  gold.  Therefore,  it  may  be  said  that  whatever 
influences  affect  gold  mining  have  a  bearing  also  on  most 
other  industries  in  Alaska. 

Decline  in  Production 

Gold  mining  has  suffered  a  great  decline  in  the  North  dur- 
ing the  past  few  years — a  period  in  which  it  has  been  dwin- 
dling elsewhere  in  the  United  States.  In  1905  the  gold  pro- 
duction for  Alaska  reached  a  value  of  $15,630,000,  and  in  the 
following  year  rose  to  its  record  figure  of  $22,036,794.  These 
two  totals  served  as  limiting  figures  for  the  output  during 
the  next  10  years.  At  the  close  of  that  period,  in  1916,  the 
production  was  $17,241,713.  Since  this  latter  figure  corre- 
sponds closely  to  the  average  for  the  12-year  period  of  which 
it  marks  the  end,  evidently  no  falling  off  in  production  had 
taken  place  up  to  1916,  but  thereafter  the  gold  output  de- 
creased rapidly.  In  1919  it  was  about  $9,000,000,  while  for 
the  present  year  (1920)  the  estimated  total  is  far  less.  Let 
us  consider  the  several  causes  that  may  have  had  a  part  in 
bringing  about  the  present  situation  in  Alaska. 

The  first  probable  cause  that  comes  to  mind  is  the  war.  At 
the  outbreak  of  the  war  in  1914  many  British  miners  in 
Alaska,  together  with  those  from  the  adjacent  Yukon  terri- 


GOLD   MINING   IN   ALASKA  635 

tory  of  Canada,  hastened  to  their  country's  aid.  As  the  need 
for  men  became  more  imperative  they  were  followed  by  others. 
America's  entry  into  the  war  caused  most  of  our  young  men 
to  enlist,  but  even  then  there  remained  a  good  proportion  of 
the  older  and  more  experienced  miners,  including  some  of 
the  most  solid  members  of  the  industry.  When  the  demand 
for  men  to  carry  on  war  industries  in  the  States  became  press- 
ing another  outpouring  took  place.  On  hearing  from  "the 
outside"  of  the  ever-increasing  wages  in  the  copper  mines, 
and  the  fabulous  earnings  (so  called)  being  made  in  ship- 
building and  other  industries  in  the  Pacific  Northwest,  the 
miners,  being  accustomed  to  adapt  themselves  to  various  kinds 
of  work,  were  quick  to  take  advantage  of  the  opportunities 
open  to  them.  Thus  the  war  drew  upon  the  man-power  of 
Alaska  both  directly  and  indirectly. 

Possibilities  of  Alaskan  Mines 

The  statement  is  occasionally  made  that  the  mines  of 
Alaska  are  exhausted,  and  that  the  decreased  production  of 
gold  is  due  to  this  cause  alone.  Such  a  theory  would  postu- 
late the  simultaneous  failures  of  practically  all  mines  distrib- 
uted over  an  area  one-fifth  the  size  of  the  United  States 
proper.  If  all  the  mines  had  been  discovered  in  the  same 
year,  and  if  all  were  more  or  less  of  a  type,  it  is  conceivable 
that  they  all  might  have  failed  within  two  or  three  years  of 
one  another,  but  the  very  fact  that  Alaska  was  a  wilderness 
with  no  roads  but  its  rivers  caused  at  least  two  decades  to 
elapse  between  the  first  discovery  and  some  of  the  recent  ones. 
Some  of  the  mines  that  contributed  to  the  former  steady  out- 
put of  gold  were  quartz  lodes,  while  others  were  placer.  Cer- 
tain of  the  known  gravels  are  deep,  with  gold  on  bedrock  at 
100  feet,  while  others  are  shoveling-in  propositions  requiring 
frequent  shifting  of  the  sluice  boxes.  Sometimes  the  pay  is 
found  to  be  concentrated  in  rich  runs;  other  ground  is  uni- 
form over  large  areas  and  can  be  worked  only  by  some  large 
scale,  cheap  method,  such  as  hydraulicking  or  dredging.  To 
believe  that  under  all  these  varying  conditions  nature's  nu- 
merous stores  of  gold  are  all  coming  to  an  end  at  once  requires 
a  great  stretch  of  the  imagination. 

The  flooding  of  three  of  the  four  Treadwell  mines  in  1917 
is  also  pointed  out  as  a  prominent  factor  in  the  lessening  of 


G36  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

production.  Yet  in  place  of  the  Treadwell  are  two  other  low- 
grade  properties  in  the  Juneau  gold  belt,  the  Alaska  Gastineau 
and  the  Alaska  Juneau,  which  have  been  yielding  gold  stead- 
ily, although  not  profitably,  and  the  Chichagoff,  a  remarkable 
mine  of  high-grade  ore,  situated  near  Sitka. 

The  Rise  in  Wages 

Elimination  of  the  factors  that  have  had  only  a  minor  part 
in  diminishing  the  output  of  gold  from  Alaska  brings  us  to 
the  most  direct  cause,  namely,  high  wages  and  the  high  cost 
of  materials  and  supplies  used  in  mining.  The  increased 
wages  in  the  States  reached  during  the  war  not  only  drew 
men  away  from  the  North,  as  already  stated,  but  since  then 
have  held  them  here,  the  high  scale  having  in  general  re- 
mained in  effect  on  the  Pacific  Coast.  Why  should  men  pay 
the  high  rates  of  fare  to  distant  points  in  the  North  only  to 
receive  less  wages  there  than  they  can  obtain  here?  In  order 
to  attract  miners  to  Alaska,  rates  of  pay  higher  than  those 
prevailing  in  the  Coast  States  must  be  offered  them.  In  the 
Puget  Sound  region  today  common  labor  receives  $5  to  $6  per 
day,  the  higher  rate  being  paid  for  heavy  work  comparable  to 
mining.  Carpenters,  machinists  and  blacksmiths  are  paid  $7 
and  up.  At  the  same  time  the  Alaska  Gastineau  near  Juneau 
is  offering  millmen,  laborers  and  oilers  $3.50,  cranemen,  car- 
penters and  blacksmiths  $4  to  $5.50,  mine  laborers  $3  to  $3.75, 
and  machinemen  $4,  although  contract  miners  are  enabled  to 
earn  $5  to  $10  per  day.  This  is  the  highest  wage  scale  this 
gold  mine  can  pay  and  still  make  both  ends  meet,  regardless 
of  a  profit.  Meanwhile  the  copper  mines  to  the  westward  can 
offer  shovelers  $5.25  to  $5.75,  miners  $5.75  to  $6.25,  or,  in- 
cluding contractors,  an  average  of  $6.75,  and  millmen  $5.60 
to  $7.10. 

Let  us  look  at  the  situation  from  the  viewpoint  of  an  aver- 
age operator  in  Alaska.  Formerly  such  employers  could 
engage  men  for  the  summer's  duration  at  rates  varying  from 
$3  (with  board)  on  the  Coast  to  $5  at  the  most  distant  points 
in  the  interior.  Supplies  were  dear  enough  even  then,  but 
with  the  increasing  traffic  and  improvement  in  roads  and 
trails  as  the  territory  developed,  charges  for  transportation 
were  diminishing.  To  quote  a  former  case,  the  writer  spent 
the  season  of  1912  in  Southwestern  Alaska,  testing  placer 


GOLD   MINING   IN   ALASKA  Q37 

ground  with  a  crew  of  men  who  received  $3  and  board  for  the 
arduous  work  required.  Most  of  the  men  stayed  through  the 
six-month  season.  Today  in  the  same  region  the  wages  are 
$6  and  board  for  eight  hours  instead  of  ten,  as  formerly  in 
the  placer  camps.  Inasmuch  as  the  cost  of  boarding  men  has 
fully  doubled  and  the  wages  are  exactly  double  it  will  be  seen 
that  the  whole  item  of  labor  has  doubled. 

On  Seward  Peninsula  summer  wages  are  now  $6  to  $8  with 
board,  the  latter  being  estimated  as  costing  the  operator  $2.25 
in  Nome  and  $3  or  more  on  the  creeks.  For  work  on  the 
breakwater  at  Nome  during  the  past  summer  the  Govern- 
ment has  been  paying  $10  without  board  for  eight  hours  of 
ordinary  labor  and  $12  to  piledriver  men  and  semi-skilled  me- 
chanics. An  engineer  who  has  just  ended  a  full  year's  opera- 
tions on  the  Arctic  side  reports  the  winter  pay,  which  for- 
merly was  $3  to  $4.50  with  board,  as  now  $5  for  surface 
laborers,  $6  for  miners  and  $7  to  $10  for  carpenters  and  black- 
smiths. In  the  interior  of  Alaska  gold  mining  is  about  at  a 
standstill,  but  at  McGrath,  at  the  head  of  the  Kuskokwim 
River,  where  the  Treadwell  is  developing  a  new  high-grade 
quartz  property,  the  minimum  pay  is  $6  with  board. 

Supplies  Rose  More  Than  Wages 

Materials  and  supplies  have  increased  in  cost  even  more 
than  wages.  Ordinary  lists  showing  former  and  present 
prices  of  numerous  commodities  are  not  wholly  applicable 
when  considering  the  particular  needs  of  the  Alaska  miner, 
who  cannot  afford  to  ship  goods  of  doubtful  quality  to  his 
distant  camp.  On  this  point  there  should  be  no  confusion. 
Prices  in  the  Coast  States  for  the  good  grades  of  materials 
needed  for  the  mining  trade  in  the  North  are  far  above  those 
prevailing  before  the  war,  approximately  double,  to  speak  in 
round  numbers.  To  mention  a  few  items,  dynamite,  for  exam- 
ple, has  advanced  70  per  cent,  over  pre-war  prices ;  caps  and 
fuse,  100  per  cent;  drill  steel,  110  per  cent;  tool  steel,  125 
per  cent.  California  crude  oil  for  use  as  fuel  at  a  low  price 
was  once  a  strong  factor  in  keeping  down  costs  in  many  parts 
of  the  Territory.  Its  present  price  is  several  times  the  former 
one  and  the  supply  is  being  cut  off.  Gasoline,  which  is  indis- 
pensable for  certain  duties,  has  more  than  doubled  in  price. 


GaS  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

Quality  is  especially  necessary  in  foodstuffs,  for  it  is  use- 
less to  ship  in  articles  that  are  likely  to  spoil  or  prove  unpalat- 
able. It  is  common  knowledge  that  to  purchase  supplies  on 
the  Pacific  Coast  of  grades  corresponding  to  the  best  that 
were  formerly  available,  one  has  to  pay  a  high  price.  Some 
observers  hold  that  prices  of  commodities  were  about  to  fall 
snarply,  after  which  event  wages  will  be  lowered.  Press 
dispatches  since  the  Presidential  election,  however,  state  the 
probabilities  to  be  quite  the  contrary.  If  smoked  meats  put 
up  to  withstand  long  storage,  carefully  dried  fruits,  tea,  cof- 
fee, sugar  and  condensed  milk  reach  pre-war  prices  in  the 
immediate  future,  the  miners  at  least  will  be  pleasantly  sur- 
prised. 

Many  Small  Operators  in  Alaska 

While  the  large  operations  in  Alaska  are  carried  on  with  the 
aid  of  engineers  and  office  forces,  many  small  mines  are 
worked  by  the  individual  owners  with  small  crews.  Such 
operators  do  not  need  a  complicated  system  of  accounting  to 
show  them  whether  they  are  making  money  or  losing  it.  A 
pocket  notebook  and  a  pencil  have  often  sufficed  for  working 
out  an  estimate  of  cost  for  the  proposed  season's  work  and 
for  summing  up  the  results,  while  many  a  million  in  fat  pokes 
has  come  out  of  the  North  unchaperoned  by  even  that  much 
bookkeeping.  Yet  the  owners  knew  how  they  stood  on  the 
season's  operations  and  the  miners  had  their  pay  from  bed- 
rock. Today  the  consensus  of  opinion  is  that  gold  mining, 
except  in  rich  ground,  does  not  pay.  In  a  recent  letter  the 
Alaska  Bureau  of  Publicity  at  Juneau  states  that  in  pre-war 
days  the  average  cost  of  mine  operation  was  $6  per  man-day, 
including  wages,  materials,  supplies  and  overhead  expenses, 
while  the  average  today  is  $11. 

Ordinarily  in  the  fall  our  Alaskan  friends  call  at  the  Mines 
Building,  Seattle,  to  compare  notes  on  the  past  season  and 
to  discuss  plans  for  the  coming  year.  Some  of  them  attend 
the  winter  session  given  for  mining  men  at  the  College  of 
Mines,  and  make  use  of  the  laboratories  for  experimenting 
on  their  ores.  Many  such  men  are  letting  their  gold  claims  lie 
while  they  turn  their  attention  to  other  metals.  The  high 
cost  of  operation  has  not  only  lessened  the  actual  mining,  but 
has  also  discouraged  prospecting  for  new  ground  and  the 


GOLD   MINING   IN   ALASKA  639 

development  of  finds  already  made.  A  grubstake  nowadays 
represents  a  small  fortune  in  money.  A  man  is  not  justified 
in  giving  up  his  time  for  a  season  of  prospecting  when  he 
knows  in  advance  that  he  could  not  work  on  ordinary  strike 
if  he  made  it.  The  absence  of  large  numbers  of  gold  miners 
from  Alaska  has  reacted  against  those  who  remain  and 
against  the  country  in  general.  Steamer  and  river-boat  serv- 
ice is  less  frequent  than  in  the  active  days,  some  of  the  im- 
portant road-stations  are  closed  and  the  merchants  maintain 
smaller  stocks  of  goods.  These  conditions,  in  turn,  increase 
the  difficulties  and  costs  of  mining. 


WHAT  FAILURE  MEANS  TO  SOUTH  DAKOTA 

By  B.  C.  YATES,  Superintendent,  Homestake  Mining  Co.,  Lead,  S.  D. 

Perhaps  the  best  way  to  show  what  failure  to  obtain  an 
increased  price  for  newly  produced  gold  means  to  South 
Dakota  is  to  present  the  true  condition  of  the  gold  industry 
of  the  State,  with  the  more  apparent  causes  which  have 
brought  about  this  condition.  Briefly  stated,  the  gold  industry 
of  the  Black  Hills  of  South  Dakota  is  in  a  state  of  disintegra- 
tion, not  because  the  mines  are  becoming  exhausted,  but 
because  the  gold  taken  from  the  mines  does  not  have  sufficient 
value  to  pay  the  cost  of  production. 

The  Gold  Region  of  South  Dakota 

The  Black  Hills  do  not  comprise  a  very  large  area — about 
100  miles  square — and  the  gold  producing  section  is  only  a 
small  part  of  the  whole.  In  this  limited  area,  four  years  ago, 
there  were  from  10  to  12  regular  producers  of  the  precious 
metal,  and  there  were  other  mines  being  developed,  some  of 
which  were  producing  a  considerable  amount.  Only  two,  the 
Trojan  and  the  Homestake,  have  survived  the  war  period. 
These  properties  have  been  operated  during  this  period  to 
keep  the  mines  and  treatment  plants  in  working  condition 
and  their  organization  intact,  with  the  hope  that  in  the  near 
future,  conditions  will  be  such  that  some  profit  may  be  had 
from  their  operations.  Prospecting  is  at  a  standstill  and  only 


640  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

two  or  three  mines  in  the  development  stage  show  any  signs 
of  activity. 

Population  Decrease 

The  population  of  the  two  largest  mining  towns  of  the  Hills, 
Lead  and  Deadwood,  has  decreased  from  12,045  in  1910,  to 
7416  in  1920,  and  the  population  of  Lawrence  county,  which 
is  the  principal  mining  section  of  the  Hills,  has  6665  less 
people  now  than  ten  years  ago.  Practically  all  of  this  decrease 
has  occurred  during  the  past  three  years.  In  every  mining 
community  of  the  Hills  are  to  be  found  idle  mills,  empty 
houses  and  deserted  prospectors'  cabins. 

Gold  Statistics 

The  joint  reports  of  the  U.  S.  Geological  Survey  and  the 
Bureau  of  the  Mint  give  the  average  yearly  production  of  gold 
in  the  Black  Hills,  from  1912  to  1917  inclusive,  as  having  a 
value  of  $7,436,000;  in  1918,  $6,699,400;  in  1919,  $5,289,700; 
and  from  the  report  of  the  State  Mine  Inspector  for  the  first 
six  months  of  1920,  it  is  estimated  that  the  total  for  this  year 
will  not  be  much  over  $4,000,000.  This  is  a  reduction  of 
approximately  45  per  cent,  in  three  years. 

Men  Employed 

The  annual  reports  of  the  State  Mine  Inspector  give  the 
average  number  of  men  employed  in  the  gold  mines  of  the 
district  from  1912  to  1917  inclusive,  as  3063;  for  1918  and 
1919,  as  1933;  and  for  the  first  six  months  of  1920  as  1681, 
with  very  little  if  any  increase  to  date. 

These  figures  do  not  indicate  a  very  healthy  condition  of  the 
gold-mining  industry  in  this  district.  They  do  tell  us,  in  lan- 
guage which  cannot  be  misunderstood,  that  something  must 
be  done  to  improve  the  situation. 

Increase  in  Price  of  Supplies 

The  prices  of  supplies  and  labor  that  have  prevailed  dur- 
ing the  past  few  years  and  which  still  prevail,  make  the  cost 
of  production  almost  prohibitive  at  the  fixed  price  for  which 
the  gold  miner  is  forced  to  sell  his  product.  Wages  have 
increased  from  40  to  50  per  cent.,  cyanide  52  per  cent.,  dyna- 
mite 92  per  cent.,  drill  steel  138  per  cent.,  and  all  other  sup- 


GOLD  MINING  IN  SOUTH  DAKOTA  641 

plies  used  in  mining  operations  show  similar  increases.  No 
figures  are  available  which  will  accurately  give  the  increased 
cost  of  producing  an  ounce  of  gold  in  the  Black  Hill  mines. 
The  producing  mines  of  the  Hills  are  fortunate  enough  to  have 
had  a  large  amount  of  ore  broken  down  and  remaining  in  the 
stopes,  as  well  as  ore  that  could  be  mined  at  a  low  cost,  which 
has  thus  far  tided  them  over  the  high  price  period.  It  is  need- 
less to  say  that  these  favorable  conditions  will  not  last.  Cal- 
culations based  on  normal  operations  show  an  increase  of 
approximately  30  per  cent,  in  the  cost  of  producing  an  ounce 
of  gold,  and  these  calculations  do  not  take  into  account  interest 
on  investment  or  depreciation  of  mine  and  plant  due  to 
deferred  development  and  repairs.  It  is  difficult  to  estimate 
how  much  should  be  added  to  operating  costs  to  cover  these 
last  two  items,  but  they  will  certainly  be  reflected  in  future 
balance  sheets.  Should  cost  of  labor  and  supplies  be  reduced 
to  pre-war  normal  in  the  near  future,  we  will  still  have  to  pay 
more  for  our  gold  because  of  the  depreciated  physical  condi- 
tion of  our  mines,  and  this  is  true  whether  they  have  been 
kept  running  or  were  closed  down. 

This  will  probably  be  considered  an  extremely  pessimistic 
report ;  doubtless  it  is.  The  gold  industry  is  face  to  face  with 
a  grave  crisis — a  crisis  brought  about  by  a  world  war  and  the 
short-sighted  policy  adopted  by  the  Government,  of  bleeding 
without  feeding  the  one  industry  absolutely  essential  to  the 
life  of  any  civilized  nation  at  all  times,  and  doubly  so  when 
the  nation  is  at  war  and  is  using  a  large  part  of  the  products 
of  its  mines  and  factories.  If  these  products  are  paid  for  with 
a  medium  that  depreciates  in  purchasing  value  to  such  an 
extent  that  the  price  paid  is  less  than  the  cost  of  production, 
the  nation's  industries  become  bankrupt,  and  a  bankrupt 
nation  follows.  The  Government  must  pay  for  what  it  uses 
for  the  common  welfare — Russian  sovietism  to  the  contrary 
notwithstanding — and  until  a  substitute  is  found  the  payment 
should  be  made  with  gold. 

The  Case  of  the  Homestake  Mine 

When  our  Government  decided  to  take  an  active  part  in  the 
great  European  conflict,  the  producers  of  metal,  gold  included, 
were  urged  to  speed  up  production.  Gold  producers,  trying  to 
respond  to  this  patriotic  call,  found  themselves  confronted 


642  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

with  indifferent  governmental  executives,  loss  of  labor,  high 
prices  of  supplies,  an  ever-increasing  difficulty  in  getting  sup- 
plies at  any  price  and  a  fixed  price  for  their  product  based  on 
pre-war  conditions.  For  the  gold  mines  to  keep  up  production 
during  this  period  of  rising  cost,  it  was  necessary  to  reduce 
expenses,  and  this  could  be  done  only  by  cutting  off  develop- 
ment and  prospecting  and  plant  repair,  as  the  price  of  labor 
and  supplies  was  continually  rising.  Increased  costs  for  the 
future  is  only  a  natural  consequence.  As  a  concrete  example, 
the  Homestake  mine,  under  normal  conditions,  excavates 
yearly  17,500  feet  of  tunnels  for  the  purpose  of  developing 
known  ore  bodies  and  prospecting  virgin  ground.  During 
1918  and  1919  this  was  reduced  to  8600  feet.  From  this  it 
may  be  readily  seen  that  this  company  will  have  to  spend  many 
thousands  of  dollars,  in  the  very  near  future,  to  bring  the 
mine  up  to  its  normal  working  condition.  What  is  true  at  the 
Homestake  is  undoubtedly  true  at  other  producing  'gold  mines 
and  the  situation  is  far  worse  in  those  mines  that  were  forced 
to  close  down. 

So  it  may  be  known  that  the  gold-mining  community  of 
South  Dakota  measured  up  to  its  full  duty  during  the  war, 
permit  me  to  digress  somewhat  from  the  subject:  Lawrence 
county,  the  home  of  the  Trojan,  the  Golden  Reward,  the 
Homestake  and  other  gold-producing  mines,  contributed  1100 
fighting  men,  purchased  $2,571,700  of  bonds,  $227,455  of 
War  Savings  Stamps,  gave  $75,000  to  the  Red  Cross  and 
$11,000  to  the  Y.  M.  C.  A.  and  other  war  work.  These  figures 
are  not  given  in  a  spirit  of  boastfulness,  but  to  show  those  of 
you  who  are  not  closely  associated  with  the  gold-mining  indus- 
try that  we  are  loyal  citizens  and  are  worthy  to  receive — not 
charity — but  just  compensation  for  our  labors. 

Thus  briefly  I  have  attempted  to  show  you  what  it  means  to 
the  gold  industry  of  the  State  of  South  Dakota  to  fail  to  get 
an  increased  price  for  our  gold  by  giving  an  outline  of 
present  conditions.  Let  me  repeat,  that  we  are  facing  a  very 
grave  crisis  and  something  must  be  done  if  we,  as  a  nation, 
wish  to  get  back  to  normal  gold  production  or  even  maintain 
present  production. 


GOLD   MINING    CONDITIONS    IN   ARIZONA  643 

GOLD-MINING  CONDITIONS  IN  ARIZONA 

By  W.B.PHELPS,  Superintendent,  Tom  Reed  Gold  Mines  Co.,  Oatman,Ariz. 

As  you  are  no  doubt  aware,  gold  mining  in  Arizona  in  the 
proper  sense  of  the  word  is  almost  entirely  confined  to  the 
Oatman  district.  The  balance  of  the  gold  produced  in  the 
State  is  gained  as  a  by-product  from  the  copper  mines,  and 
gold  mining  in  our  State,  as  elsewhere  throughout  the  West, 
is  languishing  under  the  heavy  burden  of  conditions  over 
which  we  have  no  control,  and  which  have  grown  worse 
instead  of  better,  year  after  year.  The  producing  mines  are 
becoming  depleted  and  there  is  no  incentive  or  encouragement 
to  find  new  gold  mines.  The  prospector  has  forsaken  the  hills ; 
the  discovery  of  ore  that  could  be  mined  at  a  fair  profit  a  few 
years  ago  does  not  interest  him  today;  neither  can  capital  be 
interested  to  pursue  the  development  of  ore  bodies  where  there 
is  no  hope  of  any  return  on  the  investment.  Then  where  are 
our  new  gold  mines  to  come  from?  Unless  some  measures  of 
relief  are  afforded  the  gold  mining  industry,  it  is  my  belief 
that  it  will  be  only  a  question  of  time  until  gold  mining,  the 
great  industry  that  has  made  famous  our  Western  States  and 
Alaska,  will  be  a  thing  of  the  past. 

Gold,  heretofore  recognized  as  the  yard-stick  by  which  all 
other  commodities  were  measured,  the  zero  on  the  thermome- 
ter of  values,  recognized  as  such,  is  not  used  for  monetary 
purposes  and  has  not  been  for  five  years.  Gold  today  is  a 
commodity  just  the  same  as  wheat  or  cotton.  Over  $20,000,000 
in  gold  has  been  used  for  industrial  purposes  in  1919  in 
excess  of  what  all  the  mines  in  the  United  States  produced. 

Those  who  use  gold  for  industrial  purposes  object  to  paying 
even  the  cost  of  production.  They  buy  their  gold  today  the 
same  as  they  did  five  years  ago,  for  $20.67  an  ounce.  Five 
years  ago,  before  the  dollar  had  lost  its  purchase  power,  the 
gold  ounce  could  be  produced  at  a  profit  and  maintain  the 
normal  gold  production  of  the  country,  but  at  this  time  the 
purchase  power  of  the  dollar,  or  the  purchase  power  of  the 
gold  ounce,  is  less  than  half  what  it  was  then,  and  this 
accounts  for  the  serious  decline  in  the  gold  production  of  the 
nation.  It  will  be  necessary  to  restore  the  purchase  power  of 


644  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

the  gold  ounce  to  the  pre-war  standard  in  order  to  rehabili- 
tate the  gold-mining  industry  and  to  maintain  the  normal 
gold  production  of  1915. 

Profit  and  Loss — Operation  or  Suspension 

Gentlemen,  I  have  heard  it  stated  time  and  time  again  that 
when  any  business  does  not  pay  to  operate,  that  business 
should  suspend  operation  until  it  does  pay.  That  conclusion 
for  ordinary  business  is  correct,  but  gold  mining  is  not  an 
ordinary  business.  In  fact,  it  is  unlike  any  other  business. 
For  instance,  take  the  Tom  Reed  Company  with  which  I  am 
connected.  We  have  been  in  operation  for  over  12  years  and 
have  an  investment  of  over  $3,000,000.  It  will  not  cost  as 
much  to  close  down,  but  what  will  it  cost  to  stay  closed  down, 
and  what  will  it  cost  to  reopen?  A  shutdown  for  any  length 
of  time  would  spell  destruction  and  ruin  to  that  mine  and  its 
investment.  It  is  not  so  much  the  visible  loss  as  it  is  the 
invisible  loss ;  our  mill  and  surface  equipment  can  be  repaired 
or  replaced,  but  there  are  miles  and  miles  of  underground 
work  which  would  be  flooded,  caved  in  and  destroyed.  Work 
that  was  done  and  carefully  guarded  and  watched  at  enormous 
expense  would  be  in  ruins.  Would  that  mine  ever  be  reopened, 
and  would  its  possible  ore  output  warrant  the  tremendous 
cost  even  if  it  was?  It  would  be  years  before  it  could  be 
brought  back  to  its  present  condition,  and  the  chances  are 
that  no  body  of  sensible  men  would  want  to  spend  the  time 
and  money  rehabilitating  an  old  mining  property  with  so 
many  more  attractive  opportunities  for  investment  offered  in 
other  lines  of  endeavor. 

The  Oatman  District 

Getting  back  to  general  conditions  in  gold  mining,  the  case 
of  the  Oatman  district,  which  I  represent  is  typical.  *  Powder 
that  we  paid  $13.25  for  now  costs  us  $24 ;  fuse  which  we  bought 
for  $38.40  costs  today  $81 ;  caps  that  we  used  to  get  for  $11.50 
now  are  $21;  steel  rails  that  were  $65  now  cost  us  $115; 
timber  we  paid  $24  for  now  is  $71;  oil  and  coal  have  more 
than  doubled.  Boarding-house  supplies  are  about  90  per  cent, 
higher,  and  the  cost  of  labor  has  increased  $2  per  shift  for 
each  man.  Yet  the  gold-mining  industry  alone  has  been  called 


GOLD  MINING  IN  ARIZONA  645 

upon  to  bear  this  increased^ cost  of  production  without  any 
increase  in  the  price  of  the  metal  that  we  produce. 

It  has  been  stated  recently  that  we  are  now  in  a  down- 
ward market  and  that  prices  are  dropping  in  favor  of  gold 
mining.  That  may  be  the  case  in  other  parts  of  the  country, 
but  I  can  assure  you  that  we  have  not  been  confronted  with 
any  such  serious  predicament  in  Oatman ;  if  some  small  items 
have  been  reduced  in  price,  that  reduction  means  nothing  in 
comparison  with  the  increase  in  electric  power  and  freight 
rates  which  only  recently  went  into  effect. 


GOLD-MINING  CONDITIONS  IN  OREGON 

By  HENRY  M.  PARKS 
Director,  Oregon  Bureau  of  Mines  and  Geology,  Portland,  Ore. 

Oregon's  gold-mining  industry  has  for  a  number  of  years 
been  quite  a  healthy  child.  True,  she  has  never  grown  up  so 
large  as  her  California  or  Colorado  sisters,  but  until  recent 
years  she  has  enjoyed  fairly  good  health.  She  is  now  dan- 
gerously ill.  The  first  signs  of  indisposition  appeared  in  1916 
and  1917.  In  1918  she  grew  rapidly  worse,  and  during  that 
year  her  vitality  speedily  waned.  Early  in  1919  it  became 
evident  that  she  was  in  for  a  long  sick  spell.  During  1920  the 
patient  has  been  growing  so  much  weaker  that  at  times  it  has 
been  difficult  to  determine  whether  there  is  any  pulse  left. 

I  have  come  to  Denver  for  a  consultation  with  you  to  see  if 
something  may  not  yet  be  done  to  save  her  life.  Possibly 
oxygen — or  maybe  an  operation — but  one  thing  is  certain: 
something  must  be  done,  and  that  quickly. 

What  Oregon  Has  Produced 

For  a  few  years  prior  to  1916  Oregon  produced  annually 
about  $2,000,000  in  gold.  This  annual  production  has  continu- 
ally decreased  since  1916  and  with  increasing  rapidity.  The 
greatest  decrease  has  taken  place  during  the  year  1920.  This 
is  due  to  the  fact  that  some  of  our  most  important  quartz 
properties  which  have  been  holding  on  for  the  past  year  or 
two,  hoping  against  hope,  have  at  last  exceeded  the  elastic 
limit  of  their  holding-on  power.  Three  of  these  important 


646  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

producers  have  recently  closed  down  and  pulled  the  pumps 
As  a  result  Oregon's  1921  gold  production  will  probably  be  no1 
more  than  one-fourth  of  the  output  in  1916. 

The  conditions  that  have  brought  this  blight  upon  th( 
gold-mining  industry  of  Oregon  and  of  the  United  States,  an 
due  naturally  to  the  unavoidable  expedient  of  enormous  infla 
tion  or  expansion  of  the  currency  of  the  country.  Necessarily 
it  required  more  and  more  of  this  diluted  currency  to  satisfy 
All  the  real  money  of  the  country  (gold)  vanished  from  circu 
lation  almost  over  night.  The  only  gold  in  sight  during  th< 
past  four  years  has  been  that  produced  with  great  travail  b> 
the  gold  miner,  and  he  had  no  alternative  but  to  take  dilutee 
currency  in  exchange  for  his  gold.  Is  there  any  wonder  tha 
the  gold  production  of  the  country  is  rapidly  diminishing? 

The  surprising  thing  to  my  mind  is,  not  that  these  condi 
tions  with  their  natural  results  obtain,  but  that  so  littL 
national  concern  is  in  evidence  because  of  the  existence  o 
such  unfortunate  conditions. 

I  am  surprised  that  $50,000,000  can  be  lopped  off  our  coun 
try's  annual  gold  production,  which  thus  deprives  the  natioi 
of  a  substantial  addition  to  or  broadening  of  the  very  founda 
tion  of  the  currency  and  credit  of  the  country,  without  com 
manding  more  interest  and  concern  on  the  part  of  our  states 
men  and  financiers. 

A  very  logical  plan  is  proposed  in  the  McFadden  Bill  whicl 
is  intended  only  as  a  temporary  relief  measure  to  tide  us  ove 
this  crisis  and  to  save,  if  possible,  the  life  of  a  fundamenta 
industry.  It  seems  incredible  that  there  should  be  any  oppo 
sition  to  the  reasonable  plan  of  throwing  out  a  life  line  to  th 
gold-mining  industry. 

Manufacturers  Object  to  Gold  Premium 

The  opposition  to  the  measure  that  has  arisen  in  certain  o 
the  industrial  arts  and  trades -seems  short-sighted.  By  sue! 
opposition  there  is  grave  danger  of  "killing  the  goose  that  lay 
the  golden  egg."  I  wonder  what  would  happen  if  the  Govern 
ment  should  decide  not  to  sell  more  gold  from  the  Mint.  On 
result  would  be  that  the  industrial  arts  would  certainly  hav 
to  go  into  the  open  market  for  gold.  I  dare  say  that  befor 
many  months  gold,  as  a  commodity,  would  be  selling  at 


GOLD  MINING  IN  OREGON  647 

price  that  would  act  as  a  lively  stimulant  to  production. 
Indeed,  this  very  condition  may  be  brought  about  much  sooner 
than  anyone  of  us  expects.  Both  the  rapidly  increasing  gold 
production  on  the  one  hand,  and  the  growing  exportation  of 
the  metal  because  of  the  balance  of  trade  with  foreign  coun- 
tries which  is  now  going  against  us  on  the  other,  are  operat- 
ing in  this  very  direction. 

I  would  like  to  take  this  opportunity  to  read  some  resolu- 
tions recently  adopted  by  the  State  Bureau  of  Mines  of  Oregon : 

The  Commission  of  the  Oregon  Bureau  of  Mines  and 
Geology,  at  its  regular  meeting  in  Portland  on  October  22, 
1920,  discussed  at  considerable  length  H.  R.  13201,  usually 
referred  to  as  the  McFadden  Bill.  The  measure  was  intro- 
duced in  the  House  of  Representatives  on  March  22,  1920,  by 
Congressman  Louis  T.  McFadden,  chairman  of  the  Committee 
on  Banking  and  Currency,  and  is  designed  to  stimulate  the 
production  of  gold  in  the  United  States  for  use  directly  as 
money,  or  indirectly  as  a  base  for  the  issuance  of  currency. 
The  McFadden  Bill  provides  that  an  excise  tax  of  $10  per 
ounce  be  placed  upon  manufactured  gold  in  order  that  the  gold 
producer  may  receive,  from  a  fund  derived  from  the  excise 
tax,  a  premium  of  $10  an  ounce  for  newly  produced  gold.  The 
interesting  fact  was  brought  out  in  a  prolonged  discussion  of 
its  provisions  that,  for  example,  during  the  year  1919  gold  was 
purchased  from  the  United  States  Mint  for  uses  other  than 
coinage  to  a  value  of  over  $20,000,000  in  excess  of  the  entire 
gold  production  of  the  country  for  that  year. 

Oregon  Endorses  the  McFadden  Bill 

The  conclusion  of  the  Commission,  by  unanimous  vote,  was 
as  follows: 

(1)  That  the  bill  is  carefully  drawn  and  can  be  successfully 
administered  without  difficulty. 

(2)  That  if  enacted  it  will  greatly  stimulate  the  production 
of  new  gold,  the  annual  output  of  which  is  now  less  than  one- 
half  that  of  1915. 

(3)  That  the  excise  tax  on  manufactured  gold  will  produce 
revenue  sufficient  to  meet  the  requirements  of  the  act. 


648  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

(4)  That  the  benefit  accruing  to  the  gold  producers  is  justly 
due  them  and  is  in  no  sense  a  bonus. 

(5)  That  the  act,  when  in  operation,  will  not  in  the  slightest 
degree  alter  or  affect  the  monetary  system,  except  that  the 
increased  production  of  gold  will,  by  adding  to  the  supply  of 
gold  currency,  permit  a  reduction  of  paper  currency  already 
issued  in  excessive  amounts,  thus  tending  away  from  unsound 
money  in  the  direction  of  sound  money. 

(6)  That  after  a  careful  study  of  the  bill  and  the  need 
therefor,  the  Commission  unqualifiedly  endorses  the  same  and 
is  confident  that  no  one,  after  seriously  reading  the  provisions 
of  the  measure,  will  do  otherwise  than  endorse  it;  and  that 
such  opposition  as  has  arisen  is  due  to  failure  to  read  and 
study  the  bill,  and  not  the  result  of  mature  judgment  as  to  the 
effects  of  the  proposed  act. 

(7)  That  other  agencies  interested  in  sound  currency  and 
the  maintenance  of  the  gold  production  be  advised  of  our  action 
and  urged  to  work  to  the  end  that  the  bill  may  become  a  law. 


DEPLETION  AND  INVESTED  CAPITAL  649 

x^ 

TAXATION  CONFERENCE 

DEPLETION  OF  MINES  IN  RELATION  TO  INVESTED  CAPITAL 

By  WM.  B.  GOWER, 
Member  American  Institute  of  Accountants,  New  York 

In  the  system  of  Federal  taxation  adopted  in  1917,  and  con- 
tinued since  for  the  purpose  of  raising  the  immense  sums 
required  by  the  war  emergency,  the  concept  of  invested  capital 
plays  a  most  important  part.  The  definition  of  invested  capital, 
in  both  the  Revenue  Acts  of  1917  and  1918,  has  come  in  for 
much  criticism  because  it  rejected  present  day  valuation,  and 
substituted  for  such  real  values  an  artificial  concept.  Not  only 
that,  but  this  artificial  concept  of  invested  capital  is  rendered 
more  difficult  by  reason  of  its  expression  through  the  medium 
of  accounting  ideas  and  terminology.  Accounting  is  not  an 
exact  and  settled  science,  and  accounting  principles  and  prac- 
tice involve  many  uncertainties,  many  disputed  questions,  and 
many  divergent  usages,  customs  and  methods.  The  mining 
industry  has  had  its  share,  and  perhaps  more  than  its  share, 
of  these  disputed  questions  relating  to  invested  capital.  None 
of  these  questions,  however,  has  been  more  disputed  than  the 
proper  adjustment  of  the  original  basic  invested  capital  of  a 
corporation  engaged  in  mining,  which  is  required  by  reason  of 
removal  of  minerals  from  the  property  from  the  commence- 
ment of  operations  down  to  the  taxable  year.  The  question, 
concisely  expressed,  is  as  to  the  effect  of  depletion  upon  in- 
vested capital. 

New  Basic  Rule  Opposed 

For  the  purpose  of  this  adjustment  of  the  invested  capital  of 
a  mining  corporation,  the  Bureau  of  Internal  Revenue  has 
adopted  a  basic  principle  and  rule,  which  has  encountered 
unanimous  dissent  and  opposition  from  the  mining  corpora- 
tions to  which  it  has  been  applied.  The  occasion  is  opportune, 
therefore,  to  examine  this  rule,  to  show  its  workings,  and  to 
expose  its  fundamental  error.  Inasmuch  as  the  rule  rests  ori- 


G50  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

marily  upon  accounting  methods,  the  burden  of  refuting  the 
rule  depends  mainly  upon  accounting  considerations.  The 
present  discussion  is  confined  largely  to  these  considerations, 
leaving  the  strictly  legal  and  statutory  objections  to  the  rule 
for  later  discussion  by  others. 

The  broad  principle  underlying  the  rule  adopted  by  the 
Bureau  is  that  every  unit  of  mineral  removed  from  a  mining 
property,  from  the  commencement  of  operations  down  to  the 
taxable  year,  impairs  the  original  cost-value'  or  original 
invested  capital  value  of  the  mine,  at  a  constant  rate  per  unit, 
necessarily,  invariably,  and  regardless  of  actual  conditions, 
facts  and  valuation  of  the  mining  property.  The  Bureau 
declares  that  its  rule  rests  upon  accounting  principles  estab- 
lished for  the  computation  of  the  surplus  and  undivided  profits 
of  mining  corporations.  The  formal  declaration  is  as  follows : 

Art.  839  Surplus  and  Undivided  Profits:  Allowance 
for  Depletion  and  Depreciation. — Depletion,  like  deprecia- 
tion, must  be  recognized  in  all  cases  in  which  it  occurs. 
Depletion  attaches  to  each  unit  of  mineral  or  other  prop- 
erty removed,  and  the  denial  of  a  deduction  in  computing 
net  income  under  the  Act  of  August  5,  1909,  or  the  limita- 
tion upon  the  amount  of  the  deduction  allowed  under  the 
Act  of  October  3,  1913,  does  not  relieve  the  corporation  of 
its  obligation  to  make  proper  provision  for  depletion  of 
its  property  in  computing  its  surplus  and  undivided  profits. 

A  Specific  Instance 

In  order  that  we  may  visualize  and  understand  this  rule 
clearly,  it  is  well  to  illustrate  by  an  actual  case  and  definite 
figures.  The  company  referred  to  owns  and  operates  a  large 
copper  mining  property  in  Arizona.  It  was  incorporated  20 
years  ago  with  a  capital  of  $3,000,000,  although  at  the  time  of 
incorporation  the  mine  was  worth  many  times  this  nominal 
capitalization.  Under  the  Treasury  regulations  administering 
the  excess-profits  tax  law  of  1917,  the  company  was  allowed  to 
establish  the  value  of  the  orebodies  definitely  known  to  exist  at 
the  time  of  incorporation  in  the  year  1900,  in  order  that  the 
excess  of  this  value  over  the  aggregate  par  of  the  shares  issued 
for  the  property  might  be  included  in  invested  capital  as  paid- 
in  surplus.  It  was  established  that  the  commercial  value  of  the 
orebodies  definitely  known  to  exist  at  that  time  was  at  least 


DEPLETION  AND  INVESTED  CAPITAL  651 

$26,500,000,  and  this  sum  was  allowed  as  the  basic  invested 
capital  of  the  company. 

During  the  period  from  January,  1900,  to  March  1,  1913, 
this  company  mined  about  400,000,000  pounds  of  copper,  and 
simultaneously  developed  a  much  greater  quantity  by  exten- 
sions of  its  orebodies.  The  value  of  the  mining  property  at 
March  1,  1913,  was  fixed  by  the  Valuation  Unit  of  the  Bureau, 
for  purposes  of  depletion,  at  $41,500,000.  Between  March  1, 
1913,  and  the  beginning  of  the  taxable  year  1917,  the  company 
mined  about  200,000,000  pounds  of  copper,  equivalent  to  one- 
fifth  of  the  quantity  estimated  to  be  in  the  property  on  March 
1,  1913. 

At  the  beginning  of  the  taxable  year  1917  the  company  had 
an  accumulation  of  surplus  earnings,  in  excess  of  $16,000,000, 
derived  mainly  from  the  operation  of  its  mining  property. 

Application  of  the  Rule 

Under  the  rule  adopted  by  the  Bureau,  it  is  claimed  that  this 
company's  invested  capital  for  the  taxable  year  1917  should 
be  reduced  by  over  $11,000,000  for  alleged  impairment  of  the 
original  paid-in  capital  of  $26,500,000.  This  deduction  of 
$11,000,000  from  the  invested  capital  was  reached  by  multi- 
plying the  number  of  pounds  of  copper  mined  during  the  17 
years  between  January,  1900,  and  December,  1916  (600,000,- 
000  pounds)  by  a  constant  unit  rate  of  1.8457  cents  per  pound. 
This  unit  rate  was  obtained  by  dividing  the  original  capital 
value  of  the  mine  ($26,500,000)  by  the  number  of  pounds  of 
copper  estimated  to  have  been  in  the  mining  property  in  1900, 
based  upon  the  figures  available  as  of  March  1,  1913. 

We  see,  then,  by  the  actual  case  above  cited,  that  the  admin- 
istrative rule  adopted  by  the  Bureau  is  based  upon  the  principle 
that,  although  the  commercial  value  of  the  mining  property 
increased  during  the  17-year  period  by  nearly  50  per  cent.,  it 
is  necessary  to  deduct  $11,000,000  from  the  invested  capital  in 
order  to  recognize  impairment  of  the  original  invested  capital 
value  of  the  mining  property,  which  is  regarded  as  having 
occurred  during  this  identical  period.  By  this  rule,  $11,000,- 
000  of  actual  profits  are  deducted  in  order  to  recognize  an 
impairment  of  original  commercial  value  which  is  wholly 
imaginary. 


652  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

We  have  seen,  by  the  citation  heretofore  made  from  the  Reg- 
ulations, that  the  Bureau  justifies  its  rule  by  declaring  that  it 
represents  a  fundamental  accounting  principle  in  the  computa- 
tion of  surplus  and  undivided  profits  of  mining  corporations. 
The  Bureau  contends  that  its  rule  embodies  a  permanent  and 
established  profit  accounting  rule  for  mines.  It  must  be  re- 
membered that  invested  capital  consists,  broadly  speaking,  of 
two  main  elements :  first,  the  original  paid-in  capital ;  second, 
the  accumulated  surplus  earnings.  It  was  open  to  the  Bureau, 
in  making  its  rule  for  the  recognition  of  the  effect  of  depletion 
upon  invested  capital  of  mining  corporations,  to  attack  the 
first  element — the  paid-in  capital.  The  Bureau  decided,  how- 
ever, against  this  course,  and  concentrated  its  attention  upon 
the  second  element  of  invested  capital — the  surplus  earnings. 
It  is  most  important  to  keep  in  mind  that  the  Bureau's  rule  is 
an  attack  on  the  status  of  the  surplus  earnings,  and  its  justifi- 
cation is  proclaimed  as  resting  upon  an  established  profit  ac- 
counting rule  for  mines.  It  makes  no  difference  that  the  sur- 
plus earnings  may  have  been  distributed  as  dividends :  for  the 
attack  is  then  merely  diverted  to  the  paid-in  capital,  on  the 
ground  that  the  amounts  so  distributed  were  not  wholly  "prof- 
its," but  included  a  part  liquidation  of  such  capital. 

Past  Accounting  Systems  Considered  Incorrect 

It  becomes  important,  therefore,  to  arrive  at  a  correct  under- 
standing of,  and  to  re-affirm  certain  established  accounting 
rules  which  are  fundamental  in  determining  the  true  profits  of 
mining.  (We  are  not  now  referring  to  the  ascertainment  of 
present-day  taxable  income  from  mines,  but  to  true  profits, 
which  is  an  entirely  different  affair.)  The  Bureau  has  decided 
that  profits  of  mining  computed  during  a  generation  past  pur- 
suant to  our  accepted  accounting  rules  were  incorrectly  com- 
puted; that  the  custom  was  unsound,  and  the  teaching  of  the 
accountancy  manuals  on  the  subject  of  mining  profits  at  fault. 
It  has  decided  that  the  profits  from  mining  during  these  bygone 
years  must  be  re-computed  under  a  new  set  of  accounting  rules 
which  the  mining  industry  never  thought  of  adopting  in  those 
days,  which  it  has  not  adopted  today,  and  which  may  never  be 
accepted.  The  Bureau  has  decided  that  the  undistributed  min- 


DEPLETION  AND  INVESTED  CAPITAL  653 

ing  profits,  whether  accumulated  recently  or  accumulated  over 
a  long  term  of  years,  must  be  adjusted  to  conform  to  new  ideas. 
The  practical  effect  of  all  this  procedure  is  to  attack  the 
status  of  the  surplus  earnings  of  mining  corporations  shown 
by  their  books  and  accounts,  an  authorized  element  of  invested 
capital  in  the  profits  tax  laws  of  1917  and  1918.  By  means  of 
this  procedure,  mining  corporations  have  been  deprived  of 
scores  of  milh'ons  of  dollars  of  invested  capital,  and  their  profits 
taxes  increased  correspondingly. 

Relation  of  Profits  to  Original  Value 

The  hypothesis  upon  which  the  Bureau  has  proceeded  is,  that 
no  reckoning  of  the  true  profits  of  mining,  past,  present  and 
future,  is  valid  unless  a  portion  of  each  year's  revenues  is 
assigned  toward  the  wiping  out  of  the  original  cost  or  the  orig- 
inal capital  value  of  the  mining  property.  The  underlying 
principle  is  declared  to  be  that  depletion  of  the  original  cost  or 
original  capital-value  attaches  to  each  unit  of  mineral  removed, 
at  a  constant  rate  per  unit.  The  method  relied  upon  is  to  pro- 
vide annually  such  proportion  of  the  original  cost  or  original 
capital-value  of  the  mine  as  the  year's  output  of  minerals  bears 
to  the  total  estimated  original  mineral  contents  of  the  mine. 
This  formula  is  considered  to  apply  to  all  mineral  deposits, 
regardless  of  the  actual  condition  and  value  of  the  mine  at  the 
end  of  the  accounting  period.  The  formula  is  considered  to 
apply  to  all  mineral  deposits,  without  regard  to  any  restoration 
of  the  ore  reserves  comprehended  in  the  original  cost  or  orig- 
inal capital-value,  which  may  have  resulted  from  exploration 
and  development  work  carried  on  contemporaneously  with  ex- 
traction and  removal  of  minerals.  The  formula  is  considered 
to  apply  to  all  mineral  deposits  even  though,  as  is  usually  the 
case,  it  is  impossible  to  estimate  the  original  mineral  contents 
of  the  mine  with  any  degree  of  accuracy,  until  most  of  the  con- 
tents have  been  removed. 

It  is  possible  that  for  a  certain  small  class  of  mining  prop- 
erties this  hypothesis  adopted  by  the  Bureau  embodies  a  logical 
method  for  determining  the  true  profits  from  mining,  whether 
past,  present  or  future.  The  small  class  of  mines  referred  to 
contains  deposits  in  which  the  character  and  extent  of  the  valu- 
able content  is  known  and  determinable  at  the  time  of  acquire- 


654  PROCEEDINGS  OF  AMERICAN  MINING   CONGRESS 

ment,  and  forms  the  basis  of  the  purchase.  But,  for  the  great 
bulk  of  mining  properties,  in  which  the  character  and  extent 
of  the  valuable  content  cannot  be  determined  with  any  degree 
of  certainty  until  many  years  have  elapsed,  the  method  is 
neither  logical  nor  practicable. 

Accountants  Doubtful  About  New  System 

It  is  not  germane  to  the  question,  however,  how  far  the 
Bureau's  hypothesis  and  method  may  be  defended  on  logical 
grounds,  and  by  a  priori  reasoning.  The  question  is  not  a  spec- 
ulative, but  a  practical,  one ;  not  what  ought  to  be  the  rule  for 
testing  the  true  profits  of  mining,  but  what  is.  The  mining 
corporations  whose  surplus  earnings  are  attacked  as  an  element 
of  invested  capital  to  the  extent  of  millions  of  dollars,  who  are 
now  told  that  during  all  these  years  their  books  and  accounts 
have  been  kept  incorrectly,  that  their  true  profits  have  been 
wrongly  computed  each  year  by  hundreds  of  thousands  of  dol- 
lars, and  that  their  accountants  were  wandering  in  darkness, 
will  require  a  good  deal  of  convincing.  They  will  scarcely  be 
consoled  for  their  loss  when  the  Bureau  tells  them  that  the  long- 
prevailing  rules  under  which  mining  profits  were  reckoned 
were  unsound  and  invalid ;  that  while  such  rules  were  the  basis 
of  all  profit  accounting  required  by  legislatures,  courts,  and 
business  men,  nevertheless  they  were  erroneous  in  principle  and 
method,  and  that  it  is  time  to  revise  all  this  profit  accounting 
of  past  years  and  put  it  on  a  correct  foundation.  It  seems  that, 
according  to  the  Bureau,  these  profit  accountings  of  past  years 
were  tainted  with  an  element  of  original  capital ;  and  this  ele- 
ment is  to  be  removed  by  actuarial  calculations  of  "pure"  in- 
come, so  that  no  trace  shall  remain.  True,  the  original  cost  or 
capital-value  of  the  mineral  deposit  may  be  wholly  intact,  and 
the  mine  operator  unable  to  understand  why  he  must  provide 
out  of  his  profits  for  the  "recovery"  of  something  which  he 
has  not  lost.  True,  also,  this  "recovery"  is  to  be  figured  by 
means  of  mathematical  computations  resting  upon  very  uncer- 
tain and  variable  data.  Apparently,  however,  the  perfection 
and  durability  of  the  logical  and  actuarial  structure  does  not 
depend  upon  its  very  sandy  foundation. 


DEPLETION  AND  INVESTED  CAPITAL  655 

Previous  Decisions  Quite  Different  to  New  Ruling 

The  fact  is  that  the  reckoning  of  the  profits  from  mining  is 
distinguished  by  a  peculiar  principle  and  by  special  rules  which 
have  been  recognized  during  a  long  term  of  years  not  only  by 
the  lay  mind,  but  by  legislators,  by  the  courts  and  by  account- 
ants, and  which  are  totally  at  variance  with  the  Bureau's 
hypothesis.  It  is  important  not  only  to  understand  this  pecu- 
liar principle,  and  these  special  rules  for  determining  the  peri- 
odic true  gains  or  losses  from  mining,  but  also  to  realize  that 
they  were  confirmed  by  the  authority  of  a  memorable  group  of 
decisions  of  the  Supreme  Court,  which  settled  the  questions 
once  and  for  all.  The  leading  case,  Stratton's  Independence  v. 
Howbert  (231  U.  S.,  399),  was  decided  in  December,  1913,  and 
the  subsequent  cases  in  the  group  at  various  times  in  1916, 
1917  and  1918,  upon  the  principles  upheld  in  the  Stratton  case. 
It  is  equally  important  to  bear  in  mind  that  nothing  in  recent 
tax  legislation  has  impaired  the  validity  of  the  principles  up- 
held by  the  Court  in  these  cases,  and  that  the  true  profits  and 
losses  from  the  operations  of  mining  property  (as  distin- 
guished from  present  day  net  taxable  income)  must  be  reck- 
oned today  by  the  same  principles 

Before  considering  the  fundamental  principles  upon  which 
the  accounting  rules  for  determining  the  true  profits  of  mining 
rest,  it  is  necessary  to  explain  the  three  peculiar  characteristics 
of  mining  which  have  caused  the  accounting  practice.  They 
have  been  stated  concisely  and  lucidly  by  the  Supreme  Court 
in  the  leading  case : 

"The  peculiar  character  of  mining  property  is  sufficiently 
obvious.  Prior  to  development  it  may  present  to  the  naked 
eye  a  mere  tract  of  land  with  barren  surface,  and  of  no 
practical  value  except  for  what  may  be  found  beneath. 
Then  follow  excavation,  discovery,  development,  extrac- 
tion of  ores,  resulting  eventually,  if  the  process  be  thor- 
ough, in  the  complete  exhaustion  of  the  mineral  contents 
so  far  as  they  are  worth  removing.  Theoretically,  and  ac- 
cording to  the  argument,  the  entire  value  of  the  mine,  as 
ultimately  developed,  existed  from  the  beginning.  Practi- 
cally, however,  and  from  the  commercial  standpoint,  the 
value — that  is,  the  exchangeable  or  market  value — de- 
pends upon  different  considerations.  Beginning  with  lit- 
tle, when  the  existence,  character  and  extent  of  the  ore 


65tl  PROCEEDINGS   OF*  AMERICAN  MINING   CONGRESS 

deposits  are  problematical,  it  may  increase  steadily  or  rap- 
idly so  long  as  discovery  and  development  outrun  deple- 
tion and  the  wiping  out  of  the  value  by  the  practical  ex- 
haustion of  the  mine  may  be  deferred  for  a  long  term  of 
years." 

(Stratton's  Independence  v.  Howbert,  231  U.  S.,  399.) 
Brief  of  the  Stratton  Decision 

Thus  we  see  that  the  three  peculiar  features  which  have  de- 
termined the  special  accounting  rules  are  (1)  the  impossibility 
of  determining  the  existence,  character  and  extent  of  the  ore- 
bodies  until  many  years  have  elapsed;  (2)  the  distinction  be- 
tween the  original  cost  or  original  commercial  value  of  the 
mine,  and  the  true  intrinsic  or  latent  value  ultimately  disclosed 
by  exploration  and  development;  and  (3)  the  fact  that  removal 
of  minerals  does  not  necessarily  imply  a  shrinkage  in  the  orig- 
inal cost  or  original  commercial  value  of  the  mining  property ; 
on  the  contrary,  the  commercial  value  may  increase  coinci- 
dently  with  removal  of  minerals  by  reason  of  discovery  and 
development  outrunning  depletion. 

Out  of  these  peculiar  characteristics  there  arose  special  rules 
in  the  reckoning  of  profits  from  mining  differing  sharply  from 
the  rules  for  ascertaining  the  profits  of  commercial  enterprises 
generally: 

FIRST  :  In  the  reckoning  of  earnings  from  mines,  the  entire 
revenues  derived  from  mining  constitute  income  and  profits, 
without  any  deduction  whatever  for  original  cost  or  original 
commercial  or  market  value  of  the  mineral  deposit,  as  the  case 
may  be.  The  wiping  out  of  the  original  cost  or  commercial 
value,  through  the  exhaustion  of  the  mine,  is  considered  and 
booked  as  a  loss  of  capital,  and  is  entirely  separate  and  distinct 
from  a  loss  of  profits. 

Cost  of  Mining  Not  an  Ordinary  Expense 

The  cost  or  the  commercial  value  of  ore  or  minerals  removed 
during  the  operation  of  a  mining  property  may  not  be  booked 
in  the  accounts  as  an  ordinary  and  necessary  expense  of  min- 
ing, nor  as  part  of  the  cost  of  goods  sold,  nor  as  depreciation, 
nor  as  a  charge  against  profit  or  loss,  directly  or  indirectly. 

SECOND:  The  foundation  of  mine  accounts  is  the  original 
cost  of  the  mineral  deposit  if  acquired  for  cash,  or  its  exchange- 


DEPLETION  AND  INVESTED  CAPITAL  657 

able  or  market-value  if  acquired  in  exchange  for  stock  of  the 
purchasing  company.  When  any  shrinkage  or  impairment  of 
this  original  cost  or  original  commercial  value  occurs,  it  should 
be  entered  in  the  accounts  as  a  loss  of  capital.  Such  shrinkage 
or  impairment  is  a  question  of  fact,  which  can  be  established 
only  by  means  of  a  valuation,  and  which  depends  mainly  upon 
the  character  and  extent  of  the  delimited  ore  reserves  in  the 
mine  at  the  date  of  acquisition,  and  at  the  date  of  valuation. 

So  long  as  the  commercial  value  of  the  mine  is  at  least  equal 
to  its  original  cost  or  original  commercial  value;  and  so  long 
as  the  known  ore  reserves  are  at  least  equal  in  character  and 
extent  to  those  known  originally,  the  accounts  do  not  provide 
for  the  wiping  out  of  the  original  cost  or  original  commercial 
value. 

Mining  Ore  Implies  Shrinkage  of  Intrinsic  Capital- Value 

The  removal  of  minerals  from  a  deposit  implies  a  shrinkage 
of  economic  or  intrinsic  capital-value,  but  does  not  necessarily 
or  even  usually  connote  a  shrinkage  of  original  cost-value  or 
original  commercial-value,  for  frequently  the  removal  of  min- 
erals is  offset  by  discovery  and  development  of  orebodies  not 
previously  known  and  delimited.  The  shrinkage  of  economic 
or  theoretical  capital-value,  as  distinguished  from  impairment 
of  original  cost-value  or  original  commercial-value,  is  not 
recognized  in  mine  accounts. 

I.  One  of  the  chief  difficulties  in  determining  profits  arises 
in  connection  with  writing  off  or  amortizing  the  capital-value 
of  assets  which  waste  in  the  process  of  producing  income,  but 
which  may  last  over  a  long  period  of  years.  The  assets  re- 
ferred to  may  be  regarded  generically,  as  sources  out  of  which 
income  emerges ;  not  only  inherently  wasting  material  assets, 
such  as  plant,  machinery,  buildings,  etc.,  and  the  proprietor- 
ship of  natural  resources,  such  as  mines,  but  also  the  right  to 
an  income,  such  as  leaseholds,  annuities,  royalties,  etc.  The 
source  of  all  incomes  is  subject  to  a  process  more  or  less  akin  to 
waste,  and  no  source  of  income  may  be  regarded  as  perpetual. 
Theoretically,  therefore,  an  annual  appropriation  out  of  the  net 
receipts  is  required  for  the  replacement  of  the  capital  used  in 
earning  the  income.  The  process  may  be  described  as  elimi- 
nating from  profits  the  element  of  capital.  Practically,  how- 


658  PROCEEDINGS  OF  AMERICAN  MINING   CONGRESS 

ever,  there  are  insuperable  difficulties  in  eliminating  from 
every  income  every  element  of  capital.  The  sources  of  incomes 
are  so  many  and  so  varied  that  general  principles  suitable  on  all 
occasions,  and  in  every  set  of  circumstances,  cannot  be  laid 
down  and  followed.  The  problem  involves  the  question  as  to 
when  and  in  what  cases  a  deduction  is  permissible ;  upon  what 
basis  the  deduction  shall  be  computed;  whether  or  not  a  time 
limit  to  the  recognition  of  wastage  should  be  set;  finally, 
whether  changes  in  the  value  of  the  asset  occurring  during  its 
use  affect  the  question. 

What  Is  Income 

It  is  not  necessary  in  this  place  to  discuss  these  highly  con- 
troversial and  much  debated  questions,  or  to  concern  ourselves 
with  theoretical  definitions  of  "capital,"  "income,"  "profits," 
etc.  The  reckoning  of  income  and  profits  is  at  best  an  estimate, 
an  approximation — it  is  not  a  mathematical  abstraction,  nor 
the  result  of  theoretically  perfect  rules  rigorously  applied.  In- 
come must  be,  and  can  only  be,  what  is  usually  and  commonly 
regarded  as  income.  In  that  practical  world,  with  which  alone 
the  accountant  must  deal,  there  is  no  place  for  fine-drawn  dis- 
tinctions and  involved  mathematical  computations,  in  deter- 
mining what  are  profits. 

In  the  case  of  mining,  however,  although  the  asset  which 
produces  the  income  (the  mine  itself)  must  necessarily  waste 
in  the  process,  we  are  able  to  avoid  the  difficult  questions  that 
arise  in  connection  with  the  wiping  out  of  the  original  cost  or 
original  capital-value  of  the  mining  property,  as  a  charge 
against  revenue  in  order  to  ascertain  profits,  for  the  reason 
that  a  special  rule  prevails,  owing  to  the  peculiar  nature  of 
mining  This  rule  is  that  the  entire  revenues  derived  from  min- 
ing are  to  be  regarded  as  profits,  within  the  technical  account- 
ing meaning  of  the  term,  and  that  no  deduction  whatever  may 
be  made  from  these  revenues  in  order  to  recover  the  original 
cost  of  the  mine,  or  its  original  exchangeable  or  market-value 
at  the  time  when  it  was  acquired.  The  ultimate  loss  that 
arises  from  the  wiping  out  of  the  original  cost  or  original  mar- 
ket-value by  the  exhaustion  of  the  mineral  deposits  is  a  loss  of 
capital,  which  loss  is  considered  separate  and  distinct  from  a 
loss  of  profits.  Even  though,  as  a  practical  matter,  the  entire 


DEPLETION  AND  INVESTED  CAPITAL  659 

revenues  derived  from  the  working  of  the  mine  from  the  com- 
mencement until  it  is  entirely,  exhausted,  must  necessarily  con- 
tain an  element  of  capital  corresponding  to  the  original  cost  of 
the  mineral  deposit,  or  its  original  commercial  value,  this  ele- 
ment of  original  capital  is  of  an  exceptional  character  which 
may  not  be  eliminated  from  the  revenues  in  order  to  leave  tech- 
nical profits. 

i 
Previous  Accepted  Views 

This  accounting  principle  and  rule  for  the  reckoning  of  min- 
ing profits  has  prevailed  invariably  in  cases  decided  under 
British  income-tax  laws.  It  was  the  accepted  view  in  this 
country  under  Federal  income-tax  laws  of  50  years  ago,  and 
in  more  modern  State  income-tax  laws.  It  is  the  accepted  view 
in  the  Western  States,  where  the  value  of  a  productive  mining 
property  for  purposes  of  tax  assessment  is  computed  by  capi- 
talization of  average  profits.  It  was  the  principle  and  rule  ac- 
cepted by  Congress  when  the  excise  tax  law  of  1909  was  passed, 
in  which  a  tax  was  levied  upon  the  "entire  net  income"  of  cor- 
porations. Under  this  Act,  as  interpreted  by  the  Supreme 
Court,  the  legislative  purpose  was  to  tax  the  conduct  of  busi- 
ness of  corporations  organized  for  profit  by  a  measure  "based 
upon  the  gainful  returns  from  their  business  operations" 
(Doyle  v.  Mitchell  Brothers  Company,  247  U.  S.,  179). 

The  prevailing  rule  was  recognized  by  the  Supreme  Court  in 
the  decision  handed  down  on  December  1,  1913,  in  the  Stratton 
case,  where  it  was  said : 

"It  is  true  that  the  revenues  derived  from  the  working 
of  mines  result  to  some  extent  in  the  exhaustion  of  the 
capital  *  *  *  yet  such  earnings  are  commonly  dealt 
with  in  legislation  as  income." 

Citations  of  Decisions  Concerning  Profits 

This  fundamental  rule  that  governs  the  ascertainment  of 
profits  from  mining,  by  which  no  allowance  out  of  revenues 
may  be  taken  in  respect  of  wastage  of  the  original  capital-value 
of  the  mine,  was  repeated  and  re-affirmed  in  1916,  1917,  and 
1918  in  Von  Baumbach  v.  Sargent  Land  Co.,  242  U.  S.,  503; 
Goldfield  Consolidated  Mines  Co.  v.  Scott,  247  U.  S.,  126; 
United  States  v.  Biwabik  Mining  Co.,  247  U.  S.,  116;  Stanton 


660  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

v.  Baltic  Mining  Co.,  240  U.  S.,  103,  and  Doyle  v.  Mitchell  Bros. 
Co.,  247  U.  S.,  179. 

In  Doyle  v.  Mitchell  Brothers  Co.  (247  U.  S.,  179)  in  which 
it  was  held  by  the  Supreme  Court  on  May  20,  1918,  that  in 
order  to  determine  the  loss  or  gain  in  the  cutting  of  standing 
timber  and  the  manufacture  of  lumber  therefrom  during  1909 
to  1912,  there  must  be  withdrawn  from  the  gross  proceeds  an 
amount  sufficient  to  restore  the  capital-value  of  the  timber 
which  existed  at  the  commencement  of  the  period  under  con- 
sideration, the  Court  refuted  the  argument  that  these  gains 
should  be  determined  by  the  same  principle  as  the  profits  from 
mining,  and  stated  that  the  two  cases  presented  "only  a  super- 
ficial analogy." 

Hardships  on  Non-Profitable  Mines 

Under  ordinary  circumstances,  and  in  times  when  no  income 
or  profits  taxes  are  in  effect,  the  special  rule  whereby  the  profits 
derived  from  mining  are  calculated  without  any  deduction  for 
the  original  cost  or  original  market-value  of  the  mine,  does  not 
work  any  particular  hardship,  and  its  interest  is  rather  specu- 
lative and  theoretical  than  practical.  When,  however,  income 
and  profits  taxes  come  to  be  assessed,  the  long-prevailing  rule 
may  work  injustice  to  many  proprietors  of  mining  property, 
and  place  them  at  a  disadvantage  compared  with  other  indus- 
tries. This  hardship  and  injustice  was  recognized  by  the 
Supreme  Court  in  the  Sargent  Land  Co.  case,  and  inspired  its 
opinion  of  January  15,  1917,  that  in  assessing  income  taxes  a 
fair  argument  from  equitable  considerations  arises  for  relief 
from  the  severity  of  the  prevailing  accounting  principle  and 
rule  for  the  ascertainment  of  the  profits  from  mining.  In  this 
case  it  was  said : 

"A  fair  argument  arises  from  equitable  considerations, 
that  owing  to  the  nature  of  mining  property,  an  allowance 
in  assessing  income  taxes  should  be  made  for  the  removal 
of  the  ore  deposits  from  time  to  time." 

In  recent  years,  Congress  has  been  impressed  with  such  "fair 
argument  from  equitable  considerations,"  and  for  the  purpose 
of  mitigating  the  hardship  of  the  established  accounting  rule, 
a  concession  was  made  in  the  Income  Tax  Law  of  1913,  as  fol- 
lows: 


DEPLETION  AND  INVESTED  CAPITAL  661 


"In  the  case  of  mines  a  reasonable  allowance  for  deple- 
tion of  ores  and  all  other  natural  deposits,  not  to  exceed  5 
per  cent,  of  the  gross  value  at  the  mine  of  the  output  for 
the  year  for  which  the  computation  is  made." 

In  many  cases  the  concession  offered  by  the  foregoing  clause 
of  the  1913  law  was  quite  inadequate  when  measured  by  the 
actual  depletion  of  the  mineral  stock;  yet  the  Supreme  Court 
upheld  the  law,  and  approved  the  idea  that  the  reckoning  of 
taxable  income  was  correct,  even  though  an  inadequate  allow- 
ance was  made  for  the  exhaustion  of  the  orebodies.  (Stanton 
v.  Baltic  Mining  Co.,  240  U.  S.,  103.)  This  was  a  consistent 
decision;  for  under  the  established  principle  and  rule  all  the 
mine  revenues  were  essentially  and  technically  profits,  and  any 
allowance  granted  therefrom  by  Congress  was  gratuitous,  a 
statutory  benefit  and  relief,  not  an  inherent  right. 

How  the  Law  of  1916  Operated 

In  the  1916  Income  Tax  Law,  the  statutory  benefit  and  relief 
to  the  mining  industry  was  continued,  but  the  restrictive  for- 
mula was  less  rigorous.  Under  that  law  there  might  be  a  rea- 
sonable allowance  for  the  loss  of  capital,  "not  to  exceed  the 
market- value  in  the  mine  of  the  product  thereof  which  has  been 
mined  and  sold  during  the  year." 

In  the  Revenue  Act  of  1918,  the  statutory  benefit  and  relief 
to  the  mining  industry  was  greatly  enlarged,  the  restrictive 
formula  disappeared,  and  the  scope  of  the  capital  sum  to  be 
recovered  by  these  allowances  was  expanded  to  admit  new  dis- 
coveries of  orebodies. 

The  progressive  improvement  in  the  position  of  the  mining 
corporations  made  by  the  Income  Tax  Laws  of  1913,  1916,  and 
1918,  was  the  result  of  concessions  made  to  the  industry  by 
Congress,  whereby  increasingly  liberal  allowances  were 
granted  to  cover  the  loss  of  capital  known  as  depletion.  These 
concessions,  however,  were  expedients  for  counteracting  the 
severity  of  income  taxes  that  would  be  levied,  otherwise,  upon 
the  profits  of  mining  computed  under  an  accounting  principle 
and  rule  which  had  long  prevailed,  and  which  regarded  all 
mine  revenues  as  profits,  and  none  as  assignable  to  recovery 
of  original  cost  or  capital.  These  concessions,  expedients  of 
tax  legislation,  do  not  impair  the  validity  of  the  accounting 
principle  and  rule.  They  are  designed  to  counteract  its  effect. 


662  PROCEEDINGS   OF  AMERICAN  MINING  CONGRESS 

Accounting  Principles  of  a  Generation  Past 

It  is  true  that,  a  generation  ago,  the  prevailing  accounting 
principle  and  rule  whereby  the  annual  profits  from  mining 
were  reckoned  without  any  deduction  for  original  cost  or  orig- 
inal market- value  of  the  mineral  deposits,  encountered  a  meas- 
ure of  opposition  from  writers  on  accountancy.  These  writers 
could  see  no  logical  reason  for  the  rule,  and  instead  "that  the 
mining  company  can  no  more  legitimately  treat  the  net  annual 
receipts  as  net  profits  than  can  the  merchant  neglect  the  cost 
price  of  his  commodity,  or  the  manufacturer  disregard  the  fac- 
tory cost  of  his  product  in  his  estimate  of  profits."  The  trouble 
with  this  reasoning  is  that  it  relies  exclusively  upon  analogy, 
and  an  analogy  which  the  Supreme  Court  has  well  character- 
ized as  "superficial."  It  does  not  take  into  consideration  the 
peculiar  nature  of  mining,  so  concisely  and  lucidly  pointed  out 
by  the  Supreme  Court  in  the  citation  heretofore  made  from  the 
Stratton  case.  The  great  majority  of  investments  in  mineral 
deposits  do  not  even  remotely  suggest  the  conditions  or  exhibit 
the  characteristics  of  an  ordinary  purchase  of  a  stock  of  mate- 
rials for  consumption  in  productive  processes,  etc. 

The  objections  that  the  accounting  writers  of  a  generation 
ago  entertained  to  the  authorized  rule  for  computing  the  an- 
nual profits  from  mining,  without  any  deduction  for  original 
cost  of  the  mineral  deposits,  were  strengthened  by  technical 
reasons.  They  were  accustomed  to  the  general  rule  whereby 
all  changes  in  the  book-value  of  certain  assets,  implying 
changes  in  the  net  wealth  which  had  occurred  during  the  ac- 
counting period,  must  be  reflected  in  the  profit  and  loss  account 
during  the  period.  They  could  see  no  reason  why  a  shrinkage 
in  the  cost-value  of  a  mining  property  should  be  excepted  from 
the  general  rule ;  and  could  see  no  reason  why  the  profits  of  the 
period  should  not  be  charged  with  any  such  shrinkage  which 
took  place  during  the  period.  Here  again  their  reasoning  was 
based  upon  analogy ;  an  analogy  that  did  not  exist,  essentially, 
owing  to  the  peculiar  characteristics  of  mining. 

Hatfield's  Theories 

Later,  the  technical  accounting  difficulty  arising  from  the 
concept  of  a  loss  of  original  capital,  separate  and  distinct  from 
a  loss  of  profits,  was  solved  by  Professor  Hatfield  in  his  stand- 


DEPLETION  AND  INVESTED  CAPITAL  663 

ard  work  on  'Modern  Accounting/  chapters  XI  arid  XII  on  the 
subject  of  'Profits.'  Realizing  that  the  general  rule  requiring 
changes  in  the  book-value  of  certain  assets  to  be  reflected  in 
the  current  profit  and  loss  account  is  not  without  exceptions,  he 
posed  the  main  question  thus : 

"Can  capital  be  lost,  without  having  such  a  technical 
loss  as  must  appear  in  the  debit  of  the  Profit  and  Loss 
account?"  (p.  199). 

Accountants  are  familiar  with  Professor  Hatfield's  analysis 
and  settlement  of  this  question,  and  we  need  not  go  over  the  old 
ground.  He  found  no  difficulty  in  accepting  the  idea  that  there 
can  be  a  loss  in  the  value  of  capital  assets  which  would  affect 
only  the  capital  accounts,  and  would  leave  the  profits  of  the 
year  undisturbed.  Nor  did  he  find  any  special  difficulty  in  dis- 
posing of  such  capital  losses  in  the  balance  sheet : 

"If  law  requires  or  permits  the  reduction  of  nominal 
capital  stock  and  that  is  done,  the  loss  is  deducted  imme- 
diately from  the  Capital  account"  (p.  220) . 

If,  on  the  other  hand,  the  legal  steps  necessary  to  reduce  the 
nominal  capital  have  not  been  taken,  the  shrinkages  in  original 
cost  or  original  value  of  the  assets  are  to  be  shown  under  sepa- 
rate caption  as  "Loss  on  Capital  Account,"  or  "some  other  de- 
scriptive term  may  be  used,  the  only  requirement  being  that  it 
be  not  misleading"  (p.  221) . 

Surplus  Constitutes  Part  of  Capital 

In  commenting  upon  Professor  Hatfield's  treatment  of  this 
subject  of  capital  losses,  and  the  proper  way  of  showing  them 
in  the  accounts  and  the  balance  sheet,  a  recent  text-book  ad- 
vanced the  suggestion  that  while  "the  best  practice  compels  the 
showing  of  impairment  items  as  direct  deductions  from  capi- 
tal," yet,  "if  a  surplus  has  been  accumulated  out  of  previous 
profits,  such  surplus  constitutes  part  of  the  capital,  and  pro- 
vides the  logical  place  for  setting  up  the  charge."  This  sugges- 
tion cannot  be  admitted,  however,  in  the  case  of  a  corporation ; 
for  the  premise  upon  which  the  argument  rests  will  not  bear 
examination.  The  argument  is  based  wholly  upon  the  proposi- 
tion that  surplus  "constitutes  part  of  the  capital";  but  this 
proposition  does  not  hold  in  the  case  of  a  corporation,  except  in 


664  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

a  loose  sense.  The  term  "surplus"  is  here  used  in  its  sense  of 
profits  withheld  from  distribution  by  appropriate  corporate 
action.  But,  the  status  of  such  reserved  profits  is  entirely  dif- 
ferent from  that  of  the  permanent  and  fixed  capital,  both 
legally  and  in  the  accounting  sense.  The  surplus  is  not  immov- 
ably fixed  in  the  business,  nor  does  it  constitute  part  of  the 
permanent  capital  of  the  corporation.  It  may  be  turned  back 
into  undivided  profits  account,  if  the  directors  so  decide ;  or  it 
may  be  distributed  as  dividends  by  appropriate  action. 

No  Changes  in  Capital- Value  if  Reserves  Are  Maintained 

II.  Under  long-established  practice  in  the  industry,  no 
entries  are  made  in  the  accounts  affecting  the  original  cost  or 
original  commercial  value  of  a  mining  property  unless  there  is 
an  actual  impairment  of  such  original  commercial  value,  estab- 
lished by  an  actual  valuation.  So  long  as  the  original  cost  or 
capital-value  is  maintained  intact,  that  is  to  say,  so  long  as  the 
known  ore  reserves  remain  at  least  equal  to  those  known  origi- 
nally, no  entries  are  required.  The  general  rule  is  that  in 
stating  the  accounts  of  a  given  year  any  shrinkage  of  original 
cost-value  or  original  capital-value  of  the  mine  which  has  actu- 
ally occurred  should  be  shown;  but  such  shrinkage  of  capital 
is  a  question  of  fact,  dependent  mainly  upon  the  comparative 
extent  and  character  of  the  delimited  ore  reserves  at  the  date 
of  acquisition,  and  at  the  date  of  valuation. 

That  actual  impairment  of  the  original  cost-value  or  original 
capital-value  of  a  mining  property,  established  by  a  valuation, 
must  take  place  before  any  necessity  arises  for  a  provision  in 
the  accounts  toward  wiping  out  the  original  value  is  not  only 
universal  practice  in  the  mining  industry,  but  is  admitted  by 
the  text-writers  who  have  touched  on  the  subject.  The  rule  is 
even  extended  to  cover  cases  where  an  actual  shrinkage  of  orig- 
inal capital-value  of  the  mining  property  is  suspected,  but  can- 
not be  demonstrated  by  precise  tonnage  and  valuation  figures. 

"Where  the  amount  of  shrinkage  is  known,  it  must  ap- 
pear in  the  accounts.  But  where  the  accuracy  of  a  valua- 
tion is  specious,  where  the  only  ascertainable  value  is  the 
original  cost,  it  may  be  less  harmful  for  the  balance  sheet 
to  show  the  cost,  indicating  that  it  does  not  represent  the 
present  value."  (Hatfield,  'Modern  Accounting/  p.  222.) 


DEPLETION  AND  INVESTED  CAPITAL  665 

In  1904,  a  prominent  accounting  practitioner  in  a  paper  read 
at  the  St.  Louis  Congress  of  Accountants,  and  afterwards 
quoted  in  certain  text-books,  appeared  to  take  issue  with  the 
universal  practice  and  the  accepted  accounting  rule,  whereby 
extraction  of  minerals  from  a  mine  was  disregarded  in  the  ac- 
counts unless  an  actual  impairment  of  cost-value  or  original 
capital-value  had  taken  place,  established  by  a  valuation.  This 
writer  argued  that  provision  should  be  made  for  exhaustion  of 
sub-soil  products  even  though  the  quantity  "known  to  be  in  a 
definite  tract  at  the  end  of  the  period  is  largely  in  excess  of  that 
which  had  been  discovered  at  the  beginning  of  the  period."  Un- 
fortunately for  the  success  of  his  argument,  it  was  announced 
as  resting  upon  a  premise  that  does  not  bear  examination. 
Further,  it  admitted  the  very  necessity  of  valuation  which  it 
was  designed  to  combat : 

"The  product  taken  out  of  the  land  becomes  stock  in 
trade  as  soon  as  it  is  extracted,  and  whatever  the  land  was 
worth  before  its  extraction,  it  is  clearly  worth  an  appreci- 
able amount  less  thereafter."  (Dickinson,  'Accounting 
Practice  and  Procedure/  p.  174.) 

The  above  premise  relies,  first,  upon  the  fancied  analogy 
between  ores  extracted  from  a  mineral  deposit,  and  the  stock 
in  trade  of  a  merchant  or  manufacturer.  This  analogy  has 
already  been  disposed  of  as  worthless  and  unsound  in  most 
cases,  or  as  the  Supreme  Court  terms  it,  "superficial."  The 
premise  next  relies  upon  the  supposition  that  the  extraction  of 
minerals  from  a  mine  invariably  reduces  the  "worth"  of  the 
property,  and  it  is  fair  to  assume  that  the  word  "worth"  was 
used  in  its  ordinary  significance  of  exchangeable  or  market- 
value.  It  is  well  known,  however,  that  the  extraction  of  min- 
erals from  many  mining  properties,  year  by  year,  does  not 
result,  either  invariably  or  even  usually,  in  a  shrinkage  in  com- 
mercial value.  On  the  contrary,  the  commercial  value  of  the 
mining  property  frequently  increases,  steadily  and  rapidly, 
during  a  long  term  of  years  while  extraction  is  proceeding,  for 
the  reason  that  discovery  and  development  of  new  orebodies 
proceeds  simultaneously. 

Valuation  of  Mines  Necessary  in  Accounting 

The  necessity  for  the  valuation  of  a  mineral  deposit  as  an 
indispensable  prerequisite  to  the  booking  of  any  shrinkage  in 


666  PROCEEDINGS  OF  AMERICAN  MINING   CONGRESS 

the  original  cost- value  or  original  capital- value,  a  necessity  sup- 
ported by  universal  mining  practice  and  admitted  by  the  text- 
writers,  is  a  phase  of  the  much  discussed  question  whether 
changes  in  the  market-value  of  assets  during  their  use  have 
any  bearing  upon  the  writing  off  or  amortizing  of  the  capital- 
value  of  assets,  which  waste  in  the  process  of  producing  in- 
come. The  general  rule  is  well-established,  by  custom  and  ac- 
counting teaching,  that  in  the  case  of  inherently  wasting  mate- 
rial assets,  such  as  plant,  machinery,  buildings,  etc.,  any 
changes  in  value  during  their  use  are  ignored,  and  the  writing 
off  or  amortizing  of  such  capital-values  proceeds  without  re- 
gard to  valuation.  Natural  resources,  such  as  mines,  however, 
constitute  a  well-known  exception  to  the  general  rule,  as  we 
have  shown. 

Opinion  of  the  Bureau 

This  exception  is  not  admitted  by  the  Bureau,  as  we  have 
seen.  On  the  contrary,  the  Bureau  has  adopted  a  rule  whereby 
the  original  cost-value  or  original  commercial-value  of  a  min- 
ing property  must  be  wiped  out  in  the  accounts,  in  all  cases, 
continuously  and  progressively  as  extraction  of  mineral  units 
takes  place,  regardless  of  valuation,  and  regardless  of  changes 
in  value  which  may  have  occurred  during  the  accounting  or 
taxable  period  It  is  commonly  said  that  the  Bureau  relies 
upon  the  decision  of  the  Supreme  Court  in  Doyle  v.  Mitchell 
Brothers  Co.  (247  U.  S.,  179)  for  justification  of  the  principle 
that  changes  in  value  of  the  mineral  deposit  during  the  account- 
ing or  taxable  period  may  be  ignored,  and  the  depletion  allow- 
ance made  even  though  the  value  has  increased.  The  decision 
in  that  important  case,  however,  neither  supports  nor  con- 
demns the  principle  mentioned,  for  the  reason  that  it  was  not 
an  issue  in  the  case.  The  Court  decided  that  the  timber  com- 
pany, in  determining  its  gains  or  losses  during  a  specified 
period,  was  entitled  under  the  circumstances  alleged  to  a  de- 
duction from  its  gross  revenues  "to  restore  the  capital  value 
that  existed  at  the  commencement  of  the  period  under  consider- 
ation." One  of  the  conditions  which  the  plaintiff  proved,  ap- 
parently, was  that  no  change  in  market-value  of  stumpage  or 
timber  lands  occurred  during  the  accounting  period;  and  the 


DEPLETION  AND  INVESTED  CAPITAL  667 

decision  of  the  Court  took  this  circumstance  into  account  ex- 
pressly in  its  conclusion.    The  Court  said: 

"There  having  been  no  change  in  market  values  during 
these  years,  the  deduction  did  but  restore  to  the  capital  in 
money  that  which  had  been  withdrawn  in  stumpage  cut, 
leaving  the  aggregate  of  capital  neither  increased  nor 
decreased." 

It  is,  of  course,  useless  to  speculate  what  the  decision  of  the 
Court  would  have  been  if,  during  the  taxable  period  under 
review,  the  value  of  the  timber  which  had  been  cut  had  been 
restored  by  newly-created  values,  such  as  higher  market  prices 
or  increment  or  growth  in  the  substance. 

It  is  evident,  therefore,  that  the  reasoning  in  Doyle  v. 
Mitchell  Brothers  Co.  supports  rather  than  weakens  the  estab- 
lished accounting  rule  whereby  no  entries  are  made  in  the  ac- 
counts affecting  the  original  cost-value  or  original  commercial 
value  of  a  mining  property,  unless  and  until  there  has  been  an 
impairment  of  such  basic  investment  established  by  an  actual 
valuation. 

Adjustment  of  Capital 

III.  In  this  discussion  we  must  keep  clearly  in  mind  that 
the  essential  question  is  what,  if  any,  adjustment  of  invested 
capital  of  a  mining  company  is  required  in  respect  of  minerals 
extracted  and  sold  from  the  commencement  of  mining  opera- 
tions down  to  the  taxable  year. 

We  have  seen  that  the  Bureau  in  approaching  this  subject 
has  focussed  its  attention  upon  the  surplus  earnings  of  the 
mining  company  accumulated  during  the  years  prior  to  the 
taxable  year,  an  authorized  element  of  invested  capital.  The 
Bureau  has  proceeded  upon  the  hypothesis  that  revenues  de- 
rived since  the  commencement  of  operations  from  the  extraction 
of  minerals  are  not  "true"  profits  unless  a  portion  of  such  reve- 
nues has  been  assigned  toward  recovery  of  the  cost  of  the  mine, 
or  its  original  invested-capital  value.  We  have  shown  that  this 
theory  is  untenable,  for  it  is  in  conflict  with  custom  and  firmly- 
established  accounting  principles  under  which  true  profits  from 
mining  must  be  reckoned  without  any  deduction  whatever  for 
this  purpose.  The  mine  revenues,  without  any  deductions  for 
depletion  of  the  mineral  stock,  being  true  profits,  and  the  accu- 


668  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

mulations  of  such  profits  being  admissible  as  invested  capital, 
no  adjustment  thereof  in  respect  of  minerals  extracted  and  sold 
since  the  commencement  of  operations  is  permitted. 

It  follows  that  any  adjustment  of  invested  capital  required 
by  the  gradual  exhaustion  of  the  mining  property  can  be  made 
only  in  the  capital  account  itself.  We  have  shown  that,  in  the 
case  of  mining  property,  no  adjustment  of  the  capital  account 
in  respect  of  removal  of  minerals  is  permitted  by  the  account- 
ing rule,  until  there  occurs  a  shrinkage  in  the  value  of  the 
mining  property  as  a  whole  below  the  cost  or  original  commer- 
cial value  thereof,  established  by  an  actual  valuation.  In  dis- 
regard of  this  principle,  however,  the  depletion  rule  adopted 
by  the  Bureau  for  adjustment  of  the  cost  or  invested-capital 
value  of  the  mining  property  ignores  actual  conditions,  rejects 
valuation,  and  adopts  the  theory  that  every  unit  of  mineral 
extracted  from  the  mine  from  the  commencement  of  operations 
connotes,  necessarily  and  invariably,  an  impairment  of  paid-in 
capital. 

Bureau  Tries  to  Make  Its  System  Permanent 

The  conflict  between  the  rule  adopted  by  the  Bureau  and  the 
established  accounting  practice  arises  from  the  effort  of  the 
Bureau  to  expand  into  permanent  and  universal  accounting 
principles,  and  apply  retroactively,  the  stautory  provisions  for 
depletion  allowances  granted  by  recent  Income  Tax  Laws. 
Under  the  laws  of  1916,  1917  and  1918,  as  we  have  seen,  Con- 
gress granted  relief  to  the  mining  industry  from  the  hardship 
of  the  accounting  rule  which  reckoned  profits  from  mining 
without  any  deduction  for  recovery  of  original  cost  or  capital- 
value  of  the  mine.  The  relief  so  granted  took  the  form  of 
"reasonable"  allowances,  to  be  based  on  cost  or  fair  market- 
value  at  March  1,  1913,  according  to  circumstances,  and  under 
rules  and  regulations  to  be  prescribed  by  the  department.  The 
Bureau  decided,  in  interpreting  the  intent  of  Congress,  and  in 
exercising  the  discretionary  and  administrative  powers  granted 
to  it  by  Congress,  that  an  administrative  rule  for  computing 
annual  allowances  for  depletion  should  be  adopted  which 
allows  a  definite  rate  for  each  unit  of  mineral  extracted  and 
sold  during  the  year,  and  which  ignores  actual  valuation  of  the 
mine  and  periodic  appraisals. 


DEPLETION  AND  INVESTED  CAPITAL  669 

We  see,  then,  that  the  fundamental  distinction  between  the 
permanent  accounting  rules  for  booking  depletion,  on  the  one 
hand,  and  the  administrative  tax  rule  for  the  ascertainment  of 
present-day  depletion  allowances,  on  the  other,  is  that  the  for- 
mer requires  and  is  based  upon  periodic  valuation  of  the  min- 
ing property,  whereas  the  administrative  tax  rule  disregards 
such  valuation.  The  established  accounting  rule  prevails  as  the 
permanent  and  universal  method  of  keeping  the  mining  ac- 
counts, of  ascertaining  the  impairment  of  paid-in  capital,  and 
determining  the  true  profits  derived  from  mining  operations. 
The  administrative  rule  prevails  as  the  authorized  rule  for 
ascertaining  present-day  depletion  allowances  for  purposes  of 
income  and  profits  taxes.  Each  of  the  two  rules  has  its  dis- 
tinctive purpose  and  its  special  justification.  The  accounting 
rule  is  justified  by  established  custom,  precedent  and  authority. 
The  administrative  rule  is  justified  as  giving  effect  to  the  intent 
of  Congress  as  expressed  in  the  particular  tax  laws  to  which 
it  is  applied.  Further,  it  is  justified  by  practical  considerations 
incident  to  tax  administration. 

Meaning  of  Depletion  Clauses 

It  is  evident  from  the  wording  of  the  depletion  clauses  of  the 
1916  and  1917  Income  Tax  Laws,  that  Congress  did  not  intend 
the  annual  allowances  to  be  reckoned  under  the  permanent 
accounting  rule  for  booking  depletion,  which  rests  upon  real 
impairment  of  the  cost-value  established  by  actual  valuation 
of  the  mining  property.  The  depletion  clauses  of  those  laws 
contain  a  proviso  to  the  effect  that,  after  the  authorized  capital 
sum  shall  have  been  recovered  tax-free  through  such  allow- 
ances, "no  further  allowance  shall  be  made."  This  expression 
would  have  no  meaning  if  Congress  had  intended  the  annual 
depletion  allowances  to  be  determined  under  the  accounting 
rule.  The  words  may  be  interpreted  as  contemplating  the  pos- 
sibility of  a  depletion  rule,  for  purposes  of  tax  administration, 
under  which  the  annual  depletion  allowances,  on  the  one  hand, 
and  the  original  cost  or  original  capital-value  of  the  mineral 
deposit,  on  the  other,  need  not  expire  simultaneously,  as  they 
must  do  under  the  permanent  accounting  rule  which  requires 
periodic  appraisals. 

'The  recent  Income  Tax  Laws,  in  using  such  a  broad  and  gen- 


670  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

eral  term  as  "reasonable  allowances"  for  depletion,  and  in  di- 
recting the  Treasury  to  formulate  rules  and  regulations,  gave 
to  the  Bureau  the  widest  latitude  in  adopting  administrative 
rules.  Under  this  broad  power  the  Bureau  rejected  the  ac- 
counting rule,  and  has  adopted  for  administrative  purposes 
what  is  probably  the  only  workable  rule.  It  is  evident  that  the 
permanent  accounting  rule,  by  requiring  an  annual  valuation 
of  the  mineral  deposit  in  order  to  determine  depletion,  involves 
all  the  practical  difficulties  inseparable  from  such  appraisals ; 
and  its  adoption  as  a  basis  for  administering  a  tax  measure 
would  have  raised  well-nigh  insuperable  administrative  diffi- 
culties. 

Bureau's  Ruling  Artificial;  No  Effect  on  Established  Principles 

The  depletion  rule  adopted  by  the  Bureau  in  1917,  while  suit- 
able and  valid  for  its  purpose  of  administering  recent  income 
and  profits-tax  laws,  has  no  validity  apart  from  that  purpose. 
The  rule  is  an  artificial  product  of  income-tax  administration, 
which  has  no  bearing  or  effect  upon  permanent  principles  of 
accounting,  or  upon  the  established  accounting  rules  for  ascer- 
taining the  true  profits  or  losses  derived  from  mining.  Much 
less  may  the  administrative  depletion  rule  be  regarded,  as  the 
Bureau  appears  to  regard  it  as  embodying  accepted  account- 
ing principles  which  may  be  applied  to  a  revision  of  the  profit 
accountings  of  mining  corporations  for  a  generation  back,  for 
the  purpose  of  removing  an  imaginary  taint  of  original  capital 
from  the  residue  of  their  past  profits,  and  by  this  means  de- 
prive them  of  scores  of  millions  of  dollars  of  invested  capital. 

Income  and  profits,  as  was  said  by  the  Supreme  Court  in  the 
Stratton  case,  must  be,  and  can  only  be,  what  are  "commonly 
dealt  with  in  legislation"  as  income  and  profits.  They  are  to 
be  determined  by  considerations  which  have  their  influence 
upon  men  of  affairs,  and  not  by  actuarial  calculations  of  "pure" 
income,  or  subtle  mathematical  abstractions. 

In  the  foregoing  discussion  we  have  dealt  broadly  with  the 
concept  of  true  profits  from  mining,  as  an  element  of  invested 
capital.  It  must  be  kept  in  mind,  however,  that  since  1912 
there  has  been  a  statutory  concept  of  mine  income,  which  dif- 
fers from  true  profits  from  mining,  various  allowances  having 


DEPLETION  AND  INVESTED  CAPITAL  671 

been  granted  by  Congress  in.  the  tax  measures.  The  effect  of 
these  allowances  upon  invested  capital  is  not  within  the  scope 
of  this  article. 


METHODS  AND  PROBLEMS   OF  FEDERAL  TAXATION   OF 
THE  MINING  INDUSTRY. 

By  J.  C.  DICK, 

Head  of  Sub-Division  of  Natural  Resources  in  Bureau  of  Internal  Revenue, 

Washington,  D.  C. 

The  subject  of  taxation  is  a  vexatious  and  troublesome  prob- 
lem, yet  from  personal  necessity,  on  the  one  hand,  and  patriotic 
duty,  on  the  other,  it  commands  our  attention  and  best  efforts 
for  proper  solution  so  that  industry  will  not  be  throttled,  but 
that  it  will  move  with  accelerated  speed  in  order  to  carry  the 
great  burden  that  the  recent  war  placed  upon  this  Nation.  If 
the  public  utterances  of  some  of  our  greatest  statesmen  and 
politicians  of  either  party  during  the  recent  campaign  are  in 
harmony  with  the  thought  of  Congress  when  it  convenes,  we 
can  look  for  radical  changes  in  the  present  tax  law,  at  least  in 
the  present  excess-profits  law.  It  may  be  difficult  for  some  to 
conceive  of  a  just  tax  on  corporations  that  does  not  give  due 
consideration  to  the  capital  invested,  as  well  as  to  the  income 
derived  from  the  investment.  However,  regardless  of  repeals, 
modifications  or  substitutions,  these  changes  cannot  materially 
lessen  the  tax  burden ;  making  laws  will  not  decrease  the  public 
debt — that  will  be  dissipated  in  the  direct  ratio  of  increased 
efficiency  throughout  the  entire  industrial  United  States.  Our 
aim  should  be  100  per  cent,  efficiency,  and  that  can  be  realized 
only  when  all  economize  to  the  limit  as  well  as  spending  every 
effort  to  increase  production.  The  word  'slacker,'  coined  dur- 
ing the  war,  is  quite  applicable  to  any  individual  in  this  country 
who,  during  this  reconstruction  period,  will  not  take  hold  of 
the  wheel  of  progress  and  assist  in  forcing  it  to  revolve  in  its 
normal  manner.  To  my  mind,  a  campaign  of  publicity  along 
these  lines  would  do  more  to  lessen  the  tax  burden  than  the 
making  of  untried  laws.  No  tax  law  can  be  enacted  that  will 
function  with  equal  justice  toward  all  the  diversified  interests 
of  our  vast  Republic,  but  we  might  correct  the  imperfections  in 


672  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

the  present  law  as  time  and  experience  dictate  rather  than  go 
into  unknown  and  speculative  fields  for  a  new  system  that 
means  but  little  other  than  changing  the  form  as  to  how  this 
Government  shall  assess  the  four  billions  of  money  that  are 
needed  annually.  It  is  not  my  province  to  extol  the  virtues  of 
the  present  tax  law,  but  whether  it  is  good  or  bad,  it  is  on  the 
statutes,  and  as  a  Government  employe  in  my  present  capacity 
my  work  is  to  assist  in  the  administration  of  the  Act  as  it 
stands,  and  Regulations  45,  which  have  been  cussed  and  dis- 
cused,  is  still  the  primary,  as  it  is  also  the  post-graduate,  text- 
book in  the  Internal  Revenue  school  of  taxation. 

Natural  Resources,  Section  of  Income-tax  Unit 

One  feature  of  Government  work,  I  have  noticed,  is  that  the 
individual  believes  that  the  particular  section  in  which  he  toils 
is  the  most  important  one  in  the  Bureau.  I  shall  speak  of  the 
Natural  Resources  Sub-division  of  the  Income  Tax  Unit,  be- 
cause it  is  the  most  important  to  members  of  the  Mining  Con- 
gress. This  Sub-division  was  created  to  handle  all  cases  re- 
quiring valuation  for  depletion  purposes,  and  the  function  of 
the  valuation  sections  is  to  examine  the  tax  returns  and  the 
data  that  the  taxpayer  submits  as  to  his  valuation  and  deter- 
mine whether  or  not  the  depletion  deduction  made  in  the  return 
is  a  reasonable  one.  When  the  valuation  sections  were  first 
organized,  the  manner  in  which  valuation  should  be  made,  or 
rather  the  yardstick  that  the  Bureau  should  use  to  test  the 
valuations  made  by  the  taxpayer,  was  discussed  at  great  length 
for  some  months  prior  to  beginning  the  work.  Engineers  from 
the  oil  industry  were  brought  into  the  Bureau  to  handle  valua- 
tion problems  of  oil  and  gas  properties;  engineers  from  the 
metal  mines  were  secured  to  handle  problems  relating  to  metal- 
mine  valuation,  and  likewise  engineers  from  the  coal  and  tim- 
ber industries  to  handle  their  particular  problems.  There  are 
still  a  number  of  cases  in  the  valuation  sections  of  the  Natural 
Resources  Sub-division  awaiting  information  from  the  tax- 
payer relative  to  the  determination  of  his  depletion  deduction 
that  a  brief  outline  of  the  work  being  done  may  answer  the  in- 
quiry, "Why  still  worry  the  taxpayer"?  To  get  at  the  fair 
market-value  of  the  property  as  of  any  particular  date  requires 
the  most  intimate  knowledge  of  its  condition  at  the  specified 


PROBLEMS  OF  MINE  TAXATION  673 

time.  In  order  to  learn  of  this  condition,  questionnaires  were 
compiled  for  the  different  industries,  and  sent  to  the  taxpayer 
to  assist  him  in  furnishing  necessary  information  required  to 
get  at  a  fair  value.  There  have  been  a  great  many  criticisms  as 
to  the  form  of  this  questionnaire,  and  the  form  can  probably 
be  improved,  and  yet  as  the  questionnaire  must  fit  all  cases,  it 
includes  not  only  the  questions  pertinent  to  an  individual  case, 
but  is  sufficiently  broad  in  scope  to  comprehend  any  and  all 
cases  that  might  arise  in  the  given  industry.  The  results  the 
Department  gets  are  quite  varied.  In  some  instances  all  the 
questions  are  answered  and  the  questionnaire  of  the  taxpayer 
is  completely  filled  out.  In  other  cases  the  information  con- 
tained is  meagre  and  necessitates  correspondence  before  the 
value  can  be  fairly  determined.  The  valuation  engineer  must 
see  that  the  valuation  submitted  by  the  taxpayer  has  been  sub- 
stantiated in  order  to  arrive  at  a  reasonable  depletion  based 
thereon,  as  no  depletion  deductions  are  allowed  until  the  fair 
value  is  determined.  It  is  therefore  absolutely  necessary  that 
this  valuation  data  be  submitted,  or  an  unavoidable  injustice 
might  be  done  the  taxpayer  in  determining  his  tax.  To  sub- 
stantiate this  value  as  of  March  1,  1913,  the  engineer  examines 
the  questionnaire  to  see  whether  or  not  there  are  sales  on  or 
about  the  specified  date  that  would  determine  the  market- 
value  ;  or  if  there  had  been  leases  given  about  that  time  on  this 
or  similar  properties,  where  the  royalty  rates  in  the  agreement 
would  reflect  the  value  of  the  mineral  in  the  ground;  or 
whether  or  not  there  have  been  sales  of  similar  property  in  the 
neighborhood  that  .would  reflect  the  value  of  the  taxpayer's 
property.  By  investigating  the  profits  made  in  1913,  the  tax- 
payer's valuation  may  be  checked  by  estimating  the  probable 
profits  over  a  term  of  years  and  these  profits  reduced  to  a  pres- 
ent value.  In  a  valuation  of  this  kind  there  are  several  factors 
of  a  debatable  character  that  enter  into  the  computation, 
namely,  the  mineral  reserves,  the  price  at  which  the  product 
will  probably  sell  during  the  life  of  the  property,  the  operating 
cost  of  production,  the  discount  rate  that  should  be  used  in  re- 
ducing the  estimated  profits  to  a  present  value,  and  the  neces- 
sary plant  and  physical  equipment  that  will  be  necessary  to  de- 
rive these  profits.  In  applying  this  method  to  a  metals  valua- 
tion, the  engineer  would  use  the  tonnage,  grade  of  ore,  and  pro- 


674  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

duction  cost  set  forth  in  the  questionnaire  and  substantiated  by 
the  records.  The  rate  of  production  is  determined  by  investi- 
gation of  the  operations  of  the  taxpayer  at  the  date  of  valua- 
tion, and  also  taking  into  consideration  the  economic  condi- 
tions, which  factors  determine  the  probable  life  of  the  property. 

Future  Prices  and  Interest 

The  price  for  which  the  product  will  sell  during  future  years 
and  the  rate  of  interest  that  should  be  applied  to  reduce  the 
operating  profits  to  present  worth  have  been  much  debated,  and 
are  questions  upon  which  there  was  a  great  deal  of  technical 
discussion  a  year  ago.  In  the  case  of  metal  mines,  viewing  the 
conditions  as  of  March  1,  1913,  it  was  determined  that  65  cents 
an  ounce  would  have  been  a  fair  price  for  silver,  4%  cents  a 
pound  for  lead,  16^  cents  for  copper,  5.70  cents  for  zinc,  etc. 
In  the  matter  of  discount  rates  it  was  thought  advisable  to  use 
a  rate  of  interest  commensurate  with  the  risk  involved  in  the 
enterprise  and  a  safe  rate  to  apply  for  return  of  capital.  Where 
the  ore  is  practically  assured,  an  interest  rate  of  7  per  cent,  on 
investment  and  4  per  cent,  for  return  of  capital  is  used ;  where 
the  ore  is  but  partly  developed,  the  interest  rates  increase  up  to 
to  as  high  as  20  per  cent,  when  the  risks  in  the  entrprise  seemed 
to  warrant  such  high  expectancy  of  profit.  There  has  been  a 
great  deal  of  debate  as  to  why  the  Government  uses  these  two 
rates  rather  than  a  straight  discount  rate.  There  is  no  neces- 
sity of  entering  into  a  technical  discussion  of  the  merits  or 
demerits  of  this  plan,  which  assumes  that  the  total  operating 
profits  are  returned  in  equal  annual  installments  and  consist 
of  two  parts,  first,  a  fair  rate  of  interest  on  the  investment,  and 
second,  a  definite  annual  sum  which,  at  a  safe  rate  of  interest, 
compounded  annually,  will  redeem  the  investment. 

Data  From  Questionnaires  Important  to  Bureau 

Whatever  method  has  been  used  by  the  taxpayer  to  deter- 
mine the  value  of  his  property,  the  questionnaire  requires  that 
answers  be  made  to  all  questions  and  thus  supply  the  means  of 
checking  the  result.  The  regulations  prescribe  no  method,  but 
state  that  due  consideration  will  be  given  all  factors,  such  as 
cost,  actual  transfers  of  similar  property,  royalties  and  rentals, 
appraisals  by  approved  methods,  market  value  of  stock,  and 
others.  All  these  factors  are  given  consideration  in  the  valua- 


PROBLEMS  OF  MINE  TAXATION  675 

tion  section.  After  the  depletion  has  been  determined,  the  case 
goes  to  the  audit  section,  Where,  in  connection  with  the  field 
agent's  report,  all  other  questions  in  the  returns  of  the  tax- 
payer are  examined.  This  subject  has  been  re-hashed  and  is 
old,  but  has  been  reviewed  briefly  in  hopes  that  it  might  show 
the  taxpayer  whose  property  is  not  yet  valued  the  necessity  of 
promptly  supplying  the  data  requested  by  the  Bureau. 

Referring  briefly  to  changes  in  the  law,  among  those  sug- 
gested might  be  listed  depletion  as  a  percentage  of  income 
rather  than  depletion  on  unit  cost. 

The  regulations  prescribe  how  the  taxpayer  shall  derive  the 
unit  of  depletion  in  order  to  determine  the  deductions  from  in- 
come. It  does  not  suggest  a  percentage  of  income  as  a  depletion 
deduction,  and  I  understand  there  is  doubt  as  to  the  present 
law  permitting  a  regulation  prescribing  such  a  method. 
Though  it  may  have  no  foundation  in  law,  and  to  a  great  many 
not  sound  in  principle,  it  nevertheless  appeals  strongly  to  me, 
and  I  believe  it  has  considerable  merit. 

What  Is  a  Fair  Market-Value? 

Where  a  property  has  been  purchased  for  cash,  or  where 
this  value  may  be  ascertained  by  the  sales  of  similar  property 
on  a  normal  market,  or  can  be  fairly  determined  by  the  prevail- 
ing royalties  or  rentals  of  similar  property  during  a  normal 
period,  these  transactions  probably  establish  the  fair  market- 
value.  Sales  of  similar  property  during  periods  of  depression 
or  boom  periods  do  not  fairly  nor  equitably  determine  a  basis 
of  valuation  that  results  in  a  reasonable  depletion  when  you 
apply  the  unit  method,  yet  said  sales  value  may  reflect  the  fair 
market  value  of  the  taxpayer's  property  at  the  specified  date. 

Properties  that  have  a  history,  with  assured  orebodies,  so 
that  the  future  spread  of  profits  can  be  determined  with  suffi- 
cient accuracy,  may  permit  a  willing  buyer  and  a  willing  seller 
to  agree  upon  the  purchase-price,  and  yet  the  unit  method  of 
depletion  might  not  accurately  measure  the  actual  depletion  of 
capital-value  sustained  during  the  future  operation  of  the 
mine. 

An  Example  of  Depletion 

To  illustrate :  Suppose  we  have  a  mine  with  1,000,000  tons 
of  ore  in  1920;  that  we  can  foresee  the  economic  conditions 


676  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

that  will  prevail  during  the  next  10  years,  and  can  ascertain 
definitely  that  in  1921  to  1923  the  operating  profits  will  be  $1  a 
ton,  from  1923  to  1926  we  can  make  $4  a  ton  profit,  from  1926 
to  1927  $2  a  ton  profit,  and  from  1927  to  1930  $1  a  ton  profit, 
or  a  total  of  $2,000,000  operating  earnings.  Let  us  further 
assume  that  conditions  are  such  that  we  must  mine  at  the  rate 
of  100,000  tons  annually  and  that  we  had  paid  $1,000,000  for 
the  mine.  Would  we  deplete  the  mine  at  $1  a  ton  annually,  or  on 
the  basis  of  50  per  cent,  of  the  profits  ?  I  think  the  depletion 
account  kept  on  a  basis  that  would  represent  the  ratio  of  cost 
to  known  value  of  ore  reserves,  namely,  on  a  percentage  of 
profits  basis,  would  more  accurately  measure  the  true  deple- 
tion. The  fair  market-value,  as  determined  by  the  present- 
value  method,  may  be  a  close  approximation  of  the  truth,  but 
a  depletion  deduction  from  income,  based  upon  a  percentage 
that  comprehends  the  relationship  of  cost  and  earnings,  or  the 
anticipated  spread  of  profits  that  was  used  in  the  calculation 
for  valuation,  more  accurately  expresses  the  true  depletion  that 
the  ore  reserves  suffer  annually.  In  the  illustration  used  above, 
whether  you  take  50  per  cent,  of  your  income  as  an  annual 
deduction  for  depletion,  or  deplete  on  a  unit  method  basis  of 
$1  per  ton,  you  obtain  $1,000,000  of  capital-value  through  de- 
pletion deductions  during  the  10  years.  But  as  you  did  not  sus- 
tain like  depletion  annually,  would  it  not  have  been  more  logical 
to  have  taken  depletion  on  actual  amounts  sustained,  or  50  per 
cent,  of  the  profits  ?  If  it  were  logical  in  this  case,  .it  seems  to 
me  it  would  be  still  more  so  where  the  ore  reserves,  cost  of  pro- 
duction and  sales  price  of  metals  are  but  an  approximation. 

The  percentage  of  income  as  depletion  deduction  will  return 
to  the  taxpayer  a  much  closer  approximation  of  the  intrinsic 
value  of  the  property  than  a  unit  method  of  depletion  would, 
and  in  any  appraisal  method  the  closer  the  fair  market  value 
approaches  the  intrinsic  value,  the  more  accurate  was  the  ap- 
praisal. Likewise,  as  the  percentage  method  of  depletion  more 
closely  approaches  the  true  depletion,  to  that  extent  does  the 
true  depletion  approach  the  reasonable  depletion  mentioned 
in  the  law. 


VALUATION   OF  OIL-LANDS  677 

EFFECT  OF  REVENUE  ACT  OF  1918  ON  METHODS  OF 
VALUATION  OF  OIL-LANDS 

By  C.  A.  FISHER. 

Widespread  dissatisfaction  has  been  expressed  with  the 
Revenue  Act  of  1918,  particularly  the  Excess  Profits  Tax  pro- 
vision, and  with  our  present  system  of  Federal  taxation  in 
general,  mainly  on  the  grounds  of  its  inequities,  difficulty  of 
administration,  and  damaging  effect  on  the  expansion  of  in- 
dustry. There  is  great  need  for  radical  revision  of  the  present 
system  along  sound  and  rational  lines,  which  it  is  hoped  will 
take  place  during  the  next  session  of  Congress.  The  laws  now 
in  force,  with  their  exacting  provisions,  have  had  certain  ad- 
vantageous effects  in  the  matter  of  keeping  records  by  the  oil 
operator,  and  on  methods  of  estimating  future  oil  reserves, 
which  are  believed  to  be  both  timely  and  far-reaching  in  their 
bearing  on  the  production  of  petroleum. 

Allowances  for  Depletion 

Under  the  present  Federal  tax  laws,  as  applied  to  the  oil 
producer,  every  claim  for  deduction  allowance  on  account  of 
depletion  which  the  taxpayer  sets  up  must  be  accompanied  by 
complete  and  detailed  information  concerning  geologic  condi- 
tions, thickness  of  sand,  history  and  present  status  of  develop- 
ment, operating  conditions,  records  of  production,  and  market 
price  of  oil,  together  with  other  data  of  a  general  character 
upon  which  the  estimate  of  the  oil  reserves  and  the  value  of 
the  property  must  be  based. 

The  far-reaching  requirements  of  the  Revenue  Act  of  1918 
were  early  recognized  by  the  Commissioner  of  Internal  Reve- 
nue, and  a  new  department,  known  as  the  Natural  Resources 
Subdivision,  was  created  for  the  purpose  of  collecting  and 
making  a  systematic  study  of  data  relating  to  oil  deposits  and 
other  natural  resources  throughout  the  country,  for  use  in 
administering  the  tax  law  as  applied  to  these  conditions.  Mr. 
Ralph  Arnold  was  placed  in  charge  of  the  oil  and  gas  section 
of  this  new  Department,  and  directed  to  call  on  petroleum 
engineers  for  assistance. 


678  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

Detailed  Study  of  Oil-fields 

The  ultimate  object  of  this  movement,  as  applied  to  oil  and 
gas,  was  to  make  a  detailed  study  of  all  oil-field  information 
thus  collected,  in  the  belief  that  by  the  thorough  analysis  of 
such  a  large  accumulation  of  information  the  accuracy  of  the 
present  methods  of  estimating  oil  reserves  could  be  tested  and 
confirmed  or,  failing  in  this,  that  new,  more  accurate  and  more 
generally  applicable  methods  of  appraisal  might  be  devised.  It 
was  generally  believed  by  the  engineers  engaged  in  this  work 
that  the  recovery  of  oil  was  controlled  by  scientific  laws,  and 
when  enough  facts  were  known,  these  laws  would  make  them- 
selves manifest.  It  was  the  intention  of  the  Commissioner 
that,  when  the  investigation  was  completed,  a  manual  could  be 
published  for  the  oil  and  gas  industry  containing  the  results 
of  the  enquiry  and  suggesting  methods  of  procedure,  which 
might  assist  the  taxpayer  to  prepare  his  Federal  tax  return 
correctly  and  expeditiously. 

This  work  was  undertaken  by  an  experienced  corps  of  geolo- 
gists, technicians,  and  engineers,  carefully  selected  with  re- 
spect to  their  fitness  for  the  work  and  drawn  from  all  the 
larger  oil-producing  fields.  The  country  was  divided  into 
seven  districts  for  this  purpose,  and  regional  supervising  engi- 
neers were  selected  for  each.  These  engineers  were  each  sup- 
plied with  several  assistants  who  were  also  familiar  with  the 
local  conditions  in  their  respective  districts,  and  a  general  can- 
vass of  the  oil-fields  of  the  country  was  begun.  The  object  of 
this  investigation,  as  stated  above,  was  to  furnish  a  basis  for 
arriving  at  valuation  and  depletion  deductions  in  connection 
with  tax  returns  made  on  oil  and  gas  properties.  Owing  to  the 
fact  that  the  Bureau  of  Internal  Revenue  regarded  these  sub- 
jects of  great  importance,  a  most  careful  inquiry  was  insti- 
tuted. Production  records  of  thousands  of  individual  wells 
and  properties,  as  well  as  a  large  amount  of  general  statistical 
data,  were  collected.  The  productions  were  tabulated  and 
classified.  This  investigation  resulted  in  more  information 
concerning  oil-field  operation  and  production  being  collected 
than  had  probably  ever  been  brought  together  before. 

Recoverable  Oil  in  a  Property 

An  estimate  of  the  amount  of  oil  that  a  well  might  yield  dur- 
ing its  productive  life,  or  the  amount  of  recoverable  oil  under- 


VALUATION  OF  OIL-LANDS  679 

lying  a  property,  was  formerly  regarded  by  operators  and 
oil-men  generally  as  little  better  than  a  guess ;  or,  as  almost 
unsolvable.  However,  during  the  past  few  years,  petroleum 
engineers  have  made  substantial  progress  along  this  line,  and 
their  scientific  study  of  the  various  factors  affecting  the  prob- 
lem has  disclosed  a  reasonably  accurate  solution,  based  on 
production  records  and  past  history  of  a  well  or  number  of 
wells. 

The  methods  generally  employed  for  estimating  the  quan- 
tity of  oil  in  the  ground  are  the  so-called  saturation  and  pro- 
ductiqn-curve  method,  also  the  appraisal-curve  method  which, 
like  the  latter,  is  based  on  past  yields.  These  methods  are  not 
closely  comparable,  the  one  being  used  to  ascertain  the  total 
quantity  of  oil  in  the  ground,  and  the  other  the  quantity  of 
recoverable  oil.  They  also  have  separate  application.  The 
saturation  method  may  be  used  to  ascertain  the  total  quantity 
of  oil  and  gas  in  an  undrilled  area,  while  the  production-curve 
method  is  mainly  applicable  to  a  partly-developed  field  for 
ascertaining  the  quantity  of  recoverable  oil.  Briefly,  the  satu- 
ration method  is  based  on  the  calculation  of  the  porosity  of  the 
oil-bearing  sand';  that  is,  the  factors  involved  are  the  degree  of 
porosity,  thickness,  extent,  and  saturation  of  the  producing 
sand.  The  first  three  of  these  factors  are  usually  susceptible 
of  determination  with  a  fair  degree  of  accuracy,  but  the  degree 
of  saturation  and  the  percentage  of  the  total  amount  of  oil  that 
can  be  recovered  are  questions  which  are  very  difficult,  if  not 
impossible  to  answer,  and  have  often  led  in  the  past  to  erro- 
neous appraisements.  This  method,  formerly  in  general  use, 
is  now  seldom  employed,  owing  to  the  many  uncertain  factors 
involved.  It  should  not  be  used  when  any  other  method  is 
available. 

Only  20  Per  Cent,  of  Available  Oil  Recovered 

Formerly  the  percentage  of  recoverable  oil  to  the  total  oil- 
content  of  a  sand  was  thought  to  be  much  larger  than  scientific 
study  now  indicates  to  be  the  case;  in  fact,  it  is  now  held  by 
authorities  on  this  subject  that  perhaps  as  low  as  20%  of  the 
total  oil-content  of  a  sand  is  often  recovered  by  present 
methods. 

The  production-curve  method,  as  the  name  implies,  is  based 
entirely  on  records  of  production  of  wells.  By  it  the  necessity 


680  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

of  estimating  the  percentage  of  oil  recoverable  is  eliminated, 
as  past  production  is  an  index  of  extractable  rather  than  total 
oil-content.  In  applying  this  method,  the  yield  of  the  well  for 
time-periods  is  plotted  extending  over  the  entire  time  the  well 
has  produced.  The  production  curve  thus  obtained  is  then 
projected  to  the  point  of  economic  exhaustion.  Future  pro- 
duction is  then  calculated  from  the  projected  part  of  the  curve. 
Experience  has  shown  that  by  plotting  thousands  of  decline 
curves  the  relationship  between  the  production  for  a  number 
of  succeeding  years  is  such,  when  plotted,  as  to  approach 
closely  a  symmetrical  curve,  which,  when  extended  in  accord- 
ance with  its  symmetry,  will  constitute  a  reasonably  reliable 
basis  for  calculating  the  future  production  of  a  well.  The 
symmetry  of  the  curve  of  the  past  production  of  a  well,  which, 
when  projected,  is  relied  upon  to  indicate  the  future  output,  is 
not  accidental,  but  is  the  result  of  underlying  natural  laws  con- 
trolling the  expulsion  of  oil  from  the  producing  sand.  It  is 
obvious  that  the  above  method  requires  a  record  of  several 
years'  production  before  a  reliable  estimate  can  be  made  of  the 
future  yield  of  the  well,  so  that  it  is  only  directly  applicable  to 
wells  that  have  yielded  for  a  certain  part  of  'their  productive 
life. 

The  appraisal-curve  method  is  based  on  the  relation  existing 
between  the  first  years'  output  of  the  well,  and  the  amount  that 
it  will  ultimately  yield.  This  curve  is  built  up  from  records  of 
individual  wells  in  a  given  district,  and  then  applied  to  younger 
wells  in  the  same  or  similar  districts,  whose  productive  life  is 
not  yet  sufficient  to  make  a  curve  that  can  safely  be  projected 
for  estimating  their  future  yield.  This  method  permits  of  not 
only  the  use  of  the  first  years'  production  of  a  well  to  determine 
its  yield,  but  the  most  recent  years'  production  can  be  used  with 
equal  safety.  This  fact  is  based  on  a  conclusion  for  which, 
according  to  its  authors — Messrs.  Lewis  and  Beal — there  ap- 
pears abundant  satisfactory  proof;  that  is,  "if  two  wells 
under  similar  conditions  produce  equal  amounts  during  any 
given  year,  the  amounts  they  will  produce  thereafter,  on  the 
average,  will  be  approximately  equal  regardless  of  their  ages." 

Calculation  of  Oil  Reserves 

When  the  Manual  for  the  Oil  and  Gas  Industry  was  com- 
pleted and  issued  to  the  oil  operator  by  the  Commissioner,  a 


VALUATION  OF  OIL-LANDS  681 

general  application  of  the  method  of  calculating  underground 
reserves,  which  the  Department  had  adopted  for  the  appraisal 
of  oil-lands,  was  made  by  the  different  oil  companies.  Need- 
less to  say  the  method  was  not  found  to  be  applicable  to  all 
cases.  In  fields  where  unusual  conditions  were  found,  its  ap- 
plication led  to  erroneous  and  unreliable  results.  However, 
where  conditions  were  normal  or  fairly  uniform,  the  produc- 
tion-curve method,  or  one  of  its  related  forms  for  estimating 
future  oil  reserves,  was  found  to  apply  and  give  results  that 
could  be  relied  upon. 

At  the  present  time  there  are  few  large  producing  oil  com- 
panies in  the  United  States  who  are  not,  through  their  engi- 
neering departments,  employing  the  production-curve  method 
in  some  one  of  its  modified  forms  to  arrive  at  the  oil  reserves 
underlying  their  properties  for  purposes  of  taxation.  These 
methods  are  being  applied  not  only  for  tax  consideration,  but 
are  coming  more  and  more  to  be  used  in  all  transactions  where 
valuation  of  petroleum  lands  is  involved.  The  security  depart- 
ments of  the  various  States,  which  have  enacted  blue-sky  laws, 
have  also  adopted  this  method  for  determining  values  of  oil- 
lands. 

Source  of  Future  Oil  Supply 

The  oil  that  this  country  will  produce  in  the  future  must 
necessarily  come  from  three  sources,  namely,  the  discovery  of 
new  fields,  the  distillation  of  oil-shales,  and  the  stimulation  of 
fields  already  discovered.  To  increase  the  supply  by  the  dis- 
covery of  new  fields  is  growing  more  and  more  difficult;  the 
distillation  of  oil-shales  awaits  the  discovery  and  perfection  of 
mechanical  processes  to  put  it  on  a  commercial  basis ;  so  that 
perhaps  the  most  immediate  source  of  increasing  our  domestic 
production  lies  in  an  increase  in  the  percentage  of  recovery 
from  our  present  producing  fields.  Perhaps  one  of  the  most 
important  branches  of  petroleum  engineering  for  the  future  is 
what  is  known  as  "petroleum  production  engineering."  Such 
engineering  calls  for  a  thorough  familiarity  with  drilling  and 
general  conditions,  also  an  intimate,  continuous  and  analytical 
study  of  individual  wells  and  their  daily  production.  Oil  com- 
panies more  and  more  appreciate  the  importance  of  this  line  of 
investigation.  One  need  only  to  examine  casually  the  field- 


682  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

production  curve  of  an  operating  company  to  detect  the  time 
when  changes  in  field  management  took  place,  such  changes 
being  indicated  by  the  sudden  increase  or  falling  off  of  field 
production.  The  production  man  of  the  future  will  be  the  one 
who  keeps  a  daily  check  on  the  mechanical  conditions  and  gen- 
eral behavior  of  every  well  under  his  supervision,  and  who  is 
able  to  detect  quickly  and  suggest  a  remedy  for  any  cause  re- 
tarding production.  The  service  that  will  be  required  of  the 
geologist  or  petroleum  engineer  in  general  in  the  future  will  be 
not  only  to  find  new  oil-fields  for  the  operator,  but  to  increase 
and  maintain  the  production  of  the  one  he  already  owns.  As 
the  number  of  new  fields  brought  in  decreases,  our  supply  must 
necessarily  be  obtained  from  an  increasing  number  of  declining 
fields,  which  will  require  the  constant  vigilance  of  the  pe- 
troleum production  engineer  to  maintain  their  maximum  yield. 

Work  of  the  Bureau  of  Mines 

The  U.  S.  Bureau  of  Mines  has  not  been  unmindful  of  this 
line  of  work,  and  for  the  past  two  years  has  been  co-operating 
with  oil  companies  in  many  of  the  larger  fields  in  maintaining 
a  corps  of  production  engineers  whose  business  it  is  to  make  a 
careful  scientific  study  of  all  the  factors  affecting  production, 
especially  of  the  mechanical  conditions  and  state  of  efficiency 
of  the  wells  under  their  supervision.  This  work  has  already 
proved  its  value  by  materially  increasing  production,  but 
greater  appreciation  is  in  store  for  it.  As  work  of  this  char- 
acter can  only  be  done  effectively  where  the  most  complete  and 
detailed  records  of  production  of  individual  wells  is  kept  and 
available,  it  will  readily  be  seen  that  the  present  tendency  in- 
spired by  tax  requirements  towards  keeping  better  records  of 
development  and  production  in  the  different  oil-fields  is  paving 
the  way  for  new  and  improved  methods  of  field  operation. 

In  summing  up  the  more  important  effects  that  the  present 
Revenue  Law  has  had  on  the  oil  producer  at  large,  the  follow- 
ing are  noteworthy :  It  has  pointed  out  the  defects  and  inade- 
quacies of  production  records  as  they  have  been  kept  by  oil 
companies  in  the  past,  and  has  impressed  on  the  oil  operator 
the  advantage  of  keeping  more  complete  records  in  the  future. 
Such  a  course  will  enable  the  producing  companies  to  sum- 
marize, at  any  time,  the  existing  knowledge  concerning  the 


VALUATION  OF  OIL-LANDS  683 

extent  of  their  deposits  and  thus  enable  them  to  formulate  a 
more  rational  business  policy.  In  this  way  they  will  eliminate, 
to  a  certain  extent,  some  of  the  speculative  features  of  the  oil- 
producing  business. 

Results  of  the  Revenue  Act  on  the  Oil  Industry 

In  conclusion,  it  must  be  admitted  that  the  exacting  require- 
ments of  the  Revenue  Act  of  1918,  burdensome  as  they  have 
been,  have  nevertheless  stimulated  a  country-wide  study  of  oil- 
field operating  conditions,  and  have  been  directly  responsible 
for  the  assemblying  of  a  large  amount  of  important  informa- 
tion. This  will  certainly  prove  valuable  in  paving  the  way  for 
new  and  more  efficient  methods  of  oil-field  operation,  which 
the  increasing  demand  for  oil  and  the  decreasing  supply  is 
forcing  upon  the  industry.  It  is  also  responsible,  in  a  large 
measure,  for  better  and  more  reliable  methods  of  oil-field  ap- 
praisement. While  these  methods  at  present  are  not  all  that 
could  be  desired,  and  more  complete  records  will  doubtless 
permit  of  improvements  and  refinements,  it  must  be  regarded 
as  a  movement  in  the  right  direction,  which  will  untimately 
enable  the  oil  operator  to  make  closer  estimates  of  future  oil 
reserves. 


PROCEDURE  UNDER  THE  FEDERAL  REVENUE  LAW. 

By  ROBERT  N.  MILLER. 

The  subject  of  my  address  is  the  question  of  modus  of 
method,  rather  than  of  substance.  The  part  of  the  program 
this  falls  into  is  the  question  of  the  relation  of  the  taxpayer 
and  the  Bureau. 

There  are  two  sides  to  every  matter  that  comes  up  for  pres- 
entation before  the  Department.  One  is,  What  is  the  exact, 
theoretical  answer  to  this  question?  Having  decided  that, 
there  the  taxpayer  must  decide  another  question — How  can  he 
present  the  problem  to  the  man  in  the  Bureau  who  must 
decide  it? 

Difficulties  of  the  Department 

I  am  not  connected  with  the  Bureau  of  Internal  Revenue,  not 
for  nine  or  ten  months.  Any  sympathy  that  I  have  with  the 


684  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

viewpoint  of  the  Department  does  not  arise  from  any  obliga- 
tion to  defend  it,  or  any  obligation  to  take  care  of  it ;  it  arises 
from  my  knowledge  of  the  conditions  confronting  it ;  from  the 
clear  conviction  in  my  mind  that  there  is  hardly  one  of  these 
questions  which  has  an  actual  yes  or  no  answer  to  it;  also 
which  of  several  alternatives  is  adopted  as  the  working  rule — 
and  there  must  be  one — you  can  pull  it  to  pieces.  If  the  De- 
partment, for  instance,  had  taken  the  view  that  Mr.  Gower 
advocated — and  it.  is  a  view  I  see  a  great  deal  in — there  would 
be  some  people  dissecting  tnat,  and  partly  successful.  The 
regrettable  thing  about  this  is  that  it  is  lacking  in  certainty. 
This  uncertainty  in  administration  of  law  is  undoubtedly  due 
to  the  difficulty  of  the  problem.  Congress  has  not  yet  given  to 
the  Commissioner  of  Internal  Revenue  or  anybody  else  the 
power  to  decide  what  tax  is  fair  for  each  taxpayer.  It  has 
given  him  the  task  of  administering  the  law,  which,  with  few 
exceptions,  is  laid  down  unchangeably.  If  Congress  had  given 
the  incumbent  of  that  office  the  opportunity  of  being  a  despot 
of  that  kind,  this  would  not  have  been  a  very  enviable  position. 
To  train  the  force  at  Washington  to  deal  with  many  millions  of 
highly-involved  tax  returns  each  year  is,  in  itself,  a  tremen- 
dous task.  The  task  of  educating  the  revenue  agents,  who 
necessarily  work  in  small  groups  all  over  the  country,  and 
keeping  these  field  agents  up  to  date  is  very  difficult. 

Taking  the  situation  as  it  is,  rather  than  as  it  would  be 
under  different  laws  or  lower  tax  rates,  the  wise  taxpayer,  in 
dealing  with  the  Department,  will  seek,  first  of  all,  to  under- 
stand sympathetically  the  theory  upon  which  the  Department 
is  working. 

Taxpayers  Must  Present  Full  Details 

However  well  informed  the  Department  is  concerning  the 
general  theory  and  the  particular  facts  of  any  case,  the  tax- 
payer, in  presenting  his  question,  ought  to  know  more  about 
the  theory  of  the  law  as  applied  to  his  case,  and  know  more 
about  the  material  facts  of  his  case,  than  he  expects  the  De- 
partment to  at  the  outset.  If  the  question  depends  on  your 
statutory  income  and  your  capital,  he  ought  to  know  more 
about  it  than  you,  and  the  Department  welcomes  such  knowl- 
edge just  as  a  well-qualified  judge  expects  lawyers  to  know  in 


THE  FEDERAL  REVENUE  LAW  685 

any  case.  We  must  pick  out  these  facts  for  them.  Specific  ex- 
amples for  relief  will  be  found  under  Section  327.  Of  the 
thousand  facts  peculiar  to  your  business  there  would  be  per- 
haps one  hundred  that  would  be  material  as  possibly  entitling 
you  to  the  particular  relief  you  are  after.  The  Government 
undoubtedly  honestly  desires  to  give  you  what  you  ought  to 
have.  It  will  do  all  it  can  to  dig  up  facts  material  in  your  case. 
This  is  true — I  know  it  is  true — but  it  is  hardly  reasonable  to 
rely  upon  the  Government  entirely  when  tiie  law  has  put  the 
burden  on  you  to  do  this  long  job  of  finding  out  the  particular 
facts  that  are  material  in  your  particular  case.  The  practical 
truth  of  this  is  easily  realized  when  you  know  the  man  auditing 
your  case  has  probably  piled  up  on  his  desk  a  lot  of  other  cases 
which  are  pressing  for  action.  You  must  help.  An  analysis 
of  the  particular  issues  involved  is  the  biggest  help  we  can  give 
to  the  Department,  and  to  our  own  interest  also. 

Favorable  Answers  Seldom  Given 

Another  thing  we  realize  in  a  general  way,  but  ought  to 
realize  very  sharply,  is  that  the  Bureau  cannot  afford  to  give 
any  taxpayer  a  favorable  answer,  however  much  it  wants  to, 
and  however  just  it  would  be  to  give  such,  unless  that  fits  in 
with  a  general  rule  that  the  Bureau  has  had  to  establish.  Those 
general  rules  being  based  on  a  large  number  of  separate  cases, 
the  Government  has  been  driven  to  that  rule,  however  unsatis- 
factory in  some  cases.  Every  principle  as  consistently  carried 
out  hurts  some  taxpayers  and  helps  some  others.  That  is  a  pe- 
culiar thing  about  taxation.  There  is  a  case  pending  in 
Newark,  N.  J.,  where  a  taxpayer  happens  to  be  contending  for 
something  which,  if  he  succeeds,  is  likely  to  give  the  Govern- 
ment in  other  cases  many  times  the  amount  involved  in  that 
particular  case.  A  simple  example  is  the  conflict  between  tax- 
payers who  are  not  much  interested  in  invested  capital  and 
anxious  to  get  a  lot  of  expenses,  and  want  a  pull  with  reference 
to  certain  items  to  get  them  into  the  taxable  column,  and  the 
other  taxpayer  who  is  much  interested  in  invested  capital  and 
excess-profits  tax  and  needs  those  things  in  his  invested  capital. 
This  has  a  bearing  on  this  question  that  all  of  us  ask  right  off — 
what  will  happen  with  this  change  of  administration  ?  Won't 
there  be  a  broadening  of  the  view  now  that  a  different  party  is 


686  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

in  power?  The  practical  aspect  of  that  question  seems  to  be 
this:  It  is  always  a  question  what  is  the  "broad  view."  Here 
is  the  poor  Commissioner,  with  fifteen  people  sitting  like 
blackbirds  waiting  to  come  up  to  him — a  delegation  of  people 
who  say,  this  principle  is  absolutely  wrong  that  you  have  tried 
to  set  up,  and  they  will  argue  half  an  hour  and  sound  pretty 
convincing;  and  then  another  group  will  come  in,  another  lot 
of  taxpayers,  and  say,  "We  hear  you  are  thinking  about  chang- 
ing that  ruling.  To  change  that  would  be  to  go  back  on  all  the 
decisions  of  the  courts."  Each  one  will  cite  half  a  dozen  de- 
cisions, and  some  language  in  other  decisions,  showing  he  is 
right.  Now,  a  Commissioner  who  meets  with  that  obvious 
difference  of  personal  interest  is  going  to  settle  down  after  a 
while  to  the  feeling  that  he  had  best  get  the  best  advice  he  can 
and  realize  that  he  must  make  about  half  of  the  taxpayers 
angry  anyhow ;  it  is  only  a  question  of  which  half.  That  ques- 
tion of  theory  comes  up  over  and  over  again.  Of  course,  1 
have  made  that  rather  broad:  there  are  some  questions  that 
are  favorable  to  a  comparatively  small  group  of  taxpayers, 
and  adverse  to  a  comparatively  large  one.  I  was  trying  to 
bring  out  the  principle. 

Influence  Will  Not  Help 

In  dealing  with  the  Internal  Revenue  Bureau  I  will  say  this 
(most  of  you  know  it)  :  there  are  thousands  of  people  all  over 
the  country  who  have  a  vague  idea  that  to  get  anything  in 
Washington  the  way  to  do  is  to  get  somebody  powerful  to 
introduce  you — the  old-fashioned  notion  that  Washington  is 
the  place  where  influence  is  the  thing  that  counts.  I  think  that 
there  is  no  doubt  what  the  fact  is  in  the  Bureau  of  Internal 
Revenue,  and  I  think  those  of  us  who  know  that  fact  by  expe- 
rience would  do  well  to  let  other  people  know  it.  The  real 
truth  is  this :  whatever  mistakes  that  Department  makes — and 
it  makes  a  lot  of  them,  I  made  a  lot  of  them  myself — anybody 
who  deals  with  the  responsible  heads  realizes  that  they  are 
trying  to  get  the  right  answer.  And  to  attempt  to- exert  in- 
fluence is  to  suggest  to  the  man  who  listens  to  you  that  your 
case  has  no  merits  at  all,  that  you  are  relying  on  influence 
instead  of  merit  in  your  case.  They  will  try  to  give  you  a 
square  deal  even  if  you  come  with  influence,  but  the  best  intro- 
duction that  you  can  have  is  to  come  in  there  relying  on  the 


THE  FEDERAL  REVENUE  LAW  687 

justice  of  your  case,  and  knowing  your  own  case,  having 
analyzed  it  to  find  out  what  are  the  real  points  and  presenting 
those  facts ;  that  is  the  real  and  perfect  introduction,  whether 
they  ever  saw  you  before  or  not. 

Many  Court  Decisions  on  Taxes 

One  interesting  thing  is  the  constant  effect  of  court  decisions 
on  these  questions.  Court  decisions  on  income-tax  questions, 
including  excise  taxes,  are  being  rendered  from  time  to  time. 
There  have  been  63  or  64  cases  decided  in  the  last  12  months ; 
altogether  there  are  about  206  income-tax  decisions.  Of  those 
decided  during  last  year  (1919)  seventeen  were  under  the  cor- 
poration excise-tax  law,  involving  general  principles  of  taxa- 
tion ;  40  related  to  income  tax,  and  3  to  excess  profits ;  I  might 
say  4,  but  the  fourth  was  a  State  decision  which  does  not  really 
give  much  light  on  the  question.  It  pays  to  analyze  those 
questions  and  see  what  is  in  the  cases  as  decided,  although  they 
are  certainly  not  conclusive.  The  Department  is  interested  in 
knowing  the  taxpayer's  analysis  of  the  decisions  as  they  affect 
his  case. 

The  Department  has  provided  a  very  careful  way  for  you  to 
be  heard.  There  is  the  A-2  letter  which  goes  out,  stating  you 
will  be  assessed  a  certain  sum,  but  a  hearing  is  provided  for, 
and  if  you  are  not  satisfied  with  that  hearing  you  can  appeal  to 
the  Committee  on  Appeal  and  Review.  The  Department 
planned  for  an  appeal  because  it  realized  the  necessity  of  such. 

De-centralization  and  Substitute  for  Excess-Profits  Tax 

We  all  know  too  many  relatively  elementary  questions  have 
to  be  settled  at  Washington,  and  the  trouble  goes  back  to  what 
we  were  discussing  in  connection  with  our  bill.  With  the 
Government  short  of  money  to  build  up  an  adequate  depart- 
ment at  Washington,  it  becomes  hard  indeed  to  keep  well- 
trained  men  out  in  the  field,  which  is  essential  if  there  is  to  be 
de-centralization. 

The  whole  problem  of  trying  to  solve  the  question  of  taxes 
can  only  be  done  by  having  a  less  aggregate  tax  to  raise.  The 
excess-profits  tax  is  bad,  and  we  ought  to  get  rid  of  it,  but  we 
must  get  a  substitute  at  once,  because  of  the  amount  of  money 
it  takes  to  run  the  Government.  The  best  thing  any  of  us  can 
do  is  to  find  a  plan  to  cut  down  the  Government  expenditures, 
so  that  the  Government  will  not  have  to  take  away  so  much 
from  the  people  by  any  form  of  taxation. 


PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 


STANDARDIZATION 


ORIGINAL  PAPERS  PRESENTED  AT  THE  TWENTY-THIRD 
ANNUAL  CONVENTION  OF  THE  AMERICAN  MIN- 
ING CONGRESS,  DENVER,  COL.,  NOVEMBER 
15-20,  1920— STANDARDIZATION 
SECTION 

JOINT  REPORT  OF  SUB-COMMITTEES  ON  STANDARDIZA- 
TION OF  UNDERGROUND  POWER  TRANSMISSION  AND 
STANDARDIZATION  OF  POWER  EQUIPMENT 

Submitted  by  K.  A.  PAULY  and  A.  B.  RISER,  Chairmen  of  the  Sub-Com- 
mittees on  Power  Equipment  and  Underground  Transmission 

On  account  of  the  intimate  relationship  between  power 
transmission  and  power  equipment,  workable  standards  in 
these  two  fields  can  be  developed  only  through  closest  co-oper- 
ation between  those  interested  in  these  two  phases  of  the 
general  problem  of  standardization  of  mining  equipment. 
Appreciation  of  this  fact  from  the  first,  lead  the  Chairmen  of 
Sub-Committees  No.  3  (Underground  Power  Transmission) 
and  No.  7  (Power  Equipment)  to  hold  their  meetings  jointly. 
Not  only  did  this  procedure  permit  of  the  closest  co-operation 
between  the  two  Committees,  but  gave  each  the  benefit  of  the 
experience  of  the  members  of  both. 

We  wish  here  to  express  our  appreciation  of  the  keen  inter- 
est shown  by  the  members  of  our  Sub-Committees  and  the 
valuable  assistance  which  they  afforded  us  by  their  construct- 
ive suggestions  concerning  many  of  the  perplexing  problems. 
We  are  also  indebted  to  the  United  States  Bureau  of  Mines 
for  providing  us  with  a  meeting-place  and  a  secretary  during 
our  meetings. 

Two  joint  meetings  were  held  at  Pittsburgh  on  May  20 
and  21,  and  October  19  and  20. 

Those  present  at  the  first  meeting  were:  Messrs.  R.  L. 
Kingsland,  R.  Kudlich  and  L.  D.  Ilsley,  representing  (K  P. 


UNDERGROUND  POWER   EQUIPMENT  689 

Hood,  Graham  Bright,  R.  W.  .Moore,  A.  L.  Nicht,  F.  L.  Stone, 
A.  B.  Riser,  Chairman  of  Sub-Committee  No.  3,  and  K.  A. 
Pauly,  Chairman  of  Sub-Committee  No.  7. 

Those  present  at  the  second  meeting  were:  Messrs.  R.  L. 
Kingsland,  R.  Kudlich  and  L.  D.  Ilsley,  representing  0.  P. 
Hood,  Graham  Bright,  A..J.  Nicht,  A.  B.  Riser  and  R.  A. 
Pauly. 

In  considering  the  problem  of  standardization,  we  have 
divided  it  into  two  parts — the  standardization  of  equipment, 
and  the  standardization  of  practice  in  the  installation  and 
operation  of  equipment. 

As  the  Electric  Power  Club  has  for  its  object  the  standard- 
ization of  the  capacities,  voltages,  speeds  and  essential  me- 
chanical features  of  electric  motors,  generators,  transformers, 
etc. ;  and  as  its  standards  are  accepted  throughout  the  coun- 
try, it  was  suggested  that  we  adopt  them  as  our  standards  of 
equipment.  It  was  also  suggested  that  the  standardization 
rules  of  the  American  Institute  of  Electrical  Engineers  be 
adopted  as  our  standards  of  technical  matters. 

With  the  standardization  of  equipment  disposed  of,  we 
devoted  our  time  and  attention  to  the  standardization  of  prac- 
tice. This  field  has  been  thoroughly  covered  by  the  Bureau 
of  Mines  in  its  Technical  Paper  No.  138,  entitled  'Suggested 
Rules  for  Installing  and  Using  Electrical  Equipment  in  Bitu- 
minous Coal  Mines/  and  these  were  taken  as  the  basis  of  our 
work.  Each  rule  was  thoroughly  discussed  and  revised  where 
it  seemed  advisable  to  do  so,  for  the  purpose  of  clarifying  it, 
or  making  it  conform  to  present-day  practice. 

The  rules  as  modified  at  our  first  meeting  were  sent  to  each 
member  of  both  Sub-Committees,  with  the  request  that  they 
act  as  chairmen  of  local  committees  and  obtain  suggestions 
as  to  further  modifications  from  the  engineers  in  their  respec- 
tive districts.  This  brought  many  valuable  suggestions  from 
the  districts  that  were  not  represented  at  the  Pittsburgh  meet- 
ing. 

The  suggestions  obtained  in  this  way  were  circularized  and 
thoroughly  discussed  at  our  second  meeting,  and  a  final  draft 
of  the  suggested  rules  made. 

It  has  been  impossible,  with  the  time  at  our  disposal,  to 
devote  as  much  attention  to  some  matters  as  we  would  like  to 


690  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

have  given  them  before  submitting  our  report,  but  it  is  felt 
that  the  best  results  can  be  accomplished  by  submitting  the 
rules  in  their  present  form. 

The  rules  as  they  appear  in  Technical  Paper  No.  138,  and 
as  modified  by  our  Committees,  cover  coal-mining  conditions, 
but  they  are  applicable  to  metal  mining  by  omitting  those 
paragraphs  that  apply  to  the  existence  of  gas  or  coal  dust  in 
explosive  mixtures. 

We  therefore  submit  the  following  as  the  joint  recommen- 
dations of  the  Sub-Committee  on  Underground  Power  Trans- 
mission and  on  Power  Equipment: 

That  the  standards  of  the  Electric  Power  Club  be  adopted 
to  our  standards  of  electrical  equipment : 

That  the  standardization  rules  of  the  American  Institute  of 
Electrical  Engineers  be  adopted  as  our  technical  standards; 
and 

That  the  following  rules  be  adopted  as  our  standards  of 
practice  in  the  installation  and  operation  of  transmission  and 
power  equipment : 

Basis  of  the  Rules 

Five  basic  measures  .for  safeguarding  the  use  of  electricity 
in  mines  are  as  follows : 

1.  Remove    the    contributory    causes    of    accidents    or 
danger. 

2.  Remove  from  the  vicinity  of  electric  apparatus  all 
elements  susceptible  to  the  influence  of  electricity. 

3.  Keep  the  electric  current  where  it  belongs,  if  possible. 
If  not,  limit  the  area  of  its  activity  by  protective 
devices. 

4.  Use  a  large  factor  of  safety  in  the  selection,  installa- 
tion and  inspection  of  equipment. 

5.  Have  full  control  of  the  movements  of  electrically 
driven  machines. 

Each  rule  that  is  given  in  this  report  is  proposed  as  neces- 
sary or  helpful  to  the  accomplishment  of  one  or  more  of  these 
measures. 


UNDERGROUND  POWER  EQUIPMENT  691 

Definitions  of  Terms  Used 

The  meanings  of  some  of  the  terms  and  expressions  as  used 
in  this  report  are  defined  below  in  order  to  avoid  confusion : 

Alive 

See  definition  of  "live."  - 
Approved 

This  term  means  accepted  as  suitable  by  a  competent  com- 
mittee, board  or  organization  designated  by  those  adopting 
the  rules. 

Authorized  Person 

A  person  appointed  or  permitted  by  the  official  designated 
by  the  State  mining  laws  as  the  one  in  charge  of  the  opera- 
tion of  the  mine  to  carry  out  certain  duties  incident  to  the 
generation,  transformation  and  distribution  or  use  of  electric 
energy  in  the  mine,  such  person  being  one  who  is  competent 
within  the  purpose  of  the  rule  in  which  the  term  is  used. 

Electric  System 

This  includes  all  electric  apparatus  pertaining  to  the  oper- 
ation of  the  mine,  and  under  the  control  of  the  mine  officials, 
which  is  connected  electrically  to  a  common  source  of  voltage 
or  which  is  installed  so  that  it  can  be  thus  connected. 

Grounded  Circuit 

A  circuit  that  is  permanently  grounded  at  one  or  more 
points. 

Grounding 

As  applied  to  any  object  used  in  connection  with  a  perma- 
nently grounded  electric  system,  this  term  means  connecting 
such  object  to  the  earth  in  such  a  way  that  a  path  of  low 
resistance  is  provided  between  the  object  and  the  perma- 
nently grounded  point  of  the  system.  A  connection  to  a  thor- 
oughly bonded  rail  is  an  example  of  a  good  ground  connection. 

Grounding,  as  applied  to  any  object  used  in  connection  with 
an  electric  system  that  is  not  provided  with  a  permanent 
ground,  means  making  connection  to  the  general  mass  of 


692  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

earth  in  such  a  manner  as  will  ensure  at  all  times  an  immedi- 
ate discharge  of  electrical  energy  without  danger. 

Ground  Return 

That  part  of  a  circuit  which  is  the  earth,  or  metallic  con- 
ductors intimately  associated  with  the  earth,  and  which  is 
practically  at  earth  potential  at  all  points,  is  a  ground  return. 
Live 

The  word  "live"  means  electrically  connected  to  a  source 
of  voltage  difference,  or  electrically  charged  so  as  to  have  a 
voltage  different  from  that  of  the  earth. 

Permissible  Equipment 

This  refers  to  any  equipment  that  is  listed  with  the  United 
States  Bureau  of  Mines  as  permissible  for  use  in  such  places 
as  containing  gas  or  coal  dust  in  explosive  mixtures. 

Portable  Electric  Lamps 

Electric  lamps  that  may  be  carried  about  while  lighted  are 
portable.  This  general  term  includes  lamps  operated  by 
batteries  and  lamps  connected  to  a  source  of  power  by  a 
flexible  conductor,  whose  length  limits  the  range  over  which 
the  lamp  may  be  used. 

Self-contained  Portable  Electric  Lamps 

Electric  lamps  that  are  operated  by  an  electric  battery, 
which  is  designed  to  be  carried  about  by  the  user  of  the  lamp, 
are  self-contained. 

Portable  Motors 

Motors  that  are  intended  for  service  here  and  there  as  occa- 
sion requires,  and  that  are  so  constructed  or  mounted  as  to 
facilitate  moving  them  from  place  to  place,  are  termed  port- 
able. 

Stationary  Motors 

All  motors  not  included  in  the  class  of  portable  motors  shall 
be  considered  as  stationary  motors. 

Potential 

The  words  "potential"  and  "voltage"  are  synonymous,  and 
mean  electric  pressure. 


UNDERGROUND  POWER   EQUIPMENT  693 

Difference  of  Potential 

This  expression  means  the  difference  in  electric  pressure 
existing  between  any  two  points  in  an  electric  system,  or 
between  any  point  of  such  a  system  and  the  earth,  as  deter- 
mined by  a  vpltmeter. 

Potential  of  a  Circuit 

The  potential  or  voltage  of  a  circuit,  machine,  or  any  piece 
of  electric  apparatus,  means  the  voltage  normally  existing 
between  the  conductors  of  such  circuit  or  the  terminals  of 
such  machine  or  appartus.  In  alternating  current  systems 
the  voltage  of  the  system  shall  be  that  indicated  by  a  volt- 
meter. 

(a)  Any  voltage  less  than  301  volts  shall  be  deemed  a 
low  voltage.    . 

(b)  Any  voltage  greater  than  301  volts,  but  less  than 
651  volts,  shall  be  deemed  medium  voltage. 

(c)  Any  voltage  in  excess  of  651  volts  shall  be  deemed 
a  high  voltage. 

Protected 

This  word  when  applied  to  the  current-carrying  parts  of 
an  electric  system,  means  that  accidental  contact  with  such 
parts  is  prevented  by  approved  guards. 

Shock-proof 

As  applied  to  the  current-carrying  parts  of  an  electric  sys- 
tem, excepting  trolley  wires,  this  term  is  taken  to  mean  that 
contact  with  such  parts  is  prevented  by  the  use  of  grounded 
metallic  coverings  or  sheaths. 

Generating  Station 

A  station  in  which  electric  geenrators  are  operated  by  prime 
movers. 

Sub-station 

A  station  in  which  the  current  is  changed  in  character  or 
voltage. 

Underground  Station 

A  place  underground  in  which  there  are  transformers, 
switchboards  or  electric  machines  other  than  portable  motors, 
or  any  one  of  them. 


694  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Switchboard 

The  essential  mounting  common  to  several  pieces  of  switch- 
gear  or  controlling  appliances. 

Voltage 

See  definition  of  "potential." 

DIVISION  1.— GENERAL  RULES 
Man  in  Charge  of  Electrical  Equipment 

1.  At  each  mine  where  electricity  is  used  underground, 
there  shall  be  in  charge  of  the  electrical  equipment  a  man 
fitted  for  his   position  by  ability,  training  and  experience. 
The  character  of  the  equipment  will  determine  the  qualifica- 
tions  of  the  mine  electrician,   and  he  shall  be  thoroughly 
familiar  with  the  operation  and  maintenance  of  the  equipment 
under  his  charge. 

Persons  Working  on  Electrical  Equipment 

2.  No  person  shall  be  allowed  to  work  on  or  with  electrical 
equipment  of  any  kind  unless  he  has  been  previously  instructed 
by  an  authorized  person  in  the  performance  of  his  duties. 

Construction  and  Rating  of  Apparatus  and  Relation  of  Capacity 
to  Duty 

3.  All  electrical  equipment  shall  be  rated  in  accordance 
with  the  current-standardization  rules  of  the  American  Insti- 
tute of  Electrical  Engineers. 

4.  The  rating  of  each  piece  of  electrical  equipment  shall 
be  stamped  on  it,   or  inscribed  on  a  metal  plate   suitably 
mounted  and  maintained  upon  the  equipment.     The  inscrip- 
tion on  the  plate  shall  indicate  whether  the  rating  is  for  con- 
tinuous or  intermittent  service,  and  shall  be  in  accordance 
with  the  name-plate  requirements  of  the  American  Institute 
of  Electrical  Engineers. 

5.  All  equipment  shall  be  operated  within  its  rated  capac- 
ity as  defined  by  the  standardization  rules  of  the  American 
Institute  of  Electrical  Engineers. 

Permissible  Voltages 

6.  High  voltages  may  be  used  for  transmission  purposes 
underground,  provided  that  such  circuits  are  carried  within 


UNDERGROUND  POWER   EQUIPMENT  695 


metallic  sheaths  or  coverings,  with  the  sheath  or  covering 
permanently  grounded.  This  voltage  may  be  applied  only  to 
transformers  or  to  motors  in  which  the  high-voltage  windings 
are  a  part  of  the  stationary  element.  Medium  or  low  voltage 
may  be  applied  to  all  electrical  equipment. 

Mechanical  Construction  of  Installation 

7.  Care  shall  be  taken  to  ensure  good  mechanical  construc- 
tion and  neat  workmanship  in  connection  with  all  wiring  and 
the  installation  of  equipment. 

Prevention  of  Accidental  Contact 

8.  Space  shall  be  provided  for  free  movement  where  regu- 
lar passing  is  required  or  permitted  around  all  unprotected 
parts  of  the  electric  system,  and  places  where  persons  must 
pass  close  to  or  adjust  permanently  installed  electrical  machin- 
ery shall  be  sufficiently  lighted. 

9.  The  standing  room  around  all  electrical  equipment  shall 
be  kept  as  dry  as  practicable.    At  any  place  where  it  is  neces- 
sary to  manipulate  or  adjust  medium  or  high-voltage  live 
equipment — including   switches,  motor  starters,    and    other 
controlling  appliances,   excepting  locomotives  and  machines 
that  are  moved  so  frequently  that  they  are  provided  with 
trailing  cables — there  shall  be  provided  and  available  an  in- 
sulated platform  or  mat,  which  may  be  of  a  form  and  char- 
acter most  in  keeping  with  the  circumstances  of  its  use,  and 
which  shall  be  not  less  effective  than  a  dry  board  3  feet  by  15 
inches  by  %  inch. 

10.  All  metallic   frames,   casings   and  coverings,   except 
those  of  mining  machines  and  drills,  that  may  become  alive, 
shall  be  permanently  grounded.*   All  metallic  pipe-lines,  1000 
feet  or  over  in  the  interior  of  the  mine,  and  all  pipe-lines  lead- 
ing outside  shall  be  bonded  to  the  return  at  ends  and  at 
intervals  not  exceeding  500  feet.     All  metallic  pipes  in  shafts 
shall  be  bonded  to  the  return  at  top  and  bottom  of  shafts. 

11.  Where  danger  exists  of  accidental  contact  with  wires 
carrying  electric  current,  the  wiring  shall  be  protected.     In 
haulage  roads  used  as  traveling  ways  the  wires  need  not  be 


*It  is  assumed  that  the  ordinary  conditions  of  operation  of  locomotives 
fulfill  the  requirement  of  this  rule. 


696 


PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 


protected,  if  a  traveling  way  of  approved  dimensions  is  pro- 
vided on  the  side  of  the  entry  opposite  from  the  wires.  Where 
wires  are  run  in  an  entry,  in  which  no  one  but  authorized  per- 
sons are  allowed  to  travel,  or  where  no  hazard  from  contact 
exists,  the  wires  need  not  be  protected. 

12.  Weather-proof  varnished  cloth,  rubber,  or  similar  in- 
sulation,  unless   inclosed   in   a   metallic   sheath,   when   used 
underground  will  not  be  considered  as  a  protection  against 
shock. 

13.  In  unfrequented  places  where  the  roof  is  likely  to  fall, 
all  electrical  conductors  shall   be  especially  protected  from 
injury  by  falling  roof. 

Carrying  Capacity  of  Conductors 

14.  The  carrying  capacity  of  insulated  conductors  of  dis- 
tributing circuits  shall  be  determined  by  reference  to  the  table 
of  carrying  capacities   laid   down  in  the  National  Electric 
Code.         ^ 

The  carrying  capacity  of  bare  conductors  shall  be  deter- 
mined by  reference  to  Table  1,  following: 


CURRENT-CARRYING   CAPACITY   OF    BARE 

USED  IN  MINES 


COPPER    CONDUCTORS 


Size  of 

con- 

Current 

Size  of 

Current 

Size  of 

Current 

ductor 

capacity 

conductor 

capacity 

conductor 

capacity 

B.  &S. 

gauge 

Amperes 

Circular  mils 

Amperes 

Circular  mils 

Amperes 

10 

80 

250,000 

690 

750,000 

1,520 

8 

105 

300,000 

790 

800,000 

1,590 

6 

145 

350,000 

880 

850,000 

1,660 

4 

210 

400,000 

965 

900,000 

1,730 

2 

280 

450,000 

1,050 

950,000 

1,800 

1 

320 

500,000 

1,140 

1,000,000 

1,870 

0 

375 

550,000 

1,215 

00 

435 

600,000 

1,285 

000 

525 

650,000 

1,370 

t 

..... 

0000 

C15 

700,000 

1,450 

Use  of  Permissible  Equipment 

15.  The  decision  as  to  where  and  when  permissible  equip- 
ment is  required  will  be  made  from  time  to  time  as  necessary 
by  the  properly  constituted  State  authority.  The  term  equip- 
ment as  here  used  includes  everything  in  the  electric  circuit. 

See  also  rules  14,  112,  124,  132,  136,  138,  140,  141,  144  and 
164. 


UNDERGROUND  POWER   EQUIPMENT  697 

Inspection  and  Maintenance 

16.  At  each  mine  where  electricity  is  used  underground, 
a  systematic  inspection  of  all  wiring  and  equipment  shall  be 
made  at  regular  intervals,  at  least  once  every  month.      A 
report  of  each  inspection  shall  be  made  by  the  mine  electrician 
or  inspector,  and  a  copy  of  this  report  shall  be  furnished  to 
the  man  legally  in  charge  of  the  operation  of  the  mine  and 
kept  on  file  at  the  mine.      The  report  shall  definitely  state 
the  condition  of  each  underground  station,  of  the  conductors 
and  controlling  appliances  of  each  main  and  branch,  power 
and  lighting  circuit,  and  of  the  motors  and  controlling  appli- 
ances of  each  locomotive,  mining  machine,  pump,  hoist,  or 
other  piece  of  electrical  apparatus  connected  to  the  electrical 
system  of  the  mine. 

Notices  and  Warnings 

17.  Caution  notices  shall  be  posted  at  points  where  such 
warnings  will  be  most  effective  in  reducing  the  likelihood  of 
contact,  and  prohibitory  notices  shall  be  posted  wherever  elec- 
trical apparatus  that  should  not  be  manipulated  by  unauthor- 
ized persons  is  installed. 

Instruction  for  Resuscitation 

18.  There  shall  be  posted  prominently  in  every  surface 
and  underground  station  and  at  the  entrance  to  the  mine, 
instructions  for  the   restoration  of  persons  suffering  from 
electric  shock. 

All  employees  who  work  with  or  on  electrical  apparatus 
must  know  how  to  carry  out  these  instructions  without  delay. 

Plan  of  Electrical  System 

19.  A  plan  shall  be  kept  at  the  mine  showing  the  position 
of  all  permanently  installed  electrical  machinery  and  appara- 
tus in  connection  with  the  mine  electrical  system,  including 
cables,  conductors,  lights,  motors,  switches,  trolley  lines  and 
transformers.     The  plan  shall  be  of  sufficient  size  to  show 
clearly  the  location  of  such  apparatus,  and  the  scale  shall  be 
not  less  than  200  feet  per  inch.    There  shall  be  stated  on  the 
plan  the  capacity  in  horse-power  or  kilowatts  of  each  motor 
and  transformer,  and  the  nature  of  its  duty.     Such  plan  shall 


698  PROCEEDINGS  OF  AMERICAN  MINING   CONGRESS 

be  corrected  as  often  as  may  be  necessary  to  keep  it  up  to  date, 
at  intervals  not  exceeding  six  months. 

Fire  Protection 

20.  Buckets  filled  with  clean,  dry  sand  shall  be  kept  in 
all  underground  stations  for  immediate  use  in  extinguishing 
fires.     The  minimum  amount  of  sand  thus  stored  in  any  one 
station  shall  not  be  less  than  2  cubic  feet.     No  sand  will  be 
required  if  two  or  more  approved  fire  extinguishers  are  kept 
in  each  station. 

DIVISION   2.— SURFACE   AND   UNDERGROUND   STATIONS, 
GENERATING  STATIONS  AND  SURFACE  SUB-STATIONS 

General  Rules  of  Safety 

See  Rules  8  to  11,  inclusive. 
Generators 

21.  Generators  shall  be  installed  upon  adequate  founda- 
tions in  a  dry  place,  free  from  explosive  vapors  or  flammable 
material. 

22.  Machines  generating  a  voltage  shall  have  their  out- 
going leads   and  connections   entirely  within  the  generator 
frame  or  bed-plate,  or  protected  by  an  approved  guard. 
Switchboards  and  Controlling  Appliances 

See  Rules  36  to  42,  inclusive. 

ELECTRICALLY-DRIVEN  VENTILATING  FAN:   HOUSING, 
POWER  SUPPLY,  AND  ATTENDANT 

Fireproof  Buildings 

23.  All  electrically-driven  mine-ventilating  fans,  together 
with  the  housing  of  the  motor,  shall  be  built  of  fireproof  mate- 
rials.   Underground  electric  fans  shall  not  be  used  where  the 
air  current  contains  gas  or  coal  dust  in  explosive  mixtures, 
and  when  used  the  surroundings  shall  be  fireproofed  within  a 
radius  of  15  feet  from  the  motor,  unless  this  has  a  permissible 
casing. 

Power  Supply 

24.  If  the  line  supplying  the  power  is  exposed  to  the  influ- 
ence of  lightning,  lightning  arresters  shall  be  placed  near  the 
point  where  the  wires  enter  the  fan-house. 


UNDERGROUND  POWER  EQUIPMENT 


25.  The  fan  attendant  shall  report  immediately  any  stop- 
page of  the  fan  to  the  man  legally  in  charge  of  the  operation 
of  the  mine,  and  means  for  direct  communication  between  the 
fan-house  and  generating  station  or  sub-station  supplying  the 
power  shall  be  provided. 

Attendant 

26.  The  responsibility  for  the  operation  of   electrically- 
driven  mine-ventilating  fans  shall  devolve  upon  an  authorized 
person. 

ELECTRICAL  EQUIPMENT  ON  TIPPLES  AND  OTHER 
SURFACE   STRUCTURES 

27.  All  electrical  equipment  on  tipples  and  other  surface 
structures  shall  be  installed  in  accordance  with  the  rules  of 
the  National  Board  of  Fire  Underwriters. 

28.  Starters  of  motors  on  tipples  shall  be  provided  with  a 
no-voltage  release,  and  if  practicable,  shall  be  located  within 
sight  of  the  motors  that  they  control  or  the  machines  that 
they  operate.    A  switch  or  other  means  for  disconnecting  the 
motor  from  the  power  supply  shall  be  installed  near  the 
machinery. 

UNDERGROUND  STATIONS 

General  Rules  of  Safety 

See  also  Rules  8  to  11,  inclusive;  also  Rule  20. 

29.  All  underground  stations  shall  be  fireproof  and  well 
ventilated  with  fresh  air,  and  shall  be  wired  in  accordance 
with  the  requirements  of  the  National  Board  of  Fire  Under- 
writers. 

30.  Ventilation   may  be   accomplished  through   openings 
in  the  walls,  but  with  the  exception  of  underground  stations 
in    which    only    switches    are   installed,   the    openings    shall 
be  provided  with  non-combustible  doors  which  will  either 
close  automatically  in  case  of  fire,  or  can  be  closed  easily  from 
outside  the  room  by  the  attendant. 

Transformer-Stations 

See  also  "Underground  Transformers"  and  Rules  30,  36  to 
42,  inclusive;  84  and  85. 


700  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

31.  Transformer-stations  shall  be  so  arranged  that  if  a 
transformer  explodes  the  oil  will  not  flow  outside  the  room. 

32.  Wires  shall  be  carried  on  non-combustible  supporting 
framework,  and  the  use  of  wood  shall  be  entirely  eliminated. 
The  supporting  framework  shall  be  grounded. 

33.  All   transformers   in   excess   of   50-kilowatt   capacity 
shall  be  equipped  with  suitable  ammeters  in  either  the  pri- 
mary or  secondary  circuits,  or  have  provision  for  connecting 
portable  instruments  into  such  circuits. 

Pump-Stations 

See  also  Rules  50  to  72,  inclusive. 

34.  Pump-motors  operating  at  voltages  exceeding  the  lim- 
its of  low  voltage  shall  be  wired  inside  the  pump-station,  with 
approved  wires  carried  in  conduit  sealed  to  exclude  moisture, 
or  sheathed  with  lead  and  so  placed  or  protected  as  to  avoid 
mechanical  injury.     The  metallic  covering  shall  be  perma- 
nently grounded. 

Battery  Charging-Station 

See  also  Rules  29  and  30. 

35.  For  ventilating  battery  charging-stations,  means  shall 
be  provided  for  obtaining  the  air  from  the  intake  ways  and 
discharging  same  to  the  returning  air-way. 

Hoist  Stations 

See  "General  Rules  of  Safety  for  Underground  Stations," 
Rule  34,  and  Rules  50  to  72. 

DIVISION  3.— MACHINES  AND  APPARATUS 
General  Rules  of  Safety 

See  Rules  3  to  6. 
Switchboards 

See  also  Rules  60  to  72  and  75  to  85. 

36.  Switchboards   shall   consist   of   a   substantial   frame- 
work  of  iron  pipe,   or   structural  steel,   on   which   shall  be 
mounted  a  panel  or  panels  of  non-combustible,  non-absorbent, 
insulating  material  which  is  mechanically  strong,  and  has 
insulating  qualities  suitable  for  the  voltage  at  which  it  is 


UNDERGROUND  POWER   EQUIPMENT  701 

used.     All  switchboard  mountings,  instrument  transformers 
and  motor  casings  shall  be  grounded. 

37.  The  panels  of  insulating  material  may  be  omitted  if 
each  piece  of  equipment  carried  on  the  switchboard  is  pro- 
vided with  an  individual  base  of  insulating  material  of  the 
character  specified  for  the  panels  and  of  adequate  dimensions, 
or  has  its  current-carrying  parts  mounted  on  approved  insu- 
lation self-contained  in  the  equipment,  which  shall  be  especially 
designed  for  mounting  on  iron  pipe  or  structural-steel  frame- 
work. 

38.  Switchboards  shall  be  so  placed  that  there  should  be  a 
straight  passageway  of  not  less  than  3  ft.  in  front  and  in  back 
of  the  switchboard.      These  3-ft.  passageways  shall  be  clear 
of  all  apparatus  mounted  on  the  board  and  shall  be  kept  free 
of  all  obstructions.     The  space  back  of  the  switchboards  shall 
be  provided  with  3-ft.  exits  at  both  ends,  but  shall  not  be 
entered  by  an  unauthorized  person,  and  shall  not  be  used  for 
the  storage  of  material  or  clothing. 

39.  The  space  behind  switchboards  where  the  voltage  ex- 
ceeds low  voltage  shall  be  kept  closed  by  locked  doors,  which 
can  be  opened  from  within  without  the  use  of  a  key,  but  from 
without  with  the  key  only. 

40.  Where  the  voltage  of  the  power  supply  exceeds  the 
limits  of  medium  voltage,  the  live  high-voltage  metal-work 
on  the  front  of  the  switchboard  within  7  ft.  of  the  floor  shall 
be  protected.     In  case  of  existing  installations  that  do  not 
meet  the  requirements  with  this  respect  to  passage  space  in 
back  of  the  switchboard,  no  person  shall  be  permitted  back 
of  the  board  while  any  apparatus  or  circuits  connected  there- 
with are  alive. 

41.  Conductors  shall  not  cross  the  passageways  back  of 
switchboards  except  below  the  floor  or  at  a  height  of  6%  ft. 
above  the  floor. 

42.  There  shall  be  provided  for  each  generator  an  indi- 
cating ammeter  or  wattmeter  of  suitable  capacity,  and  for  all 
generators  a  voltmeter,  that,  by  closing  a  switch  or  manipu- 
lating a  plug  connection,  can  be  connected  to  any  generator. 


702  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

ELECTRIC  VENTILATING  FAN  EQUIPMENT 
Housing  and  Power  Supply 

See  Rules  23  to  25. 
Capacity  of  Motors 

43.  Motors  that  operate  ventilating  fans  shall  be  of  suf- 
ficient capacity  to  drive  the  fan  at  the  maximum  speed  of  the 
motor  under  normal  conditions  of  service  without  overloading. 

Control  of  Motors 

44.  Non-automatic    motor-controlling    appliances,    which 
are  used  with  motors  that  are  not  self-starting,  shall  be  so 
arranged  that  the  motor  will  be  disconnected  automatically 
from  the  supply  circuit  in  case  the  power  supply  fails. 

ELECTRIC  HOISTING  EQUIPMENT 
Shaft  Hoists 

45.  All    electrically-operated    shaft   hoists    shall   be   pro- 
vided with  a  device  approved  for  the  prevention   of  over- 
winding.     Where  the  hoist  is  used  for  handling  men,  addi- 
tional provision  shall  be  made  to  prevent  overwinding  at  the 
man  landing.     Where  a  separate  overwind  protection  for  men 
is  used  a  visual  signal  shall  be  provided  to  indicate  at  all  man 
landings  that  the  overwind  device  is  set  for  hoisting  men.    It 
shall  not  be  possible  to  operate  the  signal  lights  without  set- 
ting the  man  landing  overwind. 

46.  Shaft  hoists  shall  have  a  brake  which  will  keep  the 
hoisting  drum  under  the  control  of  the  operator.     The  brake 
shall  be  provided  with  an  automatic  trip  or  release,  which 
will  apply  the  brake  in  case  the  power  supply  fails,  in  case 
of  overwinding  or  overspeeding,  and  this  brake  shall  have 
sufficient  capacity  to  hold  the  maximum  unbalanced  load. 

47.  Hoists  for  handling  men  shall  be  so  arranged  that,, 
when  hoisting  and  lowering  men  and  the  legal  rate  of  speed 
is  exceeded,  the  hoist  will  automatically  be  brought  to  a  stop. 
If  hoists  are  designed  to  operate  in  balance,  the  driving  motor 
shall  be  of  sufficient  size  to  hoist  full  loads  of  men  in  a  maxi- 
mum unbalanced  condition  in  case  of  emergency. 

48.  All  electric  safety  devices  shall  be  tested  at  the  begin- 


UNDERGROUND  POWER  EQUIPMENT  703 

ning  of  each  shift  and  a  record  of  such  tests  shall  be  made 
and  signed  by  an  authorized  person  and  kept  on  file  at  the 
mine. 

Slope  Hoists 

49.  All  electrically-operated  slope,   tail-rope,   or  endless- 
rope  hoists  in  mines  shall  be  fitted  with  adequate  controlling 
devices  of  approved  design. 

UNDERGROUND  MOTORS  OTHER  THAN  LOCOMOTIVES 

See  Rules  3  to  7  and  "General  Rules  for  Safety  for  Under- 
ground Stations,"  and  Rule  34. 

General  Construction 

50.  Motors  for  use  in  damp  places  shall  have  approved 
moisture-resisting  insulation. 

51.  The  outgoing  leads  and  connections  of  all  motors  shall 
be  protected  from  accidental  contact  by  insulation  or  grounded 
coverings.      Motors  that  operate  at  voltages  exceeding  low 
voltage    shall    have    their    outgoing    leads    and    connections 
entirely  within  the  motor-frame  or  bed-plates,  or  protected  by 
an  approved  guard. 

Permissible  Motors 

52.  See  Permissible  Equipment,  paragraph  15. 
Portable  Motors 

53.  The   motors   and   controlling   appliances   of  portable 
pumps,  hoists,  and  similar  portable  apparatus  shall  be  securely 
mounted  and  with  frame  grounded  to  a  common  base  with  the 
machine  that  is  to  be  operated.    All  wiring  between  the  motor 
and  the  controlling  appliances  shall  be  done  in  accordance 
with  paragraph  7. 

54.  Mining-machine  motors,  and  other  motors  that  use 
a  trailing  cable,  shall  be  provided  where  the  cable  enters  the 
frame  of  the  machine  with  an  approved  means  for  preventing 
abrasion  of  the  insulating  covering  of  the  cable.      An  ap- 
proved insulating  clamp  placed  within  the  frame,  or  protected 
by  an  approved  metallic  covering,  shall  be  provided  for  tak- 
ing all  mechanical  strains  upon  the  cable  terminals.      (See 
also  Rule  55.) 


704  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

Trailing  Cables 

55.  Trailing  cables  for  portable  machines  shall  be  especi- 
ally flexible,  heavily  insulated,  and  protected  with  extra  stout 
braiding,  hose  pipes,  or  other  effective  coverings.      (See  also 
Rule  74.) 

56.  Each  trailing  cable  in  use  shall  be  examined  daily  by 
the  machine  operator  for  abrasion  and  other  defects;  and  he 
shall  also  be  required  to  observe  carefully  the  trailing  cable 
while  in  use,  and  shall  at  once  repair  any  defect  or  report  it  to 
the  person  in  charge  of  electrical  equipment. 

57.  In  the  event  of  the  trailing  cable  in  service  breaking 
down  or  becoming  damaged  in  any  way,  or  any  person  receiv- 
ing a  shock  from  it,  it  shall  be  at  once  put  out  of  ^service.    The 
faulty  cable  shall  not  again  be  used  until  it  has  been  repaired 
and  tested  by  an  authorized  person. 

58.  The  trailing  cable  shall  be  divided  at  the  motor,  but 
only  for  such  length  as  is  necessary  for  making  connection  to 
the  motor;  and  the  cable,  with  its  outer  covering  complete, 
shall  be  clamped  securely  to  the  motor-frame  in  such  a  man- 
ner as  to  protect  the  cable  from  injury,  and  to  prevent  any 
mechanical  strain  being  borne  by  the  signal  ends  that  make 
electric  connection  to  the  motor. 

Permissible  Portable  Motors 

59.  See  Permissible  Equipment,  paragraph  15. 
Control 

60.  Every  stationary  motor  and  every  portable  motor  used 
underground,   except  mining  machines   and   drills,   shall  be 
protected,  together  with  its  starting  device. 

Direct-Current  Motors 

61.  On  two-wire  ungrounded  circuits,  each  wire  shall  be 
protected  by  an  automatic  circuit-breaker,  or  by  a  fuse  and 
switch.    On  two-wire  grounded  circuits,  the  ungrounded  wire 
shall  be  protected  by  a  switch,  and  either  a  fuse  or  an  auto- 
matic circuit-breaker.     When  the  circuit-breaker  trips  free 
from  the  closing  handle,  the  switch  may  be  omitted.    On  three- 
wire  circuits  each  outside  wire  shall  be  protected  by  a  fuse 
or  automatic  circuit-breaker,  but  no  fuse  or  automatic  circuit- 


UNDERGROUND  POWER  EQUIPMENT  705 

breaker  shall  be  used  in  the  neutral  wire.  A  triple-pole  switch, 
to  isolate  the  fuses  or  circuit-breakers  from  live  source,  shall 
be  used.  In  case  circuit-breakers  are  used,  they  shall  be  so 
arranged  that  the  opening  of  the  circuit-breaker  in  one  wire 
will  cause  the  other  circuit-breakers  to  trip. 

Alternating-Current  Motors 

62.  On  three-phase  delta  or  Y   (star)   connected  circuits, 
each  wire  shall  be  provided  with  a  fuse  or  automatic  circuit- 
breaker.     When  circuit-breakers  are  used,  two  overload  trip- 
coils  shall  be  used  for  underground  neutral  systems,  and  three 
overload  trip-coils  for  grounded  neutral  systems.     In  either 
case  the  automatic  circuit-breakers  shall  be  so  arranged  that 
the  opening  of  one  will  open  the  others.      Switches  for  iso- 
lating the  fuses  or  circuit-breakers  from  live  source  shall  be 
provided.     When  air-brake  circuit-breakers,  which  trip  free 
from,  the  handle  are  used,  the  switch  may  be  omitted. 

63.  The  above  devices  shall  be  installed  in  a  convenient 
position  in  sight  of  the  motor  or  in  sight  of  the  equipment 
that  the  motor  operates.     The  controlling  appliances  of  sta- 
tionary motors,  except  the  controllers  of  hoist  and  similar 
equipment,  shall  be  mounted  upon  a  switchboard.  Resistances 
may  be  mounted  upon  a  separate  metallic  framework. 

64.  Underground  motors  that  operate  care  or  coal-handling 
equipment  shall  be  provided  at  a  point  near  such  equipment 
with  a  switch,  or  other  means  for  disconnecting  the  motor 
from  the  power  supply. 

65.  Underground  motors  used  to  drive  booster  or  auxili- 
ary fans  shall  be  so  designed  or  equipped  that  they  will  start 
automatically,  when  their  circuits  are  connected  to  the  power 
supply. 

66.  All  non-automatic,  current-limiting  starting  devices, 
except  those  used  with  mining  machines,  drills,  locomotives, 
and  hoists,  shall  be  provided  with  a  no-voltage  release. 

67.  Electrically-operated  mining  machines  and  drills  may 
be  protected  by  a  single  fuse,  and  need  not  be  equipped  with 
a  line-switch  if  an  approved  current-rupturing  device  is  in- 
stalled at  that  end  of  the  trailing  cable  which  is  nearest  to 
the  power  supply.     If  a  hook  is  used  for  this  purpose  it  shall 


706  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

be  provided  with  an  insulated  handle  of  approved  construc- 
tion. If  cable  reels  are  used,  they  shall  be  provided  with  an 
approved  means  for  opening  the  circuit  under  full  motor  load. 
(See  Rule  15.) 

68.  All  insulating  material  used  in  connection  with  start- 
ing resistances  shall  be  non-combustible.      This  includes  the 
insulation  of  wire  used  for  the  internal  wiring  of  resistances. 

69.  All  switches  shall  be  so  installed  that  they  can  not  close 
by  gravity. 

70.  Every  underground   stationary  motor  of   100   brake 
horse-power  or  over  shall  be  provided  with  a  suitable  meter 
to  indicate  the  amount  of  load  on  the  machine. 

71.  All  wiring  between  motors  and  their  controlling  ap- 
pliances shall  be  insulated. 

72.  Overload   release   devices   on   starting   rheostats   and 
compensators  will  not  be  considered  as  taking  the  place  of 
circuit-breakers,  if  such  devices  are  inoperative  during  the 
starting  of  the  motor.    If  automatic  starting  devices  are  used 
they  shall  be  inclosed  in  a  fireproof  inclosure,  or  mounted 
upon  a  metallic  framework  clear  of  all  combustible  material. 

LOCOMOTIVES 

73.  Gathering  locomotives  may  be  operated  with  a  single- 
conductor  trailing  cable  if  the  track  provides  a  good  metallic 
return;   otherwise  double-conductor  trailing  cable  must  be 
used. 

74.  The  trailing  cable  of  gathering  locomotives  shall  be 
provided  with  an  approved  insulated  hook  or  other  device  for 
making  connection  to  the  trolley  wire;  and  if  a  double-con- 
ductor cable  is  used  a  similar  hook  or  device  shall  be  provided 
for  making  connection  to  the  track  rail. 

UNDERGROUND  TRANSFORMERS 

See  "Underground  Stations."  "Transformer  Stations"  and 
Rules  84  and  85. 


UNDERGROUND  POWER   EQUIPMENT  707 

DIVISION  4.— CIRCUITS  AND  CONDUCTORS 
PROTECTION  AND  CONTROL 

Protection  of  all  Circuits 

75.  All  circuits  leading  from  generating  stations  and  sub- 
stations, except  transformer  sub-stations,  shall  be  provided 
at  their  source  with  current-interrupting  devices  of  such  capa- 
cities, and  so  installed  and  adjusted  that  the  circuit  will  be 
opened  if  the  current  in  the  circuit  exceeds  the  carrying  capa- 
city of  the  conductors  leaving  the  station.     All  circuits  lead- 
ing underground  exceeding  50  kilowatts  capacity  shall  be  pro- 
vided with  a  suitable  ammeter  or  means  for  inserting  a  port- 
able ammeter. 

76.  Two-wire  ungrounded  direct-current  circuits  shall  be 
protected  by  an  automatic  circuit-breaker  or  by  a  fuse  and 
switch  in  each  wire.     Two-wire  grounded  direct-current  cir- 
cuits shall  be  protected  by  a  switch,  and  either  an  automatic 
circuit-breaker  or  a  fuse  in  the  ungrounded  wire.     When  the 
circuit-breaker  trips  free  from  the  closing  handle  the  switch 
may  be  omitted.     Three-wire  ungrounded  direct-current  cir- 
cuits shall  be  protected  by  a  fuse  or  automatic  circuit-breaker 
in  each  outside  conductor,  but  no  fuse  or  circuit-breaker  in 
the  neutral  conductor,  and  in  addition  a  triple-pole  switch  to 
isolate  the  fuse  or  circuit-breaker  from  live  sources.     Where 
one  of  the  outside  wires  is  grounded,  this  should  be  treated  as 
neutral  and  protection  provided  only  in  the  other  two  wires. 

77.  Three-phase  delta  or  Y  (star)  connected  alternating- 
current  circuits  shall  be  protected  by  a  fuse  or  an  automatic 
circuit-breaker  in  each  wire.     When  automatic  circuit-break- 
ers are  used,  two  overload  trip-coils  shall  be  provided  for 
ungrounded  neutral  systems,  and  three  overload  trip-coils  for 
grounded  neutral  systems.     In  either  case  the  automatic  cir- 
cuit-breakers shall  be  so  arranged  that  the  opening  of  one  will 
open  the  others.    Switches  for  isolating  the  fuses  or  circuit- 
breakers  from  live  sources  shall  be  provided. 

Protection  of  Circuits  Leading  Underground 

78.  Each  outgoing   circuit  that  leads  underground,  and 
extends  over  the  surface  of  the  ground  500  ft.  or  more  from 
the  generating  station  or  sub-station,  shall  be  equipped  with 
lightning  arresters  of  approved  type,  with  proper  ground  con- 


708  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

nection  at  the  generating  station  or  sub-station,  and  also  at 
the  point  where  the  circuit  enters  the  mine. 

79.  Lightning  arresters  shall  be  connected  on  the  second- 
ary side  of  all  transformers  that  feed  underground  circuits, 
unless  there  is  provided  other  suitable  means  for  discharging 
abnormal  voltages.    Lightning  arresters  on  the  primary  side 
will  be  considered  suitable  if  the  secondary  circuit  above 
ground  is  less  than  50  ft.  long. 

80.  Each  power  circuit  leading  underground  shall  be  pro- 
vided with  a  disconnecting  switch  in  each  conductor  capable 
of  opening  the  circuit  under  load.    This  switch  shall  be  placed 
where  the  circuit  enters  the  mine  or  within  100  ft.  of  this 
point. 

81.  Each  individual  circuit  leading  underground,  whether 
alternating  or  direct  current,  shall  be  provided  with  automatic 
overload  protection  at  or  before  the  point  where  it  enters 
the  mine  working.      If  two  circuit-breakers  are  used,  they 
must  be  so  interlocked  that  both  will  open  in  the  event  of  one 
opening. 

Protection  of  Underground  Circuits 

82.  All  branch  circuits  of  a  network  shall  be  provided 
with  current-rupturing  devices  of  such  capacity,  and  so  in- 
stalled, that  the  current  in  any  part  of  the  branch  circuit  can- 
not exceed  the  carrying  capacity  of  that  part  as  defined  by 
Rule  14,  if  the  length  of  the  complete  branch  circuit  exceeds 
two  miles. 

83.  Minimum  size  of  conductors  used  to  supply  power  to 
coal-cutting  equipment  shall  be  No.  4  B.  &  S.    Minimum  size 
of  conductors  for  supplying  pumps  shall  be  No.  8  B.  &  S.  All 
conductors  supplying  pumps  and  motors  shall  come  within 
the  limits  given  under  paragraph  14. 

Protection  of  Underground  Transformer  Circuits 

84.  All  transformers   shall  be  equipped  with  automatic 
current-interrupting  devices  in  at  least  the  primary  side  of 
the  transformer;  and  also  in  the  secondary  side  of  the  trans- 
former, if  the  current-interrupting  devices  in  the  primary 
are  not  readily  accessible  from  the  transformer. 


UNDERGROUND  POWER  EQUIPMENT  709 

85.  When  the  voltage  of  circuits  entering  or  leaving  under- 
ground transformers  exceeds  the  limits  of  medium  voltage, 
current-interrupting  devices  shall  consist  of  an  oil  circuit- 
breaker  in  each  conductor,  and  each  switch  shall  be  provided 
with  an  automatic  overload-trip. 

86.  When  the  voltage  of  circuits  entering  or  leaving  trans- 
formers does  not  exceed  the  limits  of  medium 'voltage,  their 
protective  devices  may  consist  of  an  oil  circuit-breaker  as 
described  above,  or  of  a  knife-switch  and  automatic  circuit- 
breaker  in  each  conductor,  except  that  approved  fuses  may  be 
substituted  for  circuit-breakers. 

{ 

INSTALLING  OF  SURFACE  CIRCUITS 
Surface  Transmission-Lines 

87.  Power  wires  shall  not  be  placed  on  the  same  cross- 
arms  with  telegraph,  telephone,  or  signal  wires.    When  placed 
on  the  same  pole  with  such  wires  and  below  them,  the  distance 
between  the  two  inside  pins  of  each  cross-arm  carrying  power 
wires  shall  not  be  less  than  26  inches. 

88.  Transmission-lines  operating  at  voltages  in  excess  of 
5000  volts  shall  not  be  placed  on  the  same  poles  with  tele- 
phone circuits  which  are  or  can  be  connected  underground, 
unless  the  telephone  lines  are  provided  with  approved  protec- 
tive devices  capable  of  preventing  the  higher  voltage  from 
entering  the  underground  telephone  circuits. 

Surface  Trolley-Lines 

89.  All  surface  trolley-lines  shall  be  kept  at  least  6i/2  ft. 
above  the  top  of  the  rail,  and  shall  be  protected  at  all  regularly 
provided  crossings  by  a  guard,  which  will  prevent  men  from 
coming  in  contact  with  the  wire  either  directly  or  by  bringing 
tools  in  contact  with  the  wire. 

90.  That  part  of  the  trolley  circuit  used  for  surface  opera- 
tions shall  be  so  arranged  that  it  can  be  entirely  disconnected 
from  the  power  supply  without  cutting  off  the  current  inside 
of  the  mine,  or  interfering  with  the  operation  of  other  appara- 
tus not  a  part  of  the  trolley  system. 

91.  Trolley-wires  shall  not  be  smaller  than  No.  8  B.  &  S. 
gauge  copper  wire  or  No.  4  B.  &  S.  gauge  silicon-bronze  wire, 


710  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

and  shall  withstand  easily  the  strain  put  upon  them  when  in 
use. 

92.  Trolley  wires  shall  have  double  insulation  from  the 
ground   unless   an  approved  single  insulator  is  used.        In 
wooden-pole  construction  the  pole  will  be  considered  as  one 
insulation. 

METHODS  OF  CARRYING  CIRCUITS  UNDERGROUND 
Suspension  in  Shafts 

93.  All  power  conductors  installed  in  shafts  shall  be  cov- 
ered with  approved  insulating  material  throughout  or  pro- 
tected in  an  approved  manner,  and  shall  be  firmly  fastened 
to  or  suspended  from  properly  supported  insulators,  unless 
the  conductors  are  sheathed  with  lead  or  inclosed  in  conduit. 
Conductors  used  as  returns  in  shafts  for  ground-return  sys- 
tems shall  be  supported  on  insulators,  but  need  not  be  covered 
with  insulation. 

94.  Shaft  cables  which  are  so  constructed  that  the  whole  or 
any  part  of  the  cable  is  not  self-sustaining,  shall  be  supported 
in  an  approved  manner  at  such  intervals  as  may  be  necessary 
to  prevent  the  occurrence  of  undue  strains  in  sheath,  insula- 
tion, or  conductors. 

95.  Shaft  cables  shall  be  so  placed  or  protected  that  they 
are  not  liable  to  injury  from  falling  material. 

Suspension  in  Bore-Holes 

96.  All   power  conductors,   except  grounded   returns   in- 
stalled in  bore-holes,  shall  be  covered  with  insulation  and  sup- 
ported in  an  approved  manner,  which  shall  prevent  the  occur- 
rence of  undue  strains  in  sheath,  insulation  or  conductors. 

97.  Telephone  or  signal  wires  shall  not  be  installed  in  the 
same  bore-hole  with  power  wires,  unless  either  the  signal  or 
the  power  conductors  in  the  bore-hole  are  encased  in  metallic 
coverings  that  are  permanently  grounded. 

Entrance  of  Conductors  Through  Drifts  or  Slopes 

98.  Low  and  medium-voltage  power  conductors  in  drifts 
or  slopes  may  be  installed  bare,  but  shall  be  carried  on  suit- 
able insulators  securely  fastened  to  the  sides  or  roof  of  the 


UNDERGROUND  POWER  EQUIPMENT  711 

entry.     If  the  drift  or  slope  is  used  for  traveling,  the  con- 
ductors shall  be  protected  as  required  in  Rule  105. 

INSTALLATION  OF  UNDERGROUND  POWER  CIRCUITS 
AND  CONDUCTORS 

99.  All  joints  in  wires  shall  be  made  electrically  and  me- 
chanically efficient  either  by  the  use  of  an  approved  mechan- 
ical connector  or  by  soldering. 

100.  Underground  conductors  will  not  be  considered  as 
shock-proof  unless  they  are  encased  in  metallic  covering  that 
is  thoroughly  grounded. 

101.  Low  and  medium-voltage  conductors   shall  be  car- 
ried at  least  6  in.  from  the  trolley-line  and  on  the  nearest  rib 
side  of  it,  and  shall  be  supported  on  insulators  of  an  approved 
type.      When  the  height  of  the  entry  does  not  exceed  5  ft., 
the  insulators  shall  be  placed  not  more  than  20  ft.  apart  and 
as  much  closer  as  is  necessary  to  support  the  wires  properly. 

102.  If  the  height  of  the  entry  is  more  than  5  ft.,  the 
insulators  shall  be  placed  not  more  than  30  ft.  apart,  and  as 
much  closer  as  may  be  necessary  to  support  the  line  properly. 

103.  High-voltage  conductors  shall  be  carried  in  metallic 
coverings,  and  shall  be  installed  in  an  approved  manner  with 
special  reference  to  the  conditions  under  which  they  are  in- 
stalled. 

104.  The  negative  or  return  wire  of  grounded  systems  shall 
be  treated  in  exactly  the  same  menner  as  the  positive  or  live 
wire,  and  afforded  the  same  support  and  insulation. 

105.  All  conductors  in  traveling  ways,  except  haulage- 
roads  used  for  traveling  (see  Rule  11)   and  medium-voltage 
conductors   in  room  entries,   shall  be  protected   throughout 
that  part  of  the  entry  that  is  used  for  traveling,  unless  the 
conductors  are  at  least  6!/2  ft.  above  the  rail,  in  which  case 
protection  will  be  necessary  only  at  those  points  where  men 
are  required  to  work  beneath  the  conductors  or  pass  under 
them.      The  insulators  may  be  supported  directly  from  the 
roof  or  side  or  may  be  attached  to  timbers  not  less  than  3  by  4- 
inch  size,  or  may  be  secured  to  steel  mine  timbers.    The  in- 
sulators shall  be  placed  so  that  the  height  of  the  conductors 
above  the  bottom  will  be  comparatively  uniform. 


712  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

106.  All  conductors  shall  be  strung  with  the  least  prac- 
ticable sag  between  the  supporting  insulators,  and  shall  be 
maintained  in  this  condition  and  kept  from  contact  with  rock, 
coal,  timber,  or  other  non-insulating  material. 

107.  All  main   conductors  shall  be  sectionalized  by  ap- 
proved switches  at  points  not  more  than  2500  ft.  apart. 
Branch  Conductors 

108.  Branch   conductors   shall  be  supported    and    main- 
tained in  the  same  manner  as  main  conductors,  and  given  the 
same  protection. 

109.  At  the  point  where  branch  circuits  leave  the  main 
circuits  there  shall  be  placed  a  switch  for  cutting  off  all  cur- 
rent from  the  branch  circuits. 

110.  Where  wires  pass  through  partitions  or  wooden  or 
other  brattices,  they  shall  be  protected  with  approved  in- 
sulating tubes  held  in  place  with  tape  or  thoroughly  cemented 
in  place  so  that  they  can  not  move. 

111.  Entries  or  passageways  in  which  wires  are  installed 
must  be  kept  sufficiently  free  from  rock,  slate,  or  other  mate- 
rial to  permit  ready  access  to  the  wires  at  all  times. 

Room  Wiring* 

112.  Rooms  in  which  gas  or  coal  dust  exist  in  explosive 
mixtures  shall  not  be  wired.     Where  room  wiring  is  permis- 
sible it  shall  be  treated  as  branch  circuits,  and  equipped  at 
the  room  entrance  with  switches  or  some  other  device  that 
will  entirely  disconnect  the  wiring  when  not  in  use. 

Trolley-Wires 

113.  Trolley-wires    shall    be    of    hard-drawn    copper   not 
smaller  in  size  than  1/0  B.  &  S.  gauge,  and  shall  be  securely 
supported  on  approved  hangers,  which  may  be  attached  di- 
rectly to  the  roof  or  securely  fastened  to  timber  or  equivalent. 

114.  The  height  of  trolley-wires  above  the  top  of  the  rail 
shall  be  made  as  uniform  as  practicable. 

115.  Trolley-wires  shall  be  so  placed  as  to  give  the  maxi- 
mum clearance  practicable,  and  kept  in  as  straight  a  line  as 
possible. 


*The  U.  S.  Bureau  of  Mines  recommends  that  rooms  be  not  wared. 


UNDERGROUND  POWER   EQUIPMENT  713 

116.  On  straight  runs,  the  hangers  shall  be  placed  not 
more  than  20  ft.  apart, where  the  height  of  the  roof  above  the 
track  is  5  ft.  or  less,  and  not  more  than  30  ft.  apart  where 
the  roof  is  more  than  5  ft.  above  the  track.    On  curves,  the 
hangers  shall  be  placed  so  close  together  that  the  trolley-wire 
at  any  one  hanger  may  be  entirely  disconnected  without  ex- 
posing the  locomotive  runner  to  danger  of  contact. 

117.  Underground  trolley-lines  shall  be  sectionalized  every 
2500  ft.  by  placing  in  the  line  a  switch  by  which  the  line  can 
be  entirely  disconnected  from  the  power  supply.     All  branch 
trolley-lines  shall  be  provided  with  a  frog  at  the  point  where 
they  leave  the  main,  and  also  with  a  switch  installed  at  or 
near  the  frog,  by  which  the  branch  can  be  disconnected  from 
the  main. 

118.  Trolley-wires  that  are  less  than  G1/^  ft.  above  the  top 
of  the  rail  shall  be  protected  at  all  points  where  men  are  regu- 
larly required  to  work  or  pass  under  them,  and  at  all  points 
where  men  may  come  in  contact  with  the  wires. 

Bonding 

119.  The  tracks  of  all  main  haulage  systems  that  use  a 
rail  return  shall  be  bonded  at  every  rail  joint,  and  cross  bond- 
ing shall  be  placed  at  intervals  not  exceeding  200  ft.    Special 
provision   shall  be  made  for  bonding  around  all  switches, 
frogs,  or  openings  in  the  track  so  as  to  insure  a  continuous 
return. 

Lighting  Circuits  in  Places  Where  Gas  or  Coal  Dust  Do  Not  Occur 
in  Dangerous  Mixtures 

See  also  Rules  133  to  135 ;  137  to  139. 

120.  Lighting  wires  shall  be  attached  to  power  wires  by 
soldering  or  by  fastening  under  a  set-screw  in  a  lug  attached 
to  the  trolley-hanger,  or  by  such  other  devices  as  will  prevent 
the  wires  from  becoming  loose. 

121.  All  wiring  shall  be  supported  on  non-combustible, 
non-absorbent  insulators,  which  shall  separate  the  wires  by 
at  least  1  in.  from  the  surfaces  wired  over.    Wires  of  opposite 
polarity  shall  be  kept  at  least  21/2  in.  apart  for  low  voltage, 
and  5  in.  apart  for  medium  voltage. 


714  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

122.  No  wires  smaller  than  No.  14  B.  &  S.  gauge  shall  be 
used  for  lighting  circuits  in  non-gaseous  places. 

123.  When  the  ground  is  used  as  a  return  for  lighting  cir- 
cuits, the  return  wire  shall  be  attached  to  the  track  by  bond- 
ing to  the  rail  or  by  attachment  to  regular  bonding  in  ah  ap- 
proved manner.    This  ground  connection  shall  be  made  of  not 
less  than  No.  8  B.  &  S.  gauge  copper  wire,  which  shall  be 
buried  below  the  surface  and  carried  to  the  side  of  the  entry, 
and  thence  on  porcelain  insulators  to  the  roof  or  a  point  at 
least  5  ft.  above  the  track. 

Lighting  Circuits  in  Places  Where  Gas  or  Coal  Dust  Occurs  in 
Dangerous  Mixtures* 

See  also  Rules  136  and  140. 

124.  '  The   potential  of  lighting  circuits  shall  not  exceed 
the  limits  of  low  voltage. 

125.  Only  permissible  equipment  shall  be  used  for  light- 
ing circuits. 

126.  The  circuits  shall  be  run  from  the  outside,  with  all 
switches  and  protective  devices  on  the  surface,  or  by  using 
permissible    switches,    fuses,    or    circuit-breakers    situated 
underground,  or  by  ventilating  with  fresh  air  the  place  where 
the  switches  and  fuses  are  installed. 

127.  If  the  circuits  are  run  from  the  outside  with  the  con- 
trolling devices  installed  on  the  surface,  the  conductors  lead- 
ing underground  shall  be  not  smaller  than  No.  8  B.  &  S. 
gauge,  and  each  circuit  shall  be  provided  above  ground  with 
a  suitable  ammeter. 

128.  Each  circuit  shall  have  a  double-pole  switch  and  fuses 
or  circuit-breakers  in  the  case  of  two-wire  systems,  and  a 
three-pole  switch  and  fuses  or  circuit-breakers  in  the  case  of 
three-wire  systems. 

129.  The  fuses  or  circuit-breakers  shall  be   designed  or 
arranged  to  operate  when  the  allowable  load  is  exceeded  by 
25%. 


*Bureau  of  Mines  recommends  that  in  mines  in  which  fire-damp  is 
given  off  in  dangerous  quantities,  the  use  of  lighting  circuits  be  confined 
to  those  entries  and  places  that  are  ventilated  by  intake  air-currents  which 
have  not  passed  by  or  through  abandoned  or  active  workings,  except  that 
a  lighting  circuit  may  be  used  in  a  shaft  or  slope  bottom  ventilated  by  a 
return  air-current  in  which  the  percentage  of  methane  does  not  exceed  1%. 


UNDERGROUND  POWER  EQUIPMENT  715 

130.  No  wire  smaller  than  No.  12  B.  &  S.  gauge  shall  be 
used  in  lighting  circuits  except  for  the  leads  of  weather- 
proof sockets,  and  these  shall  not  be  less  than  No.  14  B.  &  S. 
gauge. 

131.  In  case  distribution  is  made  from    a    point    under- 
ground, the  distribution  switches  and  fuses  shall  be  mounted 
on  a  non-combustible  panel,  placed  in  a  metal  cabinet  and 
fitted  with  a  hinged  door.     This  cabinet  shall  be  used  whether 
permissible  switches  are  required  or  not.     The  cabinet  shall 
be  fitted  with  a  door  properly  hinged,  so  that  it  will 'close 
tightly  and  shall  be  provided  with  a  fastening  which  will  hold 
the  door  securely  in  a  closed  position. 

132.  Flexible  lamp-cord  connections  are  prohibited  except 
for  portable  lamps,  as  covered  by  Rule  141. 

DIVISION  5.— MISCELLANEOUS  EQUIPMENT 
FIXED  ELECTRIC  LAMPS 

For  wiring  and  control  requirements  of  fixed  electric  lamps, 
see  Rules  120  to  132,  inclusive. 

133.  Electric  lamps  used  to  illuminate  haulage-roads,  side 
tracks,  and  similar  passageways  where  gas  or  coal  dust  do 
not  exist  in  explosive  mixtures,  may  be  connected  to  power 
and  trolley-lines. 

134.  Lamps  may  be  connected  in  multiple  or  in  series,  and 
no  fuse  or  switch  will  be  required  for  one  lamp  or  series  of 
lamps.    A  switch  may  be  used  if  it  is  desired  to  switch  the 
lamps  on  or  off,  and  a  fuse  must  be  used  if  it  is  necessary 
to  protect  any  considerable  length  of  wire. 

135.  All  sockets  shall  be  of  the  keyless  weather-proof  type, 
and  have  no  exposed  metallic  parts.      Lead  wires  shall  be 
rubber-covered,  and  of  a  size  not  smaller  than  No.  14  B.  &  S. 
gauge.      The  lead  wires  shall  be  made  axpart  of  the  socket 
and  permanently  connected  thereto.    These  wires  shall  be  at- 
tached directly  to  the  line  wires  by  soldering  or  by  mechanical 
connectors.     Sockets  shall  not  be  supported  by  the  lines  wires, 
but  by  an  additional  insulator  or  insulators,  or  some  other 
device  that  will  be  entirely  independent  of  the  line  wires. 

136.  In  mines  that  contain  gas  or  coal  dust  in  explosive 
mixtures,  and  in  which  electricity  is  used  only  for  lighting 


716  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

or  where  the  lighting  circuits  are  separate  from  the  power  cir- 
cuits, the  voltage  of  such  circuits  shall  not  exceed  the  limits 
of  low  voltage,  and  all  lamps  shall  be  connected  in  multiple. 

137.  Not  more  than  24  lamps  shall  be  attached  to  any  one 
circuit,  and  the  power  taken  by  any  one  circuit  shall  not  exceed 
1300  watts. 

138.  Permissible  mine  incandescent  lamps  shall  be  used 
where  gas  or  coal  dust  occurs  in  explosive  mixtures. 

139.'    Incandescent  lamps  shall  be  so  installed  that  they 
cannot  come  in  contact  with  combustible  material. 

140.  Electric  lamps  shall  be  replaced  by  an  authorized  per- 
son only,  and  in  places  where  gas  or  coal  dust  exist  in  explo- 
sive mixtures,  only  after  an  examination  for  gas  has  been 
made  with  a  safety-lamp. 

Portable  Electric  Lamps 

141.  Portable  incandescent  lamps,  other  than  permissible 
battery-lamps,  shall  be  protected  by  a  heavy  wire  cage,  which 
completely  encloses  both  lamp  and  socket,  and  shall  be  pro- 
vided with  a  handle  to  which  both  cage  and  socket  are  firmly 
attached,  and  through  which  the  cord  supplying  the  current  is 
carried.    The  socket  shall  be  keyless,  and  the  lamp  circuit  shall 
be  protected  by  a  fuse. 

142.  When  a  portable  lamp  is  one  of  several  connected  in 
series  between  a  source  of  voltage  and  the  earth,  the  portable 
lamp  shall  be  the  one  in  the  series  electrically  nearest  to  the 
earth  connection. 

143.  The  use  of  portable  lamps  with  leads  of  ordinary 
flexible  cord  is  prohibited.    Only  lamp  cords  approved  for  this 
purpose  shall  be  used. 

Self-Contained  Portable  Electric  Lamps* 

144.  Permissible    self-contained    portable    electric    lamps 
shall    be  used  in  places  where  gas  or  coal  dust  occurs  in  ex- 
plosive mixtures. 


*The  use  of  self-contained  portable  electric  lamps  of  suitable  design  and 
construction  is  recommended  for  all  coal  mines,  provided  that  in  places 
where  gas  or  coal  dust  occur  in  dangerous  mixtures,  or  in  places  where 
blackdamp  is  given  off  in  large  quantities,  frequent  inspections  with  safety- 
lamps  are  made. 


UNDERGROUND  POWER   EQUIPMENT  717 

Electric  Shot-Firing  Equipment 

145.  Electricity  from  any  grounded  circuit  shall  not  be 
used  for  firing  shots.f 

146.  Special  precautions  shall  be  taken  to  prevent  shot- 
firing  conductors  from  becoming  grounded,  or  from  getting  in 
contact  with  other  electric  circuits. 

147.  Only  authorized  persons  shall  be  allowed  to  fire  shots 
with  electricity  in  a  mine. 

148.  The  electric  detonators  or  igniters  and  leads  thereto 
shall  be  suitable  for  the  conditions  under  which  the  blasting  is 
carried  on  and  shall  be  approved  by  the  United  States  Bureau 
of  Mines. 

149.  Portable  shot-firing  machines  shall  be  of  efficient  de- 
sign and  shall  be  substantially  constructed.    All  such  machines 
shall  be  enclosed  in  strong,  tight  casings. 

150.  Primary  or  secondary  batteries  used  for  shot-firing 
shall  be  enclosed  in  a  well-constructed  casing  provided  with  a 
special  form  of  contact-plug  for  making  the  connection  be- 
tween the  batteries  and  shot-firing  leads.    The  design  of  the 
plug  shall  be  such  that  considerable  pressure  will  be  required 
to  make  the  contact,  which  will  be  immediately  broken  unless 
the  plug  is  forcibly  held  in  position. 

151.  There  shall  be  no  exposed  contacts  on  the  outside  of 
the  battery  casings. 

152.  All  portable  shot-firing  machines  shall  be  equipped 
with  a  detachable  handle,  connecting  plug,  key,  or  similar 
approved  device  without  which  the  shot-firing  circuit  cannot 
be  closed,  and  which  shall  under  no  circumstances  pass  from 
the  custody  of  the  person  authorized  to  fire  the  shots. 

153.  No  shot-firing  device  shall  be  connected  to  the  shot- 
firing  leads  until  all  other  steps  preparatory  to  the  firing  of  the 
shot  have  been  completed,  and  all  persons  have  moved  to  a 
position  of  safety. 

Disconnection  of  Leads 

154.  Immediately  after  the  firing  of  a  shot,  the  firing  leads 


fit  is  recommended  that  all  shots  be  fired  electrically,  and  for  inside 
firing,  shots  be  fired  separately — and  one  at  a  time,  on  account  of  the 
danger  of  causing  blown-out  shots  and  resultant  explosions.  If  fired  in 
groups,  the  firing  should  be  done  only  from  the  surface. 


718  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

shall  be  disconnected  from  the  supply  of  electricity,  and  no 
person  shall  aproach  a  shot  which  electricity  has  failed  to  ex- 
plode until  the  firing  leads  have  been  so  disconnected,  and  an 
interval  of  10  minutes  has  elapsed  since  the  last  attempt  to  fire 
the  shot. 

Shot-Firing  From  Surface 

155.  In  coal  mines  employing  the  system  of  firing  shots 
electrically  from  above  ground  when  everyone  is  out  of  the 
mine,  a  complete  metallic  circuit  shall  be  employed,  and  both 
wires  shall  be  covered  with  insulation  and  supported  upon 
glass  or  porcelain  insulators. 

156.  There  shall  be  a  switch  at  the  mouth  of  each  working 
place,  so  that  the  circuit  can  be  kept  open  while  miners  are  at 
work,  and  closed  only  when  the  shots  have  been  prepared,  and 
the  miner  or  miners  are  leaving  the  place. 

157.  There  shall  be  a  locked  switch  in  the  circuit  at  the 
entrance  to  each  heading  or  side  entry,  which  shall  be  locked 
open  and  be  thrown-in  only  by  an  authorized  person,  when  all 
the  men  are  out  of  the  respective  heading  or  branch  entry. 

158.  There  shall  be  in  the  circuit  at  the  foot  of  the  shaft  or 
slope,  two  plugs  with  flexible  leads  not  less  than  5  ft.  long,  to 
break  further  the  main  circuit  of  the  shot-firing  system  until 
all  the  men  in  the  mine  have  gone  out,  when  the  plugs  will  be 
put  in  by  the  one  man  authorized  to  do  so.    Provision  shall  be 
made  for  locking  the  plugs  out  of  circuit. 

159.  There  shall  be  placed  in  the  power-house  a  locked 
switch  to  be  used  for  connecting  the  shot-firing  circuit  to  the 
generator  or  power-line.    This  switch  shall  be  thrown-in  only 
by  the  man  who  is  authorized  to  do  the  shot-firing,  and  not 
until  the  men  have  been  checked  out  of  the  mine. 

160.  There  shall  be  placed  in  the  shot-firer's  cabin  a  locked 
firing-switch,  which  shall  be  thrown  only  by  the  authorized 
shot-firer  after  all  the  men  are  out  of  the  mine,  and  after  all 
other  switches  have  been  thrown-in.      In  firing  shots,  this 
switch  shall  be  thrown  but  once. 

161.  To  insure  that  all  men  are  out  of  the  mine,  an  approved 
system  of  checking  shall  be  employed. 


UNDERGROUND  POWER   EQUIPMENT  719 

162.  All  shot-firing  lines  shall  be  carefully  insulated  and 
the  two  wires  that  form  the  circuit  shall  be  placed  on  the  side 
of  the  entry  or  passageway  opposite  from  that  on  which  the 
trolley-wire  is  placed,  and  so  far  as  possible  other  roads  than 
the  trolley  road  shall  be  used  for  carrying  the  wires  into  the 
working  places. 

Electric  Signaling  Equipment 

163.  The  parts  of  electric  signaling  systems  used  in  connec- 
tion with  mines  shall  be  designed,  constructed,  and  installed  in 
an  approved  manner.    No  voltage  in  excess  of  25  volts  shall  be 
applied  to  signal  circuits  in  places  where  gas  or  coal  dust  occur 
in  explosive  mixtures. 

164.  Only  permissible  equipment  shall  be  used  in  places 
where  gas  or  coal  dust  occurs  in  explosive  mixtures. 

165.  Suitable  precautions  shall  be  taken  to  prevent  electric 
signal  or  telephone  wires  from  becoming  grounded  or  from 
coming  in  contact  with  electric  conductors,  whether  insulated 
or  not.     Signal  circuits  and  telephone  wires  shall  not  be  in- 
stalled on  the  same  side  of  an  entry  as  power  conductors. 

BRIEF  OF  DISCUSSION  ON  JOINT  REPORT  OF  SUB-COM- 
MITTEES ON  STANDARDIZATION  OF  UNDERGROUND 
POWER  TRANSMISSION  AND  STANDARDIZATION 
OF  POWER  EQUIPMENT 

By  WARREN  R.  ROBERTS,  Chairman  of  General  Committee 

The  Chairman  of  these  two  Committees  decided  that  the 
subject  matter  each  of  them  had  under  consideration  was  so 
interwoven  that  it  was  best  to  consolidate  their  efforts,  and 
their  work  was  therefore  carried  on  in  joint  sessions,  and  they 
rendered  a  joint  report. 

The  Committees  were  most  fortunate  in  having  Mr.  Kiser, 
chairman  of  one  of  the  Sub-Committees,  present  at  the  Stand- 
ardization Conference  to  present  their  joint  report.  He  stated 
that  the  report  was  entirely  too  long,  and  contained  too  much 
technical  data,  he  thought,  to  make  it  of  interest  to  the  Con- 
ference, and  therefore  discussed  the  most  salient  features  of 
the  joint  report. 

Mr.  Kiser  first  expressed,  on  behalf  of  the  Chairman  of  both 


720  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

these  Committees  their  sincere  appreciation  of  the  keen  in- 
terest shown  in  the  work  by  the  members  of  these  Committees. 
He  also  placed  in  the  record  an  expression  of  the  Committees' 
indebtedness  to  the  U.  S.  Bureau  of  Mines  for  providing  not 
only  a  meeting  place,  but  a  secretary  during  their  joint  meet- 
ings. Mr.  Riser  explained  that  the  work  of  their  Committees, 
and  therefore  their  report,  was  separated  into  two  general 
divisions :  first,  the  standardization  of  practice  in  the  installa- 
tion and  operation  of  equipment,  and  the  standardization  of 
equipment. 

As  the  Electric  Power  Club  has  for  its  object  the  standard- 
ization of  "capacities,  voltages,  speeds,  and  essential  mechanical 
features  of  electric  motors,  generators,  transformers,  etc.,  and 
as  its  standards  are  the  accepted  standards  throughout  the 
country,  it  was  suggested  that  the  Committee  adopt  them  as 
their  standards  for  such  equipment.  It  was  also  suggested 
that  the  standardization  rules  of  the  A.  I.  E.  E.  be  adopted  as 
our  standards  of  technical  matters.  In  giving  attention  to  the 
standardization  of  practice,  the  Committee  considered  that  this 
work  was  very  thoroughly  covered  by  the  U.  S.  Bureau  of 
Mines  Technical  Paper  No.  138,  entitled  'Suggested  Rules  for 
Installing  and  Using  Electrical  Equipment  in  Bituminous  Coal 
Mines/  The  data  contained  in  this  Bulletin  was  therefore 
taken  as  the  basis  for  the  work  of  the  Committee.  Each  rule 
was  thoroughly  discussed  and  revised  when  it  seemed  advis- 
able to  do  so  for  the  purpose  of  clarifying  it,  or  making  it  con- 
form to  present  day  practice. 

Lastly,  the  Committee  advises  that  the  rules  as  they  appear 
.in  the  report  of  this  Committee  are  prepared  especially  to 
cover  coal-mining  conditions,  but  they  are  applicable  to  metal 
mines,  by  omitting  certain  paragraphs  which  concern  the  ex- 
istence of  gas  or  coal  dust  in  explosive  mixtures. 

This  brief  digest  of  the  verbal  presentation  of  this  most 
valuable  report  is  intended  simply  to  give  an  insight  into  the 
methods  of  procedure  by  this  Joint  Committee,  and  to  indicate 
the  careful  and  thorough  manner  in  which  they  have  done 
their  work.  A  study  of  this  joint  report,  however,  is  necessary 
to  appreciate  the  amount  of  good  work  performed  on  behalf 
of  the  industry  by  this  Joint  Committee. 


STANDARDIZATION   OF  HAMMER-DRILLS  721 

DIGEST  OF  PAPER  ON 

SUGGESTIONS  FOR  THE  STANDARDIZATION  OF  HAMMER 
DRILLS  AND  ACCESSORIES 

Prepared  by  GEORGE  H.  GILMAN,  East  Boston,  Mass.     Member  of  the 
Sub-Committee  on  Drilling-Machines  and  Drilling 

Presented  at  the  Meeting  of  the  Sub-Committee  on  Drilling-Machines 

I  do  not  recommend  an  attempt  being  made  to  restrict  the 
quantity  of  sizes  and  types  of  standard  machines  to  a  point 
that  will  tend  to  lower  the  overall  efficiency  of  the  drilling 
operation,  regardless  of  the  fact  that  from  the  manufacturer's 
viewpoint  the  fewer  the  number  and  types  of  machines  the 
greater  will  be  the  volume  of  each  type  built,  with  a  consequent 
reduction  in  manufacturing  costs.  However,  with  a  variety  of 
types  and  sizes  of  machines  to  choose  from,  the  individual 
mine  operator  will  be  able  to  select  the  minimum  number  to 
meet  to  the  best  advantage  the  requirements  of  the  work,  and 
after  the  selection  is  made,  it  will  then  be  necessary  for  the 
manufacturer's  engineer  to  regulate  the  mechanism  of  the  drill 
in  order  that  it  may  be  adapted  to  the  conditions  of  ground 
and  air  pressure  to  the  best  advantage.  With  this  in  view,  I 
recommend  the  standardization  of  the  following  machines : 

Details,  Capacity  and  Use  of  Machines 

(1)  A  hand-held  hammer-drill  to  weigh  25  to  30  lb.,  having 
automatic  bit  rotation,  double-grip  handle,  drill-steel 
retainer,  automatic  lubricator,  means  for  cleaning  the 
drill-hole  with  air  only,  and  a  chuck  adapted  for  %-in. 
quarter-octagon  hollow  drill-steel,  having  %-in.  quar- 
ter-octagon collared  shank  %  in.  long. 

Capacity — holes  to  a  maximum  depth  of  4  ft.  with  a 
bottom  diameter  of  l1/^  inches. 

Use — scaling  walls  and  hitch  cutting  from  ladder  or 
staging,  light  pop-holing,  etc. 

(2)  A  hand-held  hammer-drill  to  weigh  30  to  40  lb.,  having 
automatic  bit  rotation,  double-grip  handle,  drill-steel 
retainer,  automatic  lubrication,  water  attachment,  and 
chuck  adapted  for  %-in.  quarter-octagon  hollow  drill- 


722  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

steel  having  a  %-in.  quarter-octagon  collared  shank 

3%  in.  long. 

Capacity — holes  to  a  maximum  depth  of  8  in.  with  a 

bottom  diameter  of  1*4  inches. 

Use — pop-holing  in  boulders,  blast-holes  in  shrinkage 

stopes,  quarry  work,  etc. 

(3)  A  hand-held  hammer-drill  to  weigh  30  to  40  lb.,  having 
automatic  bit  rotation,  double-grip  handle,  drill-steel 
retainer,  automatic  lubrication,  and  chuck  adapted  for 

p.  collared  solid  auger  drill-steel  of  cruciform  section 

li/2-in.  diameter  (spiral  to  be  3%  turns  per  foot), 
having  a  %-in.  quarter-octagon  collared  shank  3*4  in, 
long. 

Capacity — holes  to  a  maximum  depth  of  9  ft.,  with  a 
bottom  diameter  of  1%  inches. 

Use — blast-hole  drilling  in  hematite  iron  ore,  hard 
pan,  gravel,  and  earth  formations. 

(4)  A  hand-held  hammer-drill  to  weigh  55  to  60  lb.,  having 
automatic  bit  rotation,  double-grip  handle,  drill-steel 
retainer,  automatic  lubrication,  water  attachment,  and 
chuck  adapted  for  %-in.  quarter-octagon  hollow  drill- 
steel  having  a  quarter-octagon  collared  shank  3*4  in. 
long. 

Capacity — holes  to  maximum  depth  of  12  ft.  with  a 
bottom  diameter  of  1*4  inches. 

Use — blast-hole  drilling  in  shafts,  open-pit  mining  and 
deep-hole  drilling  in  quarries. 

(5)  A  mounted  hammer-drill  to  weigh   115  to   125  lb., 
having  a  shell  and  feed-screw  equipped  with  a  sliding 
trunnion  and  adapted  for  a  normal  drill-steel  change 
of  24  in.    The  hammer  engine  to  have  automatic  drill- 
bit  rotation,  drill-steel  retainer,  automatic  lubrication, 
water  attachment,  and  chuck  adapted  for  %-in.  quar- 
ter-octagon hollow  drill-steel  having  a  quarter-octagon 
collared  shank  3*4  in-  long. 

Capacity — holes  to  be  a  maximum  depth  of  12  ft.  with 

a  bottom  diameter  of  1*4  inches. 

Use — breast  stoping,  light  drifting,  and  tripod  drilling. 

(6)  A  mounted  hammer-drill  to  weigh   160  to   180  lb., 
having  a  shell  and  feed-screw  adapted  for  a  normal 


STANDARDIZATION   OF  HAMMER-DRILLS  T23 

steel  change  of  24  in.     The  hammer  engine  to  have 

automatic    drill-Bit    rotation,    automatic    lubrication, 

water    attachment,    and    chuck    with    bayonet    lock 

adapted  for   li/i-in.  round,  lugged  hollow  drill-steel 

having  a  round  shank  3  13-16  in.  long. 

Capacity — holes  to  a  maximum  depth  of  20  ft.,  with  a 

bottom  diameter  of  1%  inches. 

Use — heavy  drifting  and  tripod  work. 

(7)  A  pneumatic  feed  hammer-drill  to  weigh  80  to  90  lb., 
having  a  pneumatic-feed  extension  to  the  hammer  en- 
gine adapted  for  a  normal  steel  change  of  18  in.  The 
hammer  engine  to  have  automatic  drill-bit  rotation, 
automatic  lubrication,  water  attachment,  and  chuck 
adapted  for  7/Q-in.  quarter-octagon  hollow  drill-steel, 
equipped  with  a  quarter-octagon  collared  shank  3%  in. 
long. 

Capacity — holes  to  a  maximum  depth  of  12  ft.  with  a 

bottom  diameter  of  1^  inches. 

Use — overhead  drilling  in  stopes  and  raises. 

(8)  A  pneumatic  feed  hammer-drill  to  weigh  60  to  65  lb., 
having  a  pneumatic-feed  extension  to  the  hammer  en- 
gine adapted  for  a  normal  steel  change  of  18  in.  and 
adapted  to  be  oscillated  by  hand.    The  hammer  engine 
to  have  automatic  lubrication,  water  attachment,  and 
chuck  adapted  for  %-in  quarter-octagon  hollow  drill- 
steel,  equipped  with  a  quarter-octagon  collared  shank 
3%  in.  long. 

Capacity — holes  to  a  maximum  depth  of  8  ft.  with  a 
bottom  diameter  of  1%  inches. 

Use — overhead  drilling  in  stopes  and  raises  where  the 
conditions  of  the  work  do  not  demand  that  the  drill  be 
equipped  for  automatic  rotation  of  the  drill-steel. 

Size  of  Drill-Steel 

In  making  recommendations  for  machine  standardization 
the  standardization  of  drill-steel  should  be  embodied,  for  to  my 
knowledge  there  is  no  good  reason  why  for  98%  of  the  under- 
ground conditions  encountered  in  metal  mining  there  should 
be  more  than  three  sizes  and  shapes  employed. 


724  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

(a)  %-in-  quarter-octagon  hollow  drill-steel  equipped  with 
a  %-in,  collared  quarter-octagon  shank  S1^  in.  long. 

Applicable  to  machines  1,  2,  4,  5,  7,  and  8. 

(b)  IVfc-in.   solid  cruciform  twisted   drill-steel  equipped 
with  a  %-in-  collared  quarter-octagon  shank  3*4  in. 
long. 

Applicable  to  machine  3. 

(c)  1%-in.  round,  hollow  drill-steel  equipped  with  a  1^4-in.* 
round,  lugged  shank  3  13-16  in.  long. 

Applicable  to  machine  6. 

The  7/Q-in.  hollow  quarter-octagon  section  is  recommended 
under  (a)  because  of  its  angular  shape,  which,  when  rotated 
in  the  drill-hole,  facilitates  the  ejection  of  the  sludge  and  pre- 
vents mud  collars  from  forming.  In  cross-sectional  area  it 
exceeds  that  of  the  hexagon,  round,  and  cruciform  shapes  of 
corresponding  diameter,  thus  providing  greater  strength  in 
comparison,  and  when  the  shanks  are  made  in  this  section, 
greater  bearing  surface  to  resist  wear  both  in  the  shank  and 
chuck  bushing.  The  shape  of  the  quarter-octagon  steel  also 
facilitates  the  forging  of  a  four-winged  bit  as  the  wings  may 
be  drawn  from  the  four  flattened  corners  of  the  bar,  and  in 
addition  it  provides  an  ideal  gripping  surface  for  the  dies  of 
the  drill-sharpening  machine. 

Heretofore  it  has  been  an  accepted  theory  that  in  the  case 
of  pneumatic-feed  drills,  a  collarless  drill-shank  is  desirable, 
for  by  its  use  the  work  of  putting  the  collar  on  the  steel  is 
obviated.  This  assumed  advantage  is,  however,  subject  to 
question  when  it  is  considered  that  the  employment  of  shank- 
less  drill-steel  necessitates  the  use  of  an  anvil-block  or  striking- 
pin  interposed  between  the  hammer-piston  and  the  drill-steel, 
which  depending  upon  its  weight  and  the  character  of  the  blow 
delivered  by  the  pneumatic  hammer,  results  in  a  loss  of  from 
20  to  30%  of  the  effectiveness  of  the  blow  in  transmission 
through  the  part.  That  it  precludes  the  possibility  of  standard- 
izing on  two  sizes  or  types  of  drill-steel  for  the  average  hard- 
rock  metal  mine  and,  furthermore,  that  it  precludes  the  em- 
ployment of  a  drill-steel  retained  as  an  integral  part  of  the 
machine  for  extracting  the  drill-steel  from  the  drill-hole.  The 
desirability  of  a  collar  or  lugs  at  the  base  of  the  shank  of  drill- 


STANDARDIZATION  OF  HAMMER-DRILLS  725 

steel  that  is  adapted  for  drifting,  sinking,  pop-holing,  drilling, 
etc.,  needs  no  comment ;  therefore,  as  a  suggestion  in  view  of 
simplifying  the  steel  equipment  of  the  mine  and  its  standard- 
ization that  the  same  %-UL  qua'rter-octagon,  collared  drill-steel 
recommended  for  other  machines  employed  for  sinking,  light 
drifting,  breast  stoping,  and  pop-hole  drilling  be  employed  for 
all  pneumatic  feed  stoping-drills. 

After  the  type  and  size  of  drill-steel  bar  and  its  shank  is 
settled  upon,  careful  consideration  should  be  given  to  the 
change  length  and  also  to  the  gauge  of  the  bit  for  the  different 
steels  that  comprise  a  set  to  drill  to  a  stated  depth,  it  is  rec- 
ommended that  a  nonhal  change  length  of  12  in.  be  adopted 
for  the  %-in-  collared  quarter-octagon  steel  as  applied  to 
machines  1,  2,  4,  5,  7,  and  8,  an  18-in.  change  length  for  the 
li/2-in.  cruciform,  twisted  solid  steel  as  applied  to  machine  3, 
and  a  24-in.  change  length  for  the  114 -in.  round,  hollow  lugged 
steel  as  applied  to  machine  6. 

Importance  of  the  Drill-Bit 

Very  often  one  of  the  biggest  'leaks'  in  a  mine  is  to  be  found 
in  the  cutting  end  of  the  drill-bit  and  as  this  is  the  'business' 
end  of  metal  mining  it  is  the  logical  starting  point  in  the  cam- 
paign to  raise  efficiency.  The  start  ^hould,  therefore,  be  made, 
first,  by  selecting  drill-steel  of  the  required  shape  and  quality 
for  the  work ;  secondly,  by  forging  the  bit  end  of  the  drill-steel 
to  the  required  shape;  and  thirdly,  by  subjecting  it  to  proper 
heat-treatment. 

Heretofore,  many  mine  operators  have  adopted  the  practice 
of  hiring  a  blacksmith  or  drill-sharpener,  bestowing  upon  him 
the  responsibility  of  keeping  the  mine  supplied  with  drill-steel 
and  have  trusted  to  the  'four-leaf  clover*  that  they  carry 
around  in  their  notebooks,  for  results.  Under  such  conditions 
they  usually  get  them,  but  they  are  not  as  a  rule  of  a  kind  that 
justify  the  signification  of  the  'four-leaf  clover.' 

The  material  from  which  the  drill-steel  is  made  should  be 
selected  to  meet  the  existing  conditions  of  the  work,  after 
which  the  selection  should  be  rigidly  adhered  to,  and  a  stand- 
ard method  of  procedure  adopted  for  working  it.  Metallurgy 
has  made  such  rapid  strides  that  it  is  now  a  comparatively 
simple  matter  to  secure  the  chemical  composition  and  physical 


726  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

characteristics  of  any  particular  kind  of  steel  which,  after 
being  determined,  should  be  used  as  the  basis  of  a  standard  set 
of  specifications.  There  is  nothing  more  disconcerting  to  the 
drill-steel  smith  than  to  be  forced  to  work  steel  of  varying 
chemical  composition  that  invariably  is  found  about  at  the 
mine  where  material  is  purchased  from  several  sources,  with 
no  more  rigid  specifications  than  the  mere  statement  that  hol- 
low or  solid  drill-steel  is  what  is  wanted. 

Sharpening  Drills  at  Correct  Heat 

After  the  material  is  standardized  for  the  work,  smiths 
should  be  taught  to  forge  the  material  at  a  safe  working  heat. 
All  blacksmiths  know  that  the  hotter  steel  is  heated  prepara- 
tory to  forging  the  earlier  will  be  the  work  of  hammering  it 
into  shape ;  while  but  few  realize  the  disastrous  effect  of  over- 
heating, which  is  detected  only  when  the  finished  drill-bit  is 
subjected  to  service  perhaps  in  an  inaccessible  working  place 
a  mile  or  two  underground  and  away  from  the  shop.  Then  it 
is  usually  the  steel  that  is  condemned  instead  of  the  real  cause 
of  trouble  being  determined  and  checked. 

The  next  important  lesson  that  the  blacksmith  should  be 
taught  is  the  fact  that  in  the  operation  of  tempering  or  heat- 
treating,  all  straight  carbon  drill-steel  should  be  quenched 
when  heated  to  the  criticai  point  regardless  of  the  method 
employed  for  drawing  the  temper.  It  is  called  the  critical 
point,  because  it  is  the  point  in  the  temperature  of  the  piece 
being  heated  at  which  a  change  takes  place  in  the  structure  of 
the  steel  due  to  the  carbon  being  dissolved.  It  is  the  point  be- 
low which  steel  will  not  harden  when  quenched,  and  by  coin- 
cidence it  is  the  point  at  which  the  steel  loses  its  magnetism. 

When  high,  straight  carbon-steel  is  heated  to  the  critical 
point,  and  cooled  rapidly  by  quenching  in  ice-cold  water,  maxi- 
mum hardness  and  density  is  obtained ;  and  it  must  be  remem- 
bered that  density  of  structure  is  equally  as  important  a 
factor  as  hardness  in  rendering  the  tool  both  shock  and  wear- 
resisting.  The  required  degree  of  toughness  is  secured  by 
varying  the  rate  of  cooling,  when  the  piece  is  quenched  at  the 
critical  temperature,  and  as  applied  to  the  cutting  point  of  the 
tool,  this  must  be  varied  to  suit  the  requirements  of  the  work. 

For  the  shank  or  striking-end  of  the  tool,  density  and  tough- 
ness are  more  to  be  desired  than  hardness,  so  for  general  work 


STANDARDIZATION   OF  HAMMER-DRILLS  727 

the  desired  result  may  be  secured  by  heating  to  the  critical 
temperature  the  entire  shank-end  for  a  short  distance  below 
the  collar  or  shoulder,  dipping  the  tip-end  in  cyanide  of  potas- 
sium and  then  quenching  in  oil,  allowing  it  to  remain  there 
until  cool. 

Effect  of  Over-Heating  Steel 

Let  us  consider  the  resultant  effect  of  operating  on  a  drill- 
steel  that  has  been  injured  in  the  smith's  shop.  Regardless  of 
whether  it  has  been  over-heated  preparatory  to  forging,  over- 
heated preparatory  to  quenching,  or  quenched  at  too  low  a 
heat,  the  general  result  is  the  same.  The  cutting  end  of  the 
tool  is  rapidly  dulled  in  service,  due  to  the  absence  of  wear- 
resisting  qualities.  It  loses  its  ability  to  penetrate  the  rock 
when  struck,  so  that  the  shock  must  of  necessity  be  absorbed 
in  the  steel  itself,  or  transmitted  back  to  the  actuating  engine. 
The  effect  of  continued  hammering  with  a  dulled  cutting  tool 
upon  the  rock  is  exactly  the  same  as  that  of  operating  against 
an  impenetrable  substance  such  as  a  hardened  anvil.  Minute 
fatigue-checks  are  established  throughout  the  length  of  the 
drill,  and  as  the  strength  of  a  chain  is  determined  by  its  weak- 
est link,  the  ability  of  a  piece  of  steel  to  withstand  vibratory 
shock  is  determined  by  its  weakest  point.  It  is  at  this  point 
that  one  at  least  of  the  fatigue-checks  will  have  been  estab- 
lished. Initially,  it  may  be  so  small  as  to  be  hardly  detectable 
by  the  naked  eye,  but  with  continued  operation  it  gradually 
grows  larger  by  assuming  a  semi-circular  or  arc-shaped  ap- 
pearance, extending  into  the  body  of  the  material.  As  this 
check  enlarges  it  is  caused  to  open  and  shut  as  the  vibratory 
stresses  to  which  the  cutting  tool  is  subjected  affect  it.  Even- 
tually, the  steel  or  cutting  tool  is  broken  apart  with  the  balance 
of  the  section,  disclosing  a  good,  clear  fracture  of  the  metal  in 
its  original  condition. 

Unfortunately  the  effect  of  the  abuse  to  which  the  drill-steel 
or  cutting  tool  is  subjected,  does  not  as  a  rule  end  with  the 
initial  fracture  of  the  bar.  When  a  drill-steel  breaks  apart  in 
service,  the  shorter  end  only  is  as  a  rule  discarded  and  the 
longer  is  set  aside  to  be  either  re-shanked  or  re-sharpened  at 
the  convenience  of  the  drill-steel  smith.  A  defective  piece  of 
steel  is  thus  again  put  in  commission,  and  often  is  broken  again 
in  service  before  it  is  subjected  to  undue  shock. 


728  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

The  effect  of  operating  on  a  dulled  drill-bit  is  not  confined  to 
the  cutting  tool,  for  it  must  be  remembered  that  the  cushioning 
effect  due  to  the  penetration  of  the  chisel  in  the  material 
worked  upon,  alone  makes  possible  the  successful  operation  of 
every  part  comprised  in  the  make-up  of  the  rock-drilling 
engine. 

Standardization  of  Hose  and  Hose  Fittings 

It  is  recommended  that  the  inside  diameter,  outside  diameter, 
length,  and  type  of  hose  employed  for  supplying  the  rock-drill 
with  air  and  water  under  pressure  should  be  standardized,  and 
the  following  suggestions  are  advanced  with  this  in  view. 

For  the  air  supply  of  machines  1,  2,  3,  4,  5,  7,  and  8, 
%-in.  plain  pneumatic  hose,  without  wire  winding. 

For  the  air  supply  of  machine  6,  a  1-in.  plain  pneumatic 
air  hose  without  wire  winding. 

The  length  of  all  air-supply  hose  to  be  50  feet. 
For  the  water  supply  of  all  machines  Vo-in.  half  round 
wire-wound  hose. 

The  length  of  water  hose  to  be  25  feet. 
My  suggestions  relative  to  the  standardization  of  hose  fit- 
tings for  hammer  rock-drill  service  were   embodied   in   an 
article  that  was  published  in  the  Engineering  and  Mining 
Journal  of  June  5,  1920. 

Standardization  of  Mining  Columns  for  Hammer  Rock-Drills 

Of  the  hammer  rock-drills  recommended,  two  only  require 
mountings,  namely,  5  and  6.  In  order  to  keep  the  saddle 
of  the  mining  columns  limited  to  two  sizes,  and  incidentally 
provide  the  required  strength  of  column  for  the  varying  condi- 
tions of  use,  the  following  is  recommended : 

For  machine  5,  a  2^-m.  single-screw  column  with 
21/2-hi.  arm  when  single  drill  is  employed,  and  3-in.  double- 
screw  column  with  2!/2-in.  arms  when  two  drills  are  used 
on  the  same  column. 

For  machine  6,  single-screw  column  with  SV^-in.  arm 
when  single  drill  is  employed,  and  4-in.  double-screw 
column  with  3!/2-in.  arms  when  two  drills  are  used  on  the 
same  column. 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  729 


PRELIMINARY    INVESTIGATION    ON   THE    STANDARDIZA- 
TION OF  DRILLING-MACHINES  AND  DRILL-STEEL 

Prepared   Under  the  Direction  of  ARTHUR  NOTMAN,  Superintendent^ 
Mine  Department,  Copper  Queen  Branch,  Phelps  Dodge  Corpo- 
ration, Bisbee,  Ariz.     (Member  of  the  Sub-Committee  on 
Drilling-Machines  and  Drill-Steel).* 

Standardization  of  Rock-Drill  Fittings 

interchangeable  between  many  of  the  machines  of  the  manu- 
facturer, but  also  to  have  the  rock-drill  companies  adopt  the 
same  specifications  in  making  these  minor  parts.  At  the 
present  time  this  condition  is  far  from  realization. 

For  example:  in  the  case  of  water  and  air  spuds,  the  only 
course  for  a  large  mining  company  to  pursue  today  is  to  accept 
the  product  of  one  manufacturer  as  the  standard.  .This  means 
scrapping  the  spuds  on  many  of  the  newly-purchased  ma- 
chines. Though  such  a  standard  has  been  adopted  at  the  Cop- 
per Queen  Branch  of  the  Phelps  Dodge  Corporation,  it  re- 
quires three  sizes  of  water  spuds  to  fit  out  the  three  types  of 
Ingersoll-Rand  machines  in  use.  They  must  be  machined 
down  or  bushed  up  to  fit  other  makes.  A  change  in  this  condi- 
tion would  greatly  benefit  mining  companies,  and  it  would 
work  no  hardship  upon  rock-drill  manufacturers. 

The  following  discussion  is  based  upon  the  principle  that 
differences  in  the  sizes  of  bolts,  nuts,  and  spuds  should  be 
reduced  to  a  minimum.  It  is  important  that  as  few  wrenches 
as  possible  be  needed  to  operate  the  machine.  The  more 
wrenches  required,  the  greater  will  be  the  chance  of  losing 
them  underground,  as  well  as  loss  of  time  on  the  part  of  the 
miner  in  operating  the  machine.  It  must  be  realized  that  in 
drifting,  only  about  30%  of  what  is  charged  as  drilling  time 
is  actually  spent  with  the  bit  hitting  the  face.  Through 
standardization,  the  operating  efficiency  should  be  slightly 


*This  report,  according  to  Mr.  Mitke,  must  in  no  way  be  considered 
as  the  report  of  the  Sub-Committee  on  drilling  machines  and  drill-steel, 
but  are  merely  the  individual  views  of  two  members  of  the  Committee, 
and  as  such  contain  much  valuable  data.  Mr.  Braly,  Chairman  of  the 
Committee,  reported  that  while  considerable  work  had  already  been  accom- 
plished, the  Committee,  as  a  whole,  was  not  yet  ready  to  submit  a  report. 


730  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

increased.     An  additional  advantage  would  be  the  reduction  in 
the  number  of  repair  parts  to  be  carried. 

The  chuck-wrench  is  the  chief  tool  used  in  operating  drift- 
ing machines.  As  many  nuts  should  fit  this  wrench  as  is  prac- 
tical. The  monkey-wrench  should  be  eliminated,  because  it 
is  expensive  and  unsatisfactory.  It  must  be  admitted  that 
it  is  a  very  handy  tool,  but  underground  conditions  cause  rust 
to  ruin  the  threads  long  before  actual  hard  usage  would  neces- 
sitate scrapping.  Stillson  wrenches  are  too  valuable  for  other 
purposes  to  remain  long  on  the  job,  unless  owned  by  the  oper- 
ator, and  are  also  subject  to  damage  from  corrosive  water. 

While  many  of  the  following  suggestions  may  seem  radical, 
they  are  offered  in  the  hope  that  they  will  help  to  bring  about 
a  much-needed  standardization. 

Suggested  Improvements  in  Machine-Drills 

(1)  Larger  oil  reservoirs,  if  practical,  would  reduce  trou- 
bles due  to  lack  of  lubrication  by  lessening  the  responsibility 
of  the  operator  in  this  regard.     At  present,  the  tendency  of 
rock-drill  manufacturers  seems  to  be  to  make  the  lubricators 
too  small. 

(2)  Some  of  the  latest  type  rock-drills  call  for  both  grease 
and  oil.    Requiring  two  kinds  of  lubricant  is  a  disadvantage, 
as  it  adds  one  more  duty  to  the  miner.    In  the  past,  the  drill- 
runner  has  not  proved  himself  able  to  handle  even  one  oil-can, 
to  say  nothing  of  two. 

(3)  With  the  introduction  of  wet  machines,  the  tendency 
has  been  to  develop  drifting  rounds  with  an  increased  num- 
ber of  upper  holes.     In  the  Copper  Queen  mines,  practically 
all  of  the  drifting  is  done  with  the  standard  V-cut  round,  using 
either  16  or  13  holes.     About  85%  of  the  drifts  require  16 
holes  to  break  the  ground.     The  16  and  13-hole  rounds  have 
9  and  7  holes,  respectively,  drilled  from  under  the  arm.    This 
means  that  plugs  in  the  lubricators  should  be  so  placed  as  to 
allow  filling  when  the  machine  is  in  either  the  over  or  the 
under-arm  position.     It  is  acknowledged  that  doubling  the 
number  of  plugs  doubles  the  chances  of  their  working  loose 
and  getting  lost.    To  place  the  extra  oil-plugs  properly  will 
require  a  slight  extension  of  the  lubricator  costings. 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  731 

« 

(I  wish  to  make  no  apology  for  any  attempt  to  show  drill 
manufacturers  how  to  change  their  design,  or  to  do  any  of 
these  things,  because  I  do  not  pretend  to  know.  This  is  merely 
offered  as  a  suggestion  and  without  any  right  of  opinion  in 
the  matter.) 

Lubrication 

The  under  oil-plugs  should  be  on  the  opposite  side  of  the 
rock-drill  from  the  hose  connections.  In  any  event,  some 
means  should  be  devised  for  lubricating  the  machine  in  this 
position. 

Under  present  conditions,  what  little  oil  a  drifter  gets  when 
it  is  under  the  arms,  comes  through  the  hose,  as  few  men  will 
take  the  time  or  trouble  to  lessen  the  clamps  and  'dump  over' 
their  machine  to  permit  filling  the  lubricators.  Even  to  oil 
through  the  hose  means  two  trips  to  the  air  head,  which  gener- 
ally results  in  the  machines  running  dry  most  of  the  time. 
The  under-arnr  position  comes  in  the  last  half  of  the  shift, 
when  time  is  inclined  to  be  short,  and  lubrication  is  forgotten 
as  long  as  the  piston  moves.  It  is  unnecessary  to  more  than 
mention  the  fact  that  sufficient  lubrication  is  very  necessary 
with  the  modern  high-speed  machines. 

To  comply  with  the  safety  regulations,  the  stoper  handles 
should  point  down;  the  end  of  the  handle  can  be  enlarged  to 
form  a  rest  for  the  driller's  hand.  If  the  handle  must  extend 
upward,  it  should  be  bent  to  extend  over  the  arm.  In  this 
case,  the  handle  length  must  be  somewhat  greater  than  the 
average  width  of  a  man's  hand. 

The  position  of  the  stoper  handle  leads  up  to  the  location 
of  the  oil-plugs.  At  present,  the  usual  place  for  the  plugs  is 
at  the  end  of  either  the  arm  or  handle.  All  oil-plugs  should 
be  placed  in  such  a  position  as  to  allow  filling  of  the  lubrica- 
tors when  the  stoper  is  in  the  running  position.  This  would 
ensure  more  frequent  oiling.  The  necessity  of  having  to  lay 
the  stoper  on  its  side,  or  turn  it  upside  down,  to  fill  the  oil-cups, 
does  not  work  toward  sufficient  machine  lubrication. 

With  some  of  the  new  mechanically  rotated  stopers,  the  for- 
ward oiling  or  greasing  point  is  in  no  sense  an  oil  reservoir. 
The  opening  is  really  nothing  but  a  hole  into  the  machine,  and 
it  is  valueless  as  regards  lubrication. 


732  PROCEEDINGS  OP  AMERICAN  MINING   CONGRESS 

Position  of  Fittings 

(4)  Some  of  the  self -rotating  stopers  exhaust  at  right 
angles  to  the  machines.    Not  confining  the  exhaust  to  a  breech- 
ing reduces  the  back  pressure  and  the  tendency  to  freeze. 

The  direct  exhaust  certainly  is  a  mechanical  advantage, 
but  on  the  other  hand,  it  is  a  handicap  to  the  drill-runner,  who 
must  keep  his  light  from  being  blown  out.  From  the  miner's 
point  of  view,  the  exhaust  along  the  feed  cylinder  is  the  most 
satisfactory.  However,  side  exhaust  on  a  self-rotator  is  not 
as  objectionable  as  it  should  be  on  a  'wiggletail.' 

(5)  It  is  possible  that  it  might  be  more  satisfactory  to  dis- 
regard the  oil  reservoirs  on  the  plugger-drills  and  go  back  to 
the  lubricating  throttle-valves.    This  will  depend  on  the  capac- 
ity of  the  machine  oil-cups  and  the  cost  of  the  valves. 

(6)  On  the  drifters,  the  air  and  water  connections  should 
be  on  the  same  side  of  the  back  head,  and  yet  not  interfere 
with  removing  the  side-rod.     Probably  it  is  better  to  have 
the  connections  on  the  right  (exhaust)  side  of  the  machine. 

If  one  connection  is  made  through  the  rear  of  the  back 
head,  the  hose  gets  in  the  way  of  the  crank-handle  when  chang- 
ing steel.  If  the  hose  connections  are  on  opposite  sides,  they 
interfere  with  moving  close  to  the  column  to  drill  the  center- 
line  holes. 

The  question  of  which  side  both  the  spuds  should  be  on  is 
somewhat  a  matter  of  choice,  depending  upon  the  shape  of  the 
back  of  the  drift,  and  whether  the  operator  is  right  or  left- 
handed.  This  is  the  case  since  the  side  next  to  the  column, 
when  the  machine  is  over  the  arm,  is  the  far  side  when  the 
machine  is  under  the  arm.  When  possible,  it  is  better  to.  col- 
lar the  top  center-line  holes  on  center  and  swing  the  lower 
ones  to  bring  their  bottoms  on  line. 

Design  of  Chuck- Wrenches 

(7)  It  is  essential  to  have  a  chuck- wrench  that  fits  all  of 
the  frequently  used  nuts  and  fittings  about  the  drill  which  are 
used  in  rotative  operations.    Those  parts  are  the  nuts  on  the 
arm,  collar,  clamp,  and  swing  bolts.    It  is  also  important  that 
the  small  end  of  the  chuck-wrench  should  fit  the  water  con- 
nection nut,  oil-plugs,  and  the  back-head  cap.     This  wrench 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  733 

should  be  double-ended  and  of  proper  design.  The  weight  of 
the  wreifch  should  be  between,  S1/^  and  7  Ibs.,  and  it  should  be 
strong  enough  to  withstand  being  used  as  a  hammer.  Pound- 
ing of  the  machine  should  not  be  tolerated,  but  the  compromise 
of  occasionally  hitting  the  drill-steel  seems  to  be  a  necessary 
evil.  A  chuck-wrench  with  jaw  openings  of  1%  and  l%e  in. 
has  proved  satisfactory  in  the  Copper  Queen  mines. 

If  the  chuck-wrench  had  attached  to  it  a  short  chain  with 
a  thin  ring  over  the  swing  or  arm-bolts,  it  would  help  increase 
efficiency  when  drilling  over  the  arm.  The  chain  must  be 
attached  to  the  wrench  by  a  sliding  link ;  the  ring  to  hang  on 
the  bolts  should  be  2  inches  in  diameter. 

(8)  To  move  the  smaller  nuts  about  the  drifters,  at  least 
one  other  two-ended  wrench  will  be  required.  These  two 
will  be  all  that  are  needed,  if  the  %-in.  valve-chest  and  side- 
rod  bolts  can  be  eliminated  from  a  few  types  of  machines. 
It  may  be  that  the  miner  will  have  but  little  need  of  the  smaller 
wrench,  except  occasionally  to  tighten  the  side-rods  of  certain 
types  of  drills.  If  it  were  possible  to  handle  the  side-rods  with 
the  chuck-wrench  it  would  be  a  big  advantage.  Perhaps  this 
can  be  done  by  locking  the  side-rod  nut  instead  of  the  bolt,  and 
enlarging  the  bolt-head  to  fit  the  small  end  of  the  wrench. 
With  some  machines,  the  bolt-head  is  in  too  tight  a  place  to 
permit  turning  with  chuck-wrench.  Even  then  nothing 
would  prevent  the  use  of  the  enlarged  bolt-head,  though  the 
small  wrench  would  have  to  be  used  on  the  nuts. 

It  may  be  possible  to  combine  the  box-wrench  with  either  of 
the  two  double  wrenches,  by  placing  it  between  the  jaws  to  be 
used  in  withdrawing  the  steel  from  the  hole. 

Bolts  and  Threads 

In  the  suggestions  that  follow,  all  bolts  referred  to  should 
have  U.  S.  Standard  bolt  threads.  For  various  bolt  dimen- 
sions, the  table  given  below  lists  the  thread  per  inch  and  the 
width  in  inches,  across  the  flats  of  hexagon  and  square  nuts, 
according  to  U.  S.  Standards. 


734  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

Width    across 

flats    of    hexagon  Width   across   flats 

Diameter  of  Threads  and  square  nuts,  of  hexagon   nuts, 

bolt—  inches  per  inch  inches—rough  inches—  finished 


1V8  7  li%6  1% 

1  8 

%  9  IT/16  1% 

%  10  1%  1%6 

%  11  1%6  1 

y2  is  %  % 

14  25/32  2%2 

n/l6  % 

20  I//2  7/162 

BRIGGS  PIPE-THREADS 

Pipe  diameter—  Threads 

inches  per  inch 

%  18 

1/2  and  %  14 


1  to  2  11% 

The  taper  of  threads  is   %  inch  per  foot 

As  to  the  shape  of  nuts  used,  the  square  ones  are  more  dur- 
able and,  when  practical,  should  be  adopted  as  standard.  If 
necessary,  the  square  nut  can  always  be  replaced  by  the  hexa- 
gon, except  in  a  few  cases,  such  as  on  the  arms,  clamp,  swing, 
and  a  few  other  bolts. 

Water-Hose  Connection 

The  same  size  water-spud  should  fit  all  machines.  A  stand- 
ard pipe-thread  should  be  on  the  machine  side  of  the  spud. 
The  connection  with  the  water-hose  should  be  made  with  par- 
allel threads  on  account  of  excessive  wear  due  to  frequent 
breaking  of  connection.  The  head  on  the  water-spuds  might 
be  round  to  prevent  unnecessary  tinkering  with  it  by  the 
machine-man. 

The  nut  to  fit  the  water-spud  should  be  of  hexagon  shape 
and  1%  in.  across  flats.  It  is  very  important  that  this  nut 
should  fit  the  small  end  of  the  chuck-wrench. 

In  practice,  the  water-spuds  seem  to  wear  out  long  before 
the  nuts.  The  nut  should  be  made  of  the  softer  material  as  it 
should  be  the  first  to  need  replacing.  The  spud,  while  easier 
to  change,  is  the  more  expensive. 

Table  No.  1  gives  some  data  on  the  water-spuds  and  nuts 
that  are  now  on  hand. 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  735 


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736  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

Each  of  the  six  spuds  listed  above  are  different  in  detail. 
As  stated  before,  it  takes  three  sizes  of  I.-R.  water-spuds  to  rig 
out  the  various  types  of  I.-R.  machines  alone  in  use  in  the  Cop- 
per Queen  mines.  Only  the  Sullivan  water-spud  nut  fits  the 
chuck-wrench.  For  convenience,  the  I.-R.  has  been  adopted  as 
standard,  but  must  be  machined  down  or  bushed  up  to  fit  other 
makes. 

Water-Needle  Connection 

It  is  often  a  hard  job  to  remove  the  back-head  cap  with  a 
monkey-wrench.  The  cap  should  be  haxagon  shaped  and  iy± 
in.  across  flats.  This  size  cap  can  be  handled  by  the  small  end 
of  the  chuck-wrench.  The  same  size  back-head  cap  and  plug 
should  be  on  the  drifters,  pluggers,  and  even  the  stopers,  when 
the  needle  is  held  in  place  by  the  cap  and  plug  method.  The 
plugger  handle  standards  should  be  wide  enough  to  permit  the 
use  of  the  chuck- wrench  on  -the  back-head  cap. 

The  head  of  the  back-head  plug  should  be  so  shaped  as  to  fit 
the  %-in.  bolt  end  of  the  small  nut-wrench. 

The  combined  back-head  plug  and  cap  is  an  improvement 
over  the  two  separate  fittings.  The  threads  on  the  back-head 
cap  and  plug  need  not  necessarily  be  standard  ones. 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  737 


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738  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

Of  the  above  listed  back-head  caps  those  on  the  Waugh 
Turbro,  DX  61,  550  D,  and  the  Jackhamer,  will  fit  the  small 
end  of  the  chuck-wrench.  The  B.  H.  plugs  on  the  550  D  and 
the  Jackhamer  could  be  handled  with  the  %-in.  bolt-wrench. 
The  148  and  18  Leyner  back-head  plugs  are  the  same  and  those 
on  the  550  D  and  Jackhamer  are  alike. 

No  doubt  these  important  parts  can  be  standardized.  Sim- 
ilarly, of  the  nine  water-needle  connections  examined,  those  on 
the  18  and  148  Leyners  are  the  same  and  those  on  the  550  D 
and  Jackhamer  drill. 

Oil-Plugs 

One  of  the  features  of  an  ideal  oil-plug  is  that  it  will  not 
shake  loose  with  the  vibration  of  the  machine.  The  diamete 
of  the  plugs  should  probably  be  about  %  in.  Standard  bolt- 
threads  will  hardly  do  for  the  plugs.  Whether  the  threadr 
should  be  tapered  or  parallel,  is  perhaps  a  matter  not  fully  de- 
termined. The  coarse  threads  seem  to  have  gained  more  favor 
here  than  the  fine  ones.  If  the  oil-plugs  that  have  the  eight 
parallel  threads  per  inch  had  a  split-lock  washer  hold  between 
the  threads  and  head  they  might  prove  efficient.  The  leather 
gaskets  cause  the  plugs  to  hold,  but  as  they  fit  tightly  when 
new  and  are  difficult  to  put  in  place,  it  is  impossible  to  get  the 
drill-runners  to  use  them.  A  lubricator  plug  that  would  re- 
quire only  hand  tightening  would  be  a  big  improvement. 

One  size  of  oil-plug  can  be  made  to  do  for  the  drifters, 
stopers  and  pluggers. 

The  lubricator  plugs  should  be  handled  by  the  small  end  of 
the  chuck-wrench. 

A  hexagon-shaped  head  1%  in.  across  flats  would  fit  the 
chuck-wrench,  and  yet  take  no  more  room  than  the  plugs  now 
used  on  the  I.-R.  drifters.  The  present  form  of  head  with  the 
hole  affords  a  means  of  strapping  the  plug  to  the  drill.  If  the 
hole  is  necessary,  both  the  hexagon  and  present  type  of  head 
can  be  combined. 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  739 

TABLE  No.  3 

OIL-PLUG  DATA 
:         Plug  Width 

diameter—  of  head- 
Machine                           inches                      Threads  per  inch  inches 

DX  61  %  18— Taper 

Turbro  %  12 — Parallel 

18  Leyner  %  12 — Parallel                             % 

550  D  %  12— Parallel                       %  and  ^ 

148  Leyner  %  12 — Parallel 

CC  II  1  14— Parallel 

71  %          18— Taper  (Special  Bushing) 

DP  33  %  18— Taper 

NRW  93  %  18— Taper 

BCRW  430  %  12— Parallel 

Clipper  %  18— Taper 

The  above  figures  show  that  there  are  listed  three  sizes  of 
Ingersoll-Rand  plugs.  The  Sullivan  and  Waugh  reservoir 
plugs  are  interchangeable. 

Hose  Clamp-Bolts 

The  sizes  of  the  bolts  and  nuts  now  furnished  with  the  hose 
clamps  are: 

DIXON  HOSE  CLAMPS 

Hose—  Bolt—  Nut  across 

inches  inches  Nut  flats— inches 

1  %6by2  Square  2%2  finished 

%  %byl%  Square  %  finished 

%  %6byl^i  Square  i%2  finished 

SULLIVAN  HOSE  CLAMPS 

Hose—  Bolt—  Nut  across 

inches                           inches  Nut  flats— inches    (hex.) 

1  %  by  2%  Hexagon                  i^6  rough 

%  %  by  1%  Square                    i}46  rough 

.«     %  %byl%  Square                   ii^6  rough 

With  the  Sullivan  clamps,  two  lengths  of  bolts  are  needed  for 
the  three  sizes  of  hose.  The  Dixon  make  calls  for  three  dif- 
ferent bolts  varying  in  both  diameter  and  length. 

The  hose-clamps  should  be  so  made  that  one  size  of  bolt  will 
do  for  the  three  hoses.  When  the  clamp  is  in  place  on  the  hose, 
the  end  of  the  bolts  should  not  project  more  than  %-inch  be- 
yond the  top  of  the  nut.  A  bolt  that  is  a  little  long  for  the 
smaller  clamps  could  be  easily  cut  off  after  being  put  in  place 
on  the  hose, 


740  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

It  is  recommended  that  the  clamps  for  1,  %,  and  %-in. 
hoses  be  designed  to  use  %  by  2-in.  bolts  with  square  nuts.  If 
this  is  done,  the  hose-clamps,  crank,  and  throttle-bolts  will  be 
the  same. 

Drill-Column 

The  SVa-iii.  drill-column  seems  to  be  large  enough  for  any 
one-man  drill.  For  the  drifters,  the  double-  jack  column  is 
preferred.  The  3-in.  mounting  would  do  for  the  mounted 
plugger-machines. 

The  details  of  the  connection  between  the  column-pipe  and 
cross-bar  should  be  standardized. 

The  3%-in.  double-jack  column  is  the  only  one  in  use  in  the 
Copper  Queen  mines. 

35/2-Inch  Column 

The  jack-screws  and  nuts  should  be  of  some  accepted  de- 
sign and  size.  The  details  of  the  jack-screws  used  in  the  Cop- 
per Queen  mines  are  square  threads,  with  3  threads  per  inch, 
and  the  diameter  of  jack-screw  of  1%  inches. 

The  holes  in  the  screw-heads  should  be  not  less  than  1  inch 
in  diameter. 

The  cross-bar  must  be  long  enough  to  allow  the  arm  and 
safety-collar  to  pass  between  the  jack-screws  and  column-pipe. 

The  bolts  that  clamp  the  pipe  to  the  cross-bar  should  be  the 
same  size  as  the  safety  collar-bolts,  that  is,  %  by  5  in.,  with 
the  regular  square-shaped  nut. 

3»/2-Inch  Arm 


The  arm-bolts  should  be  IVs  by  6*4  in.,  with  square  nuts. 
The  bolts  now  used  on  the  arm  have  the  regular  square  head. 

3!/2-Inch  Clamp 

The  5-in.  cone  should  be  taken  as  standard.    The  bolts  now 
used  with  the  I-R  clamps  are: 

Clamp  1%  by  6%  in.          Square   head       Extra  long  sq.   nut 

Clamp  1%  by  6  in.  Bevel  head        Extra  long  sq.  nut 

Swing  %  by  4  in.  Bevel  head      Sq.  nut  1%  in-  across 

flats 
Jaw-bolt  %  by  3%  in.  %  hexagon  nut 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  741 

For  the  sake  of  standardization,  if  the  bevel  head-bolt  is 
sufficiently  strong,  the  arm  and  clamp-bolts  can  all  be  of  the 
bevel-head  type — 1%  by  6%  in.  The  extra  long  nut  is  nec- 
essary for  strength  to  provide  a  wide  seat  for  the  large  end 
of  the  chuck-wrench. 

The  swing-bolt  nut  now  in  use  is  a  special  nut  1*4  in.  across 
the  flats,  and  therefore  takes  the  small  end  of  the  chuck- 
wrench.  If  the  width  across  the  flats  of  this  nut  were  in- 
creased to  fit  the  large  end  of  the  wrench,  it  would  no  longer 
require  both  ends  of  the  wrench  to  handle  the  swing  and  clamp. 
The  thickness  of  this  nut  should  be  between  1  and  114  inches. 

3'/2-Inch  Safety  Collar 

The  safety  collar  bolts  should  be  %  by  5  in.,  and  inter- 
changeable with  the  column  cross-bar  bolts.  The  nuts  should 
probably  be  the  standard  square  ones.  A  larger  nut  to  fit  the 
big  end  of  the  chuck-wrench  would  mean  another  special,  and 
would  necessitate  a  shoulder  on  the  collar  casting;  otherwise 
it  would  be  an  improvement. 

Drifter  Cradle 

Some  standard  shape  regarding  depth,  width,  length,  and 
distance  between  standard  rod  centers,  guide-slide  dimensions, 
etc.,  should  be  adopted.  It  is  possible  that  there  should  be  two 
standard  shells — the  narrower  and  lighter  one  being  used  with 
the  smaller  machines. 

The  adjustable  guide-slide,  with  'shims'  to  take  care  of 
wear,  offers  advantages.  Instead  of  having  the  caps  bolted  on, 
would  it  not  be  better  to  replace  the  bolts  with  rivets  ? 

The  ends  of  the  shell  need  to  be  reversible  as  regards  the 
position  of  the  crank. 

Table  No.  4  gives  some  information  regarding  a  few  of  the 
shell  castings  now  in  use. 


742  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 


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STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  743 

The  above  data  shows  that  the  shell  castings  of  the  Waugh 
Plugger  and  Clipper,  the  18  £nd  248  Leyners,  and  the  550  D 
and  148  Leyners  are  the  same.  In  the  nine  shell  castings  ex- 
amined, there  are  six  different  ones. 

Standard  Rods 

There  probably  should  be  two  standard  lengths  of  cradle 
standard  rods.  The  length  of  rod  will  vary  with  the  length  of 
steel  change.  The  diameter  of  the  standard  rods  should  be 
%  in. ;  square  hexagon  nuts  should  be  on  the  cross-head  end. 

If  the  side  and  cradle  standard  rods  can  be  made,  to  some 
extent,  interchangeable,  the  standard  rods  should  be  threaded 
on  one  end;  if  not  interchangeable,  the  standard  rods  should 
be  threaded  on  both  ends. 

If  the  standard  rods  are  to  be  made  interchangeable,  they 
should  be  of  the  same  material  and  given  the  same  treatment 
in  manufacturing  as  the  side-rods.  The  advantage  of  having 
these  two  parts  the  same  is  that  it  makes  one  less  rod  to  order 
and  carry  in  stock. 

Table  No.  5  gives  some  data  pertaining  to  the  standard  rods 
on  several  makes  of  cradles. 

The  above  figures  show  no  reason  why  the  standard  rods 
cannot  be  easily  standardized.  With  the  exception  of  the 
DX  61  cradle,  the  maximum  difference  in  length  of  the  stand- 
ards is  5  in.  The  DX  61  rod  extends  along  the  entire  length 
of  the  shell  casting. 

Feed-Screws 

The  details  of  the  feed-screw  such  as  the  diameter,  pitch, 
depth,  and  type  of  threads,  diameter  of  the  shafting  at  the 
forward  and  cross-head  support,  and  diameter  and  pitch  of 
the  threads  at  the  crank  connection,  should  all  be  standard- 
ized. There  must  be  about  three  standard  lengths  to  corre- 
spond with  the  lengths  of  shell  standard  rods. 

In  regard  to  the  kind  of  threads,  both  the  V  and  square  type 
have  their  advantages.  Either  form  could  be  accepted  as 
standard.  The  square  threads  check  more  easily  and  there- 
fore develop  less  vibration  on  the  crank-handle.  However,  the 
square  threads  finally  wear  to  the  V  shape  and  are  more  easily 
stripped. 


744  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


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STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  745 

The  double-threaded  screw,  with  two  threads  per  inch,  seems 
to  be  in  general  use.  Table  No.  6  shows  the  diameter  of  the 
feed-screw  threads  in  the  nine  cradles  examined  to  vary  be- 
tween 1  and  1%2  inches. 

The  above  figures  show  that  in  examining  the  nine  feed- 
screws listed,  there  are  two  types  of  threads,  three  different 
diameters  of  screws,  three  depths  of  threads,  six  lengths,  five 
different  sizes  of  shafting  at  the  forward  support,  and  two 
different  pitches  of  threads  at  the  crank  connection.  In  all 
nine  sizes,  the  diameters  of  the  shaft  at  the  cross-head  bearing 
and  crank  connection  are  1  inch.  With  the  exception  of  the 
Ingersoll-Rand  plugger  cradle  screw,  all  the  others  are  nearly 
the  same  in  detail.  There  are  six  different  feed-screws  out  of 
a  total  of  nine. 

All  the  figures  given  in  Table  No.  6  may  not  be  exactly  cor- 
rect, as  some  of  the  parts  measured  were  not  new,  and  wear 
may  have  developed. 

It  is  recommended,  as  mentioned  before,  that  there  be  three 
standard  lengths  of  feed-screws  and  that  the  type,  pitch,  and 
depth  of  threads  be  also  standardized.  The  diameter  of  the 
front  support  shafting  should  be  fixed  between  %  and  %  in. 
The  specifications  should  call  for  the  feed-screw  shaft  to  be  1 
inch  diameter  at  the  cross-head  and  at  the  crank  connection. 
The  threads  to  the  crank  should  be  the  standard  U.  S.  bolt 
threads,  which  are  eight  per  inch. 

Forward  Feed-Screw  Support 

Either  the  horizontal  or  vertical  type  can  be  accepted  as 
the  standard  form  of  support.  It  should  be  made  according 
to  the  assumed  standard  specifications  regarding  size  of  bolts, 
shape  of  nuts,  total  length,  and  height  of  bearing  above  the 
shell  bottom.  Table  No.  4  gives  some  information  of  these 
details.  Of  the  nine  cradles  examined,  there  are  six  supports 
that  differ  slightly  in  construction. 

Regardless  of  which  type  of  support  is  taken  as  the  standard 
form,  the  bearing  for  the  feed-screw  shaft  should  be  open  at 
both  ends.  The  bolts  needed  to  hold  the  support  to  the  shell 
casting  should  be  %  in.  diameter,  with  square  nuts. 


746  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

If  this  fitting  is  necessary,  it  might  be  an  improvement  if  it 
were  riveted  instead  of  bolted  to  the  shell.  At  the  Copper 
Queen  mines,  this  part  of  the  cradle  does  not  last  very  long, 
as  it  is  taken  off  by  the  drill-runner  during  the  first  shift. 

Cross-Head 

The  cross-head  should  be  made  according  to  some  accepted 
standard  regarding  thickness,  diameter  of  bearing  for  feed- 
screw shaft,  and  distance  between  holes  for  standard  rods. 

Crank,  Crank  and  Throttle-Handle  Bolts 

The  actual  shape  of  the  crank  and  handle  makes  but  little 
difference. 

The  threads  to  fit  the  1-inch  feed-screw  shafting  should  be 
the  standard  of  eight  per  inch.  The  feed-screw  connection 
should  be  open  at  both  ends. 

Table  No.  7  gives  some  data  on  the  types  and  sizes  of  crank 
and  throttle  bolts  now  in  use. 

This  table  shows  that  each  drill  manufacturer  uses  a  dif- 
ferent size  of  crank-bolt;  out  of  eight  throttle-handle  bolts, 
three  are  alike. 

From  the  above  table,  it  looks  as  if  the  throttle  handle  and 
crank-bolt  could  be  standardized  and  made  interchangeable. 
While  the  heavier  crank-bolts  with  the  special  threaded  heads 
may  have  their  advantages,  yet  the  %-in.  bolt  on  the  Waugh 
Turbro  crank  seems  to  answer  all  purposes.  It  is  suggested 
that  the  standard  throttle  and  crank-bolt  should  be  %  by  2  in., 
with  square-shaped  nuts. 

Phigger-Cradle 

If  the  plugger  machine  is  the  regular  form  of  shell  plus  a 
mounting  slide,  the  cradle  itself  should  coincide  with  one  of 
the  standard  drifter  cradles.  The  diameter  of  the  bolts  that 
help  to  form  the  forward  and  rear  mounting  slide  clamps, 
should  be  %  inch. 

If  the  plugger-cradle  is  of  the  slide-extension  type,  the  feed- 
screw should  be  the  shortest  adopted  length  of  the  standard 
feed-screw.  The  forward  and  rear  clamp-bolts  should  be  the 
same  size  (%-in.  diam.),  as  the  corresponding  bolts  on  the 


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other  type  of  plugger  machine  cradle.     The  slide-bolt  should 
be  the  standard  %-in.  bolt  with  a  square  nut. 

It  would  make  one  less  part  to  order,  if  the  %-in.  slide  and 
safety  collar-bolts  were  of  the  same  length.  At  present  the 
slide-bolt  is  2Va  in.  the  longer. 

Table  No.  8  shows  some  figures  pertaining  to  the  plugger- 
cradles. 

The  above  figures  show  that  three  out  of  four  sets  of  mount- 
ing clamps  require  different  sizes  of  bolts.  The  Jackhamer 
system  of  mounting  is  probably  the  best,  only  the  eye-bolt 
should  be  replaced  by  one  with  a  regular  head.  It  is  possible 
that  by  slightly  widening  the  crank  end  of  the  Jackhamer 
shell  casting,  the  need  of  a  cut  head-bolt  for  the  cross-head  can 
be  avoided.  The  size  of  the  cross-head  and  mounting  slide 
forward  clamp-bolts  can  probably  be  the  same  (%  by  about 
2!/2  to  3  in.) ,  though  this  is  a  matter  of  small  importance.  The 
size  of  the  rear  clamp-bolt  can  probably  be  standardized  at 
%  by  5  to  6  inches. 

The  nuts  for  the  %-in.  cross-head  bolts  should  be  the  regu- 
lar square  ones.  The  %-in.  mounting  slide  clamp-bolts  must 
have  special  square  nuts  1%  in.  across  flats,  as  are  provided 
with  the  I.-R.  cradle.  The  special  nut  fits  the  small  end  of  the 
chuck-wrench. 

The  details  of  the  feed  nut  on  the  plugger-cradles  should  be 
the  same  as  on  the  larger  drifters. 

Summary 

An  observation  of  Table  No.  9,  which  is  a  combination  of 
Tables  No.  4,  5,  6,  7,  and  8,  shows  that  of  the  nine  cradles 
listed,  six  are  unlike.  The  cradles  listed  include  the  types 
that  are  required  to  mount  practically  all  classes  of  rock-drills. 
By  close  standardization,  the  number  of  different  cradles  could 
be  decreased  to  three,  and  probably  two.  The  length  of  steel 
change,  except  with  the  I.-R.  plugger-cradle,  can  be  varied 
by  using  either  of  the  two  lengths  of  standard  feed-screws. 

It  would  be  impossible  to  attempt  to  standardize  the  shape 
of  the  clamp-straps  that  hold  the  pluggers  to  the  mounting 
slide. 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  749 


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750  PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

MACHINES 
Machine  Side-Rods 

Table  No.  10  gives  some  data  regarding  the  side-rods  on 
various  machines. 

This  table  shows  that  practically  'all  the  drifter  and  stoper 
side-rods  are  %-in.  bolts.  The  plugger  machines  have  the 
1%-in.  side-rods. 

It  is  thought  that  perhaps  the  bolts  on  the  class  of  rock- 
drills  considered  in  this  paper  can  be  limited  in  diameter  to 
%  and  %-inch.  Is  it  practical  to  put  %  or  %-in.  side-rods  on 
the  plugger  drills? 

From  the  figures  in  Table  No.  10  it  appears  as  if  it  would  be 
possible  to  do  some  work  in  standardizing  the  side-rod  bolts. 
In  the  list  are  included  machines  with  rifle-bar,  front-head, 
and  turbine  rotation.  The  smaller  plugger  side-rods  are  prac- 
tically the  same  in  all  respects.  There  is  little  difference  given 
between  the  lengths  of  the  rods  on  the  various  drifters  and 
stopers  that  have  through  side-rods. 

A  part  standardization  of  the  side-rod  bolts  would  not  affect 
the  design  of  the  drill  to  any  extent.  It  would  be  possible,  in 
many  cases,  to  vary  slightly  the  length  of  the  spring  as  well  as 
the  position  of  the  retaining  lugs  on  the  front-head  forging. 
As  mentioned  before,  the  most  commonly  used  length  of  side 
and  standard  rods  could  be  more  interchangeable.  The  nuts 
on  the  side-rods  must  be  haxagon  shaped. 

Exhaust 

The  threads  on  the  valve  exhaust-port  should  be  the  %-in. 
standard  pipe-thread. 

Valve-Chest 

In  Table  No.  11  is  given  some  data  pertaining  to  the  valve- 
chest  bolts.  (See  page  755.) 


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75i  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

If  the  %-in  bolts  are  to  be  eliminated,  the  valve  and  motor- 
chest  bolts  will  have  to  be  %  and  %  in.  No  standardization 
of  these  parts  other  than  of  the  bolt  diameter  can  be  attempted. 
The  special  shaped  bolt-heads  should  be  avoided. 

In  the  case  of  the  18  Leyner  the  valve-chest  stud-bolts  often 
turn  when  the  nuts  are  moved.  It  would  perhaps  be  an  im- 
provement if  the  valve-chest  casting  were  slightly  increased 
in  width,  and  the  %-in.  bolts  replaced  by  %-in.  size. 

Feed-Nut  and  Parts 

The  feed-nut  washer  and  lock-nut  should  be  of  the  design 
and  size  that  was  accepted  as  standard. 

The  following  table  lists  some  of  the  feed-nut  details  : 


Hexagon  lock-nut  across 
flats  —  inches 


2 

1% 

IK 
2 
2 
2 

It  would  be  a  slight  advantage  if  the  lock-nut  were  about 
in.  across  flats.     It  would  then  fit  the  large  end  of  the 
chuck-wrench. 

On  the  I.-R.  550  D  it  is  important  that  the  needle-valve 
bushing  and  lock-nut  can  be  handled  by  either  the  %  or  %-in. 
wrench.  The  details  of  the  bushing  and  nut  are  : 

Size,  inches  Threadsfper[inch  Hefeds  across 

Part         .  flats  —  inches 

Valve  bushing  ............  .  %  by  1  14  % 

Lock-nut  ....................  14  1% 

As  they  are  now  made,  the  head  on  the  valve  bushing  is  too 
large  for  the  %-in.  bolt-wrench,  and  the  lock-nut  head  is  Me-in. 
too  large  for  the  %-in.  wrench. 

Plugger  Handle-Bolts 

On  page  756  are  a  few  figures  regarding  the  plugger  handle- 
bolts. 


Machine 

Waugh  plugger  

TABLE  NO.  12 

Total  length, 
inches 
4 

Waugh  clipper  . 

4 

Jackhamer  . 

±y 

DX61  

4^ 

Waugh  turbro 

4 

18  Leyner  

4^: 

550  D  ..  .. 

148  Levner.... 

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756  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

TABLE  NO.  13 

Machine  Bolt,  inches  Nut 

DP  33 #  by  13^  Hexagon 

NRW  93 K  by  13#  Square 

BCRW  430 #  by  12#  Square 

Clipper K  by  15  »  Square 

The  diameter  of  the  handle-bolt  can  probably  be  increased 
to  %-in.  It  looks  as  if  a  bolt  %  by  about  1^-in.  could  be 
taken  as  the  standard.  The  nut  should  be  square. 

Air  Connections 

It  is  a  matter  of  choice  between  the  bent  nipple  and  pipe 
fitting  connection.  The  bent  nipple  is  neater,  and  it  probably 
offers  less  resistance  to  the  air  than  does  the  same  size  connec- 
tion made  up  of  pipe  fittings.  The  sharper  the  curvature  of 
the  nipple,  the  less  room  will  be  taken  up  by  the  fitting. 

The  size  of  the  air  connections  will  depend  on  the  air  con- 
sumption of  the  machine.  The  two  standard  sizes  should  per- 
haps be  %  and  %-inch. 

The  air-swivel  connection  nut,  or  bushing,  can  probably  be 
made  one  standard  size  to  serve  both,  the  !/2  and  %-in.  fittings. 
The  head  of  the  swivel-nut  should  fit  either  the  large  or  small 
end  of  the  chuck-wrench.  The  shape  of  the  head  should  be 
haxagon,  with  1%  or  ^-in.  across  flats. 

There  does  not  seem  to  be  any  reason  why  the  threads  on 
the  swivel-nut  cannot  be  made  to  correspond  with  standard 
pipe-threads.  There  is  some  doubt  about  the  advisability  of 
standard  pipe-threads  when  the  cylinder  is  a  casting.  Stand- 
ard pipe-threads  for  the  air  connections  are  now  used  on  many 
of  the  plugger  and  stoper-drills. 

Parallel  threads  will  have  to  be  used  on  the  hose  nut  end  of 
the  air-spud.  No  bushing  should  be  needed  to  fasten  the  spud 
to  the  nipple  or  pipe  fittings  that  lead  to  the  drill.  The  hex- 
agon head  on  the  air-spud  should  be  I1%e-in.  across  flats  to  fit 
the  large  end  of  the  chuck-wrench. 

The  air-connection  nut  should  be  either  of  the  lugged  or 
hexagon  type,  and  be  of  such  size  as  to  permit  turning  by  the 
chuck-wrench  if  necessary. 

The  inside  diameter  of  the  hose  should  approach  the  size  of 
the  hose  as  nearly  as  possible. 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  757 

Table  No.  14  lists  more  information  on  the  details  of  the 
air-swivel  nut  and  air-hose  spud. 

This  table  shows  that  the  swivel-nuts  are  interchangeable 
between  the  DT  42  and  DT  44,  also  between  the  Waugh  Tur- 
bro  and  71  Drills.  The  Clipper,  CC  11,  NRW  93,  and  DP  33 
require  only  the  standard  %-in.  pipe  nipple  to  connect  the  air 
to  the  machine.  None  of  the  swivel-nut  heads  make  an  exact 
fit  with  the  chuck- wrench. 

The  six  air-hose  spuds  listed  are  all  different.  None  of  the 
spud-heads  are  the  exact  size  to  fit  the  large  end  of  the  chuck- 
wrench.  That  the  I.-R.  spud  has  not  taper  threads  to  the  nut 
is  the  only  difference  between  it  and  Briggs  standard  IV^-m. 
pipe  fitting.  Parallel  threads  are  necessary  on  account  of  ex- 
cessive wear  from  frequent  use. 

Air-Filter 

The  form  of  air-filter  is  a  matter  of  choice.  In  some  of  the 
T-shaped  types  it  is  too  easy  a  matter  to  remove  the  screen. 
The  T  filter  with  a  plug  promotes  oiling  through  the  hose. 

The  I.-R.  air-filter  No.  27631  could  be  improved  by  adding 
a  small  lug  to  the  casting  to  prevent  the  screen  from  dropping 
out  of  place.  There  are  other  types  of  filters  which  do  not 
require  a  screeri  of  special  shape. 

There  are  a  few  miscellaneous  bolts,  nuts,  bushings,  etc., 
that,  for  the  sake  o'f  uniformity,  should  be  made  to  fit  one  of 
the  wrenches  on  hand. 

The  stoper-handle  nut,  to  fit  the  chuck-wrench,  needs  to  be 
li/i-in.  across  flats.  The  handle  nut  on  the  CC  11,  16  V,  DT  42, 
DT  44,  and  Waugh  71  is  the  proper  size. 

Some  of  the  stopers  require  chuck  retaining  bolts.  The 
chuck-bolt  details  on  a  few  of  the  machines  are  as  follows : 

Size  of 
Machine  bolt,  inches  Nut  Remarks 

Waugh  71 y*  by  5#  Hexagon         Nuts  on  both 

16V 2Oy4  Hexagon  ends. 

CC  11 y*  by  5K"  Hexagon 

It  appears  as  if  the  same  size  of  bolt,  with  a  square  nut,  can 
be  used  for  the  safety  collar  and  chuck. 


758 


PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 


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STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  759 

The  cradle  clamp-bolts  on  the  Waugh  Turbro  drill  are : 

Rear  clamp-bolt,  %  by  6%  in.,  hexagon  nut  on  both  ends. 
Front  clamp-bolt,  %  by  5*4  in.,  head  on  one  end. 

On  the  148  and  248  Leyners  the  valve-head  bolt-nut  is  hex- 
agon in  shape  and  l^e  in.  across  flats.  It  fits  the  large  end  of 
the  chuck-wrench. 

Throttle-Valve  Handle 

No  attempt  has  been  made  to  standardize  the  details  of  the 
throttle-handle.  At  present,  few  of  the  handles  are  inter- 
changeable. Table  No.  7  calls-  attention  to  the  varying  shape 
of  valve-stems. 

Water-Valve 

The  standard  make  of  %-in.  brass  needle-valve  costs  mate- 
rially less  than  the  rock-drill  manufacturers'  valve.  The 
standard  brass  valve  gives  just  as  satisfactory  service  as  the 
more  expensive  product.  The  threads  on  the  steel  valve  rust 
quickly.  The  valve-stem  cap  should  be  1*4  in.  across  flats,  as 
it  is  on  most  of  the  valves  in  use  in  the  Copper  Queen  mines. 

If  it  were  not  for  pipe-scale  getting  in  the  valve-seat,  it 
would  be  an  improvement  to  have  the  hose-stems  fixed  to  the 
valve.  This  -would  prevent  the  miner  from  disconnecting  the 
water-hose  at  the  valve.  The  hose-stem  made  out  of  %-in. 
pipe-nippel  is  more  satisfactory  than  the  more  expensive  stem 
with  the  shoulders.  The  shoulders  too  readily  permit  the  use 
of  a  wrench  to  break  the  water  connection  at  the  valve  instead 
of  at  the  spud.  The  "goose-neck"  and  valve  should  at  all  times 
stay  on  the  hose,  and  not  on  the  rock-drill. 

The  most  satisfactory  form  of  water-valve  handle  would  be 
the  one-ended  lever  shape ;  that  is,  similar  to  the  shape  of  the 
throttle-valve  handle.  The  cross-bar  and  wheel  forms  of 
handle  are  too  easily  caught  when  dragging  the  hose. 

Conclusions 

To  standardize  drilling  machines  it  is  essential  that  the 
manufacturers  adopt  the  same  specifications  in  making  the 
fittings  used  on  rock-drills.  As  nearly  as  possible  the  spuds, 
air-swivel  nut,  back-head  cap,  back-head  plug,  oil-plugs,  etc., 
should  be  interchangeable  between  the  drifters,  stopers,  and 


760  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

plugger-drills.  Special  threads,  bolts,  and  nuts  should  be 
avoided  except  where  they  are  absolutely  necessary.  As  few 
sizes  of  bolts,  nuts,  and  bushings  should  be  used  as  is  practical. 
Not  more  than  two  sizes  of  guide-shells  should  be  standard- 
ized. There  should  be  three  lengths  of  feed-screw,  and  two 
lengths  of  standard  rods. 

It  is  important  that  all  bolt-nuts,  bushings,  and  spud-heads 
subject  to  severe  usage  should  fit  the  chuck-wrench.  The  most 
important  fittings  to  be  handled  by  the  large  end  of  the  chuck- 
wrench  are  the  square  nuts  on  the  arm,  clamp,  and  swing-bolts. 
It  is  also  necessary  that  the  large  end  of  the  wrench  fit  the 
head  of  the  air-swivel  nut,  air-spud,  and  valve-head  nut. 

Among  the  parts  for  the  small  end  of  the  chuck-wrench  to 
take  care  of,  are  the  water-connection  nut,  back-head  cap, 
safety-collar  nuts,  oil-plugs,  water-valve  cap,  and  perhaps  the 
side-rod  bolt-head,  the  slide  and  clamp-nuts  on  the  plugger- 
cradle. 

To  handle  the  smaller  nuts  about  the  machine  one  other  two- 
ended  wrench  will  be  required.  If  i/2-in.  bolts  are  necessary  to 
the  drill  construction,  this  smaller  wrench  can  be  made  three- 
ended.  In  designing  this  wrench  it  must  be  remembered  that 
one  end,  probably  the  %-in  bolt  end,  will  have  to  be  so  placed 
as  to  allow  its  handling  the  back-head  plug. 

To  eliminate  the  monkey-wrench,  a  box-wrench  will  be 
needed  to  take  care  of  the  drill-steel.  This  wrench  can  prob- 
ably be  placed  between  the  jaws  of  one  of  the  regular  wrenches. 

In  this  discussion  it  has  been  suggested  that  to  reduce  the 
number  of  size  of  bolts,  nuts,  etc.,  the  parts  listed  below  might 
be  made  as  follows: 

Size  of  bolt,  %  by  5  in.,  square  nut; 
Column  cross-bar  bolts; 
-Safety-collar  bolts; 
Stoper  chuck  retaining-bolts ; 

Size  of  bolt,  1%  by  G1^  in.,  possibly  bevel  head,  special  nuts; 
Arm-bolts ; 

Special  square  nut  for  the  %-in.  swing-bolt  to  be  the  same  distance 
across  flats  as  arm  and  clamp-bolts ; 
Size  of  bolt,  %  by  2  in.,  square  nut; 
Throttle  handle  bolt; 
Crank-bolt; 

1  in.,  %  in.,  and  y2  in.  clamp-bolts; 
Size  of  bolt,  %  by  1  in.,  hexagon  nut; 
Cradle  standard  rods;  and 
Machine  side-rods. 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  ?6l 

On  the  Ingersoll-Rand  cradle,  it  may  be  possible  to  use  the 
same  size  of  bolts  for  the  mounting  slide-clamps,  cross-head, 
and  feed-screw  support. 

Having  the  use  of  two  wrenches,  one  a  chuck-wrench  with 
I15/i6  and  1%6-in.  jaw  openings,  the  other  a  lighter  weight 
double  ended  %  and  %-in.  bolt-wrench,  the  sizes  of  bolts, 
nuts,  etc.,  in  Tables  15  and  16  have  been  suggested. 

Drill-Steel 

All  the  drill-steel  used  in  the  Copper  Queen  mines  pass 
through  a  centrally  located  surface  shop,  which  is  within  a 
few  feet  of  one  of  the  principal  shafts.  With  the  exception  of 
the  drill-steel  used  in  that  division  of  the  mine,  it  all  has  to  be 
transferred  daily  each  way  by  auto-truck  between  the  mines 
and  the  sharpening  shop.  The  drill-steel  is  handled  between 
the  shaft-collar  and  the  underground  tool-racks  by  the  mine 
tool  nippers. 

There  are  now  in  use  in  the  Copper  Queen  mines  four  dif- 
ferent kinds  of  drill-steel.  Among  the  disadvantages  of  not 
having  one  standard  form  of  drill-steel  are : 

(1)  To  permit  proper  distribution  with  the  various  kinds 
of  steel  in  use,  it  is  necessary  that  careful  sorting  and  counting 
be  done  by  both  the  mine  and  shop  nippers. 

(2)  The  use  of  several  kinds  of  steel  places  more  labor  and 
responsibility  upon  the  underground  tool  nippers. 

(3)  With  several  kinds  of  steel  in  the  rack,  it  is  necessary 
that  the  drill-runner  should  be  more  careful  in  his  selection  of 
the  steel  for  the  shift's  work.    If  there  were  but  one  kind  of 
steel  in  use  in  the  mine,  the  drill-man  would  have  a  larger  sup- 
ply from  which  to  choose. 

(4)  With  various  kinds  of  steel  to  be  sharpened,  the  shop 
loses  more  time  in  frequently  having  to  change  dies,  dollies, 
blocks,  and  formers.    The  additional  supply  of  tools  required 
means  more  expense.    In  the  shop  it  is  not  only  necessary  to 
sort  out  the  various  lengths,  but  the  different  sizes  of  steel  as 
well.    When  different  sizes  of  drill-steel  are  in  use,  the  lengths 
of  starters,  size  of  bits,  and  length  of  change  are  likely  to  be 
different  for  the  various  steels. 


762 


PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 


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STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  763 


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766  PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 

(5)  As  the  number  of  any  one  class  of  rock-drills  in  use  in 
the  mine  will  vary  from  time  to  time,  there  will  often  be  an 
excess  or  shortage  of  one  or  more  kinds  of  drill-steel. 

Steel  Used  in  the  Copper  Queen  Mines 

The  four  kinds  of  steel  now  in  use  in  the  Copper  Queen 
mines  are  as  follows : 

(a)  For  use  in  drifting  machines : 

li/4-in.  round  hollow  steel  with  the  regular  Leyner 
shanks. 

(b)  For  use  in  wet  stopers: 

%-in.  hexagon  hollow  steel  with  a  plain  shank. 

(c)  For  use  in  dry  stoping: 

1-in.  cruciform  solid  steel  with  a  plain  shank. 

(d)  For  use  in  plugger  machines: 

%-in.  hexagon  hollow  steel  with  the  regular  Jack- 
hamer  collar-shank. 

Table  No.  17,  page  767  lists  the  length  of  change,  length  of 
starter-drill,  diameter  of  starter-bit,  weight  of  the  steel  bar 
per  foot,  and  the  width  of  the  wings  of  the  bit  for  the  various 
kinds  of  drill-steel  now  in  use  in  the  Copper  Queen  mines. 

The  above  figures  show  the  frequency  with  which  the  fittings 
on  the  mechanical  sharpener  must  be  changed.  At  present, 
about  1250  pieces  of  steel  pass  through  the  sharpening  shop 
per  24  hours.  Of  this  total,  500  are  l^-in.  Leyner  steel. 

Throughout  the  Copper  Queen  mines  the  ground  is  very 
changeable;  there  is  much  ground  that  is  either  "ravelly"  or 
very  soft.  Either  of  these  conditions  would  prohibit  the  use  of 
plain  shanked  steel  in  the  drifter  and  plugger  machines.  In 
general,  lug-shanked  steel  would  be  an  improvement  over  the 
present  form  of  stoper  steel. 

During  the  last  few  months  [to  Nov.,  1920],  tests  were  made 
in  one  division  of  the  mines  with  the  idea  of  replacing  the 
four  kinds  of  drill-steel  now  in  use  by  1-inch  round  hollow 
steel  with  lugged  shanks.  To  give  the  necessary  strength,  the 
lug  on  the  1-in.  steel  is  1  in.  long,  while  the  lug  on  the  l-(4-in. 
shank  is  only  %  in.  long.  If  the  1-inch  round  steel  were 
adopted,  the  Leyner  man  would  have  to  handle  only  steel  that 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  767 


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PROCEEDINGS   OF  AMERICAN  MINING   CONGRESS 


weighs  about  2%  Ib.  per  foot,  while  the  1%-in.  steel  now  in 
use  weighs  nearly  4  Ib.  per  foot.  On  the  other  hand,  the 
stoper  and  plugger-steel  weights  would  be  slightly  increased; 
but  the  difference  would  be  of  no  consequence,  as  a  7%-ft  (5th 
size)  1-in.  drill-steel  is  not  difficult  to  handle. 


TABLE   NO.   18 


1  In.  Round  Hollow 


Drill 

Starter     .  .  , 

Length 
ft.-in. 

2-6 

Weight, 
pounds 

6.2 

2nd 

3-9 

9.3 

3rd  

5-0 

12.4 

4th 

6-3 

15.5 

5th  

7-6 

18.6 

Total.... 

62.0 

Drill 

Starter 

\1A  In.  Round 

Length 
ft.-in. 

3-0 

Hollow 
Weight, 
Pounds 

11.9 
17.9 

23.9 
29.8 

2nd  

4-6 

3rd 

6-0 

4th 

7-6 

Total... 


83.5 


In.  Hexagon  Hollow 


Weight, 


Drill 

Starter 

Length 
ft.-in. 

2-6 

Pounds 

5.2 

2nd  

3-9 

7.8 

3rd  

5—0 

10.4 

4th 

6-3 

13.1 

5th    ..  ...  .  . 

....    •    7-6 

15.6 

Drill 


1  In.  Crucifrom  Solid 

Weight, 


Starter. 

2nd 

3rd 

4th.... 


Length 
ft.-in. 

3-0 
4-3 
5-6 
6-9 


Pounds 

6.7 

9.5 

12.3 

15.1 


Total.. 


52.1 


Total. 


43.6 


Table  No.  18  shows  that  with  the  adoption  of  1-inch  round 
steel  there  would  probably  not  be  a  saving  in  the  weight  of 
steel  required  to  supply  the  mines.  The  1-inch  round  steel 
would  be  more  easily  bent  than  the  l^-in.  steel,  but  would  be 
harder  to  bend  than  the  %-in.  hexagon  steel. 

That  the  round  steel  with  the  lugged  shank,  rather  than  the 
plain  shank  hexagon  steel,  has  been  tried  is  due  to  the  char- 
acter of  the  ground  in  the  Copper  Queen  mines,  and  that  the 
round  section  is  naturally  the  stronger  one.  The  plain  shank- 
steel  offers  the  advantage  that  there  is  no  shank  to  form,  other 
than  grinding  and  tempering  one  end  of  the  bar.  If  it  were 
not  for  the  form  of  steel  retainer  required,  perhaps  the  col- 
lared shank  would  give  better  results  than  the  Leyner  shank, 
as  the  ring  is  the  first  stage  of  the  forging  when  making  the 
lug.  The  collared  shank-steel  could  be  made  to  be  used  with 
both  anvil-block  and  tappetless  machines. 

So  far,  1-inch  round  steel  has  proved  satisfactory  with  all 
but  the  "wiggletails.' 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  769 

Shank  breakage  at  either  .end  of  the  lug  is  the  difficulty  en- 
countered with  the  stopers.  The  breakage  with  some  of  the 
hand-rotated  machines  has  gone  as  high  as  20%,  but  with  the 
mechanically-rotated  stopers  has  not  exceeded  3%.  Though 
%  hexagon  and  1-in.  cruciform  steel  have  been  used  success- 
fully in  the  stoper-drills  for  years,  this  drill-steel  has  had  only 
plain  shanks.  The  weakness  in  the  1-inch  round  steel  seems 
to  develop  when  upsetting  the  bar  to  form  the  lugs  of  the 
Leyner  shank. 

Careful  Heat  Treatment 

It  is  thought  that  this  difficulty  can  be  overcome  by  more 
careful  heat  treatment  in  the  shop ;  not  that  the  1-inch  steel  is 
being  treated  more  carelessly  than  the  l^-in.  Leyner  steel, 
but  that  the  lighter  steel  should  be  given  more  special  atten- 
tion to  make  it  stand  the  strain.  The  shank  breakage  in  the 
regular  run  of  drill-steel  does  not  go  above  0.7%. 

The  actual  practice  in  the  Copper  Queen  shop  is  to  temper 
only  the  striking  end  of  the  shank.  Some  of  the  entire  shanks 
of  the  experimental  steel  have  been  tempered  in  fish  oil,  and 
these  have  given  better  results.  The  breakage  increases  with 
the  continued  use  of  the  drill-steel. 

In  much  of  the  1-inch  drill-steel  the  hole  through  the  bar  is 
distorted  in  regard  to  both  shape  and  position.  Not  in  all 
cases  is  the  distortion  due  to  forging  in  the  sharpening  shop, 
as  an  examination  of  many  bars  has  shown  this  condition  not 
limited  to  the  shank.  Any  alteration  from  the  round  hole 
means  an  unnecessary  weakness.  The  position  and  shape  of 
the  hole  in  hollow  drill-steel  is  an  important  matter  worthy  of 
careful  consideration. 

Another  weakness  in  the  use  of  lug-shanked  steel  for  stopers 
is  that  the  Leyner  form  of  chuck  does  not  offer  as  much  sup- 
port to  the  drill-steel  as  does  the  plain  shank-chuck. 

Throughout  these  tests,  an  air  pressure  of  about  85  Ib.  per 
sq.  in.  was  delivered  to  the  stopers.  If  the  air  pressure  had 
been  reduced  5  or  10  Ib.,  the  shank  breakage  would  not  have 
been  as  high. 

Drilling  Speed 

When  using  the  1-inch  steel  in  the  large  drifting  machines 
there  did  not  appear  to  be  any  material  increase  in  drilling 


770  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

speed  above  the  results  obtained  with  the  1^4-in.  steel.  The 
bit  on  the  1-inch  round  steel  is  1%-in.  less  in  diameter  than 
the  corresponding  bit  in  the  1%-in.  steel.  In  some  cases,  the 
1^-in.  steel  out-drills  the  smaller  steel.  From  these  results, 
it  looks  as  if  the  large  drifting  machines  were  too  powerful  for 
the  1-inch  experimental  steel.  Undoubtedly  the  same  inches 
cut  per  minute  could  be  obtained  with  a  smaller  rock-drill  and 
1-inch  steel.  If  it  is  reduced,  and  though  the  first  cost  would 
be  higher,  the  upkeep  expense  would  be  reduced.  Most  manu- 
facturers make  their  rock-drills  to  run  most  efficiently  at  70 
Ib.  of  air. 

An  outline  of  the  progress  followed  in  making  the  Leyner 
shank  is  as  follows: 

(1)  Heat  to  about  1800°  F. 

(2)  Countersink  hole  in  head  of  drill  and  forge. 

(3)  Re-heat  to  1800°  F.  and  upset  for  ring. 

(4)  Re-heat  to  1800°  F. 

(5)  Punch,  drive  in  pin,  and_form  lug  complete. 

(6)  Let  cool  in  air  on  shop  floor. 

(7)  Heat  shank  for  1^  inches  from  striking  end  to  1400  to  1500°  F., 
and  draw  last  i/£  inch  to  blue  color. 

To  form  the  collared  shank: 

(1)  Grind  striking  end  of  shank. 

(2)  Heat  to  1800°  F.,  put  on  collar  by  upsetting. 

(3)  Re-heat  to  1800°  F.,  countersink,  put  in  pin  and  forge  shank  to 
proper  size. 

(4)  Let  cool  on  shop  floor. 

(5)  Heat  shank  for  1^  inches  from  striking  end  to  1400  to  1500°  F., 
and  draw  end  of  shank  to  blue  color. 

General  Conclusions 

From  the  foregoing  it  is  evident  that  great  economy  in  both 
the  manufacture  and  use  of  drilling  machines  can  be  obtained 
by  careful  study  of  the  fittings  used  in  the  routine  operation  of 
air-drills  and  the  adoption  of  standard  specifications  for  same. 

The  suggestions  made  are  not  offered  in  any  spirit  of  criti- 
cism, but  in  the  belief  that  joint  study  of  the  question  by  both 
drill  manufacturers  and  operators  cannot  fail  to  result  in 
mutual  benefits. 

With  this  in  mind,  I  offer  the  further  suggestion  that  a  joint 
committee  be  appointed  to  consider  the  question  and  submit 


STANDARDIZATION  OF  DRILLING  MACHINES  AND  STEEL  771 

recommendations  to  both  parties  for  the  adoption  of  standard 
specifications. 

Furthermore,  I  do  not  consider  it  wise  to  attempt  to  stand- 
ardize the  types  of  drilling  machines  themselves  to  be  used  in 
mining  operations;  to  do  so  would  seriously  handicap  the 
efforts  of  the  designers  to  improve  them.  Their  past  record 
in  the  development  of  drilling  machines  is  sufficient  evidence 
of  the  value  of  unrestricted  competition  in  design. 

I  am  in  favor  of  the  lightest  type  of  machine  in  the  various 
classes  of  work  that  will  stand  up  with  a  reasonable  cost  of 
maintenance. 

In  the  matter  of  drill-steel,  I  believe  that  material  econo- 
mies will  result  from  the  adoption  by  individual  operators  of 
one  section  of  steel  and  one  form  of  shank  for  all  types  of 
machines  used  by  them,  with  due  regard  for  the  particular 
conditions  encountered  in  their  work. 


772  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 


RELATION  OF  STANDARDIZATION  TO  MINE  MANAGEMENT 

By  CHAS.  A.  MITKE,  Chairman  of  General  Committee  Standardization, 
Metal  Mines  Section,  American  Mining  Congress 

It  has  been  well  said  that  "great  economies  in  any  business 
of  production  result  from  careful  and  thoughtful  attention  to 
details,  and  mining  is  no  exception  to  this  rule.  On  the  con- 
trary, successful  mining  is  one  of  the  greatest  embodiments 
of  the  principle.  Just  as  the  difference  between  the  careful 
manager  and  the  careless  one  is  apt  to  be  the  difference  be- 
tween profit  and  loss,  so  the  difference  between  standardization 
and  non-standardization  is  very  frequently  the  difference  be- 
tween good  and  bad  management." 

Labor  Is  50%  of  Costs  In  Mining 

Estimates  show  that  in  metal  mining  over  50%  of  the  total 
cost  of  production  is  chargeable  to  labor ;  therefore,  the  proper 
directing  and  systematizing  of  the  activities  of  labor,  to  elimi- 
nate the  waste  of  human  efforts,  is  an  important  factor  in  the 
standardization  of  mining  operations. 

In  mines  where  only  a  few  men  are  employed,  and  a  small 
tonnage  produced,  the  entire  supervision  can  be  accurately 
directed  by  one  general  foreman,  and  the  question  of  standard- 
ization does  not  enter  largely  into  the  daily  work.  However, 
where  great  tonnages  must  be  produced  at  a  low  cost,  and 
where  the  entire  supervision  of  all  details  by  one  man  is  utterly 
out  of  the  question,  but  of  necestity  rests  in  the  hands  of  a 
large  organization,  then  the  standardization  of  all  operations 
not  only  becomes  very  desirable  but  absolutely  essential. 

The  need  for  a  scientific  investigation  of  mining  practices 
or  mining  methods,  with  a  view  to  alleviating  present  condi- 
tions— as  regards  high  production  costs — which  have  been 
brought  about  largely  through  high  cost  of  supplies,  increased 
advances  in  wages,  and  loss  of  efficiency  due  to  the  employ- 
ment of  unskilled  or  raw  labor,  has  made  itself  felt  throughout 
the  entire  mining  industry,  not  only  in  the  United  States,  but 
also  in  Europe. 


STANDARDIZATION  AND   MANAGEMENT  773 

Wage  Increase  and  Grade  of  Ore  Decrease 

In  one  large  center  in  this  country,  wages,  which  in  1914  ran 
from  $3.75  to  $4.25,  now  range  from  $4.65  to  $5.40  per  8-hour 
shift.  Taxes,  supplies,  freight  rates,  etc.,  are  also  considerably 
higher  than  they  were  several  years  ago,  with  no  immediate 
prospect  of  reduction.  Moreover,  inevitably,  the  grade  of  the 
ore  in  many  properties  will  decrease  as  time  passes.  This 
necessitates  the  mining  of  much  larger  tonnages  in  order  to 
maintain  the  ultimate  output  at  the  same  level. 

Therefore,  the  only  remaining  alternative  for  the  mine 
management  is  to  make  the  workers  so  efficient  as  to  warrant 
the  continuance  of  operations  under  existing  conditions.  This 

can  only  be  accomplished  in  the  following  manner : 

(1)  Americanization,    which   merely   begins   with   the 
teaching  of  the  English  language. 

(2)  Education  of  employes  (from  heads  of  departments 
right   through    the   entire    organization    down   to 
miners  and  shovelers)  in  the  most  efficient  method 
of  performing  the  daily  task. 

(3  By  establishing  a  standard  program  for  all  opera- 
tions, in  order  that  human  efforts  may  be  utilized  to 
the  greatest  advantage. 

(4)  By  furnishing  the  men  with  standard  equipment,  in 
order  to  facilitate  routine  work  and  make  their 
efforts  more  productive.    And 

(5)  In  order  to  encourage  the  miner  to  put  forth  his 
best  efforts  in  .attaining  maximum  production,  an 
incentive,    over  and  above   day's   pay,   should  be 
offered  by  the  management. 

Another  most  important  factor  in  developing  a  scientific 
organization  is  the  "setting  of  standards  for  work  done."  A 
very  vital  question  is,  what  constitutes  a  day's  work?  What 
was  assumed  to  be  a  day's  work  five  years  ago  cannot  be 
adopted  as  standard  today.  The  wage  system,  whether  con- 
tract or  bonus,  must  be  based  on  actual  knowledge  and  justice. 
Nothing  is  more  discouraging  to  a  workman,  or  productive  of 
more  ill-feeling  and  discontent,  than  to  have  the  standard 
bonus  or  contract  rate  cut  because  he  has  performed  his  work 


774  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

exceptionally  well  and  made  a  greater  footage  than  the  rating 
engineer  ever  anticipated  could  be  made  under  the  schedule. 
Cutting  the  bonus  after  it  is  once  established  is  responsible 
for  the  great  feeling  of  distrust  which  many  men  show  towards 
working  under  any  system  other  than  day's  pay. 

Time  and  Skill  Needed  In  Standardizing  At  Mines 

In  order  to  achieve  a  universal  success,  time  and  thought 
must  be  devoted  to  an  intensive  study  of  the  details  of  mining. 
Each  operation  must  be  divided  into  its  component  parts,  and 
standardization  applied  to  each  unit.  Experimentation  is  also 
a  necessary  part  of  the  program,  and  should  be  encouraged 
and  fostered  by  the  management.  The  workers  must  be 
trained  to  perform  their  tasks  efficiently  and  intelligently. 
Labor-saving  devices  and  equipment  should  be  substituted  for 
hand  labor  wherever  possible.  Unskilled  labor  should  be  sup- 
planted as  far  as  possible  by  mechanical  means.  This  should 
not  be  interpreted  as  meaning  a  loss  of  employment  to  many 
who  are  now  engaged  in  this  class  of  work.  There  is  plenty  of 
work  for  all,  and  the  performance  of  work  by  machinery,  re- 
quiring little  or  no  intelligence,  will  release  thousands  of  men 
who  can  be  trained  for  better  paying  jobs. 

Until  recently,  the  systematization  of  metal-mining  opera- 
tions was  considered  impracticable,  particularly  those  opera- 
tions carried  on  underground,  from  which  natural  circum- 
stances have,  to  a  large  extent,  excluded  the  light  of  publicity. 
The  reserves  of  many  of  the  larger  mines  have  also  been  so 
rich  and  extensive  that  economy  has  not  played  as  important 
a  part,  perhaps,  as  it  should.  The  ever-present  possibility  of 
"sweetening  the  ore,"  or,  in  other  "words,  bringing  the  daily 
output  up  to  expectations  by  the  addition  of  higher  grade — 
kept  in  reserve  for  such  purpose — has  often  tided  over  situa- 
tions which,  otherwise,  might  possibly  have  disclosed  unsys- 
tematized  methods  and  careless  supervision  on  the  part  of 
underground  bosses,  to  whom  quantity  plus  quality  at  the 
moment  meant  everything,  regardless  of  the  disastrous  effect 
their  methods  might  have  upon  the  future  life  of  the  mine. 

What  Happens  Underground 

Moreover,  underground  operations  are  to  a  large  extent 
shrouded  in  obscurity,  and  the  intimate  details  are  known  only 


STANDARDIZATION  AND   MANAGEMENT  775 

to  a  few,  whose  business  it  is  to  make  daily  visits  to  the  work- 
ing places.  The  larger  number  of  the  employes  are  frequently 
ignorant  men,  whose  main  interest  in  their  work  is  to  get  out 
the  number  of  cars  required  by  the  boss,  and  to  whom  ore  and 
waste  are  of  very  little  interest,  except  as  they  add  to  the 
required  tonnage. 

The  needs  of  the  manufacturing  industry,  and  the  keen  com- 
uetition  encountered,  have  developed  a  host  of  experts,  and 
production  engineers,  who  have  delved  into  the  intricacies  of 
the  different  branches  and  brought  to  light  innumerable 
operations  which  lend  themselves  well  to  the  adoption  of  stand- 
ard methods. 

Unfortunately,  in  the  mining  industry,  no  sweeping  changes 
can  be  effected,  which,  in  the  course  of  a  short  period  of  time, 
might  be  expected  to  revolutionize  the  industry  at  large,  and 
produce  the  same  gratifying  results  as  have  been  obtained  in 
industrial  plants.  This  fact,  in  itself,  has  acted  as  a  deterrent 
in  the  systematization  of  mining  operations,  and  while,  in 
individual  cases,  alert,  wide-awake  operators  have  made  con- 
siderable progress  along  these  lines,  the  industry  as  a  whole 
does  not  reflect  the  same  systematization  of  operations  that 
may  be  found  in  manufacturing  plants. 

Mining  Practice  Less  Studied  Than  Metallurgy 

It  is  generally  conceded  that  mining  is  a  profession  that 
should  require  a  highly  specialized  training,  but  as  a  rule  suf- 
ficient emphasis  is  not  placed  upon  the  practical  application  of 
such  technical  knowledge.  Too  much  dependency  is  placed 
upon  practical  experience  alone,  and  too  little  on  scientific  prin- 
ciples. Far  be  it  from  the  writer  to  discredit  practical  knowl- 
edge. The  mining  industry  in  the  past  owes  much  to  its 
practical  men,  but  what  it  now  requires  is  practical  knowledge 
superimposed  on  a  scientific  basis,  or,  in  other  words,  the  at- 
tention of  men  who  have  added  years  of  practical  experience 
to  their  specialized  or  scientific  training. 

The  metallurgical  branch  of  the  profession  has  been  the 
subject  of  much  thought  and  study,  and  considerable  research 
is  continually  being  carried  on  in  this  branch  of  the  profession. 
Contributions  have  also  been  made  to  the  mining  branch,  but 
in  the  main  these  have  consisted  rather  of  descriptions  of  prac- 


776          PROCEEDINGS   OF  AMERICAN   MINING   CONGRESS 

tices  already  in  use  in  certain  localities,  than  in  the  nature  of 
original  research  work. 

An  X-ray  analysis  of  mining  operations  as  a  whole,  fre- 
quently discloses  out-of-date  methods  which  would  not  for  an 
instant  be  tolerated  in  surface  plants.  What  large  factory 
owner,  for  instance,  would  permit  one  of  his  operators  to  spend 
two-thirds  of  his  day  away  from  his  machine,  hunting  parts, 
supplies,  lubricating  oils,  etc.?  There,  the  output  is  based  on 
machine  production  for  each  man,  and  the  amount  he  can  turn 
out  is  calculated  to  a  nicety,  and  it  is  the  imperative  duty  of 
the  shop  foreman  to  see  that  everything  required  is  present 
and  the  machine  in  good  order  before  the  man  starts  to  work. 

Comparison  of  Work  of  Miners  and  Factory  Workers 

It  is,  however,  a  common  occurrence  underground  for  a  first- 
class  machine-drill  operator  to  spend  a  large  portion  of  his 
time  walking  through  drifts  and  tunnels  in  search  of  sharp 
steel,  or  the  right  kind  of  steel  to  fit  his  machine,  repair  parts, 
oil-cans,  or  returning  defective  machines  to  the  tool-house  and 
carrying  new  ones  to  take  their  place. 

In  the  factory,  fatigue  studies  have  been  made,  covering 
every  action  from  the  steps  taken  in  performing  certain  duties, 
to  the  movements  made  by  each  hand  of  the  individual  worker 
in  handling  manufactured  parts.  In  mining,  however,  it  has 
come  to  be  an  unwritten  law  that  so  long  as  the  machine-man 
drills  a  round  of  holes — special  allowance  being  made  for  un- 
usually hard  ground — he  has  performed  his  daily  task,  regard- 
less of  the  fact  that — like  Taylor's  handler  of  pig-iron — 
providing  his  operations  are  studied  and  systematized,  he 
might  be  made  to  double  his  performance  with  comparatively 
little  additional  effort  to  himself.  This  has  been  demonstrated 
in  a  number  of  instances ;  yet,  as  a  whole,  it  still  continues  to 
be  the  general  practice  to  consider  one  round  of  holes  a  day's 
work.  The  responsibility  for  this  lies  largely  with  the  mine 
management.  Formerly,  in  a  great  many  instances,  atmos- 
pheric conditions  of  working  places  were  such  that  men  could 
not  work  consistently  during  an  8-hour  shift;  and  in  many 
cases  it  grew  to  be  the  practice  for  men  to  work  a  certain 
period  and  then  seek  a  better  atmosphere  in  the  mine,  where 
they  cooled  off  and  rested  for  an  equal  period  of  time.  Also, 


STANDARDIZATION  AND   MANAGEMENT  777 

in  years  past,  the  ventilation  of  mines  was  so  bad  that  no 
blasting  could  be  allowed  during  the  shift,  and  consequently 
after  the  miner  drilled  his  round  of  holes  he  would  merely 
while  away  the  remainder  of  the  shift  until  quitting  time,  and 
fire  the  shots  when  leaving  the  mine.  With  the  improvement 
that  has  already  been  made  in  metal-mine  ventilation,  it  has 
been  proved  in  exceptionally  well-ventilated  mines  that  shots 
can  be  fired  at  any  time  during  the  shift  without  inconven- 
iencing the  men.  As  a  matter  of  fact,  in  one  large  mine,  which 
is  well  ventilated,  there  is  a  shot  fired  every  minute  during  the 
shift,  with  little  or  no  resulting  delay  to  the  underground 
force.  Now  that  every  eifort  is  being  made  to  attain  under- 
ground working  atmospheres  as  nearly  as  possible  approxi- 
mating those  on  surface,  this  custom  of  considering  one  round 
of  holes  a  shift's  work — regardless  of  its  depth — which  is 
really  nothing  more  than  habit,  must  be  overcome  if  mining- 
operations  are  to  be  placed  on  an  equal  footing  with  those  on 
surface. 

Other  Departments  at  Mines  Capable  of  Improvement 

This  is  but  one  example  of  the  lack  of  systematization  in 
mining  operations.  Much  benefit  could  also  be  obtained  from 
careful  study  of  explosives,  their  use  and  handling ;  the  correct 
placing  of  machine-drill  holes ;  handling  of  timber,  both  under- 
ground and  on  surface,  where  much  unnecessary  labor  is  in- 
volved in  handling  and  re-handling  each  piece  as  it  comes  from 
the  cars,  the  writer  having  observed  as  many  as  12  men  em- 
ployed at  the  same  time  in  handling  one  stick  of  timber. 

The  distribution  and  care  of  underground  supplies  is  an- 
other subject  which  would  react  most  favorably  to  research. 

The  standardization  of  equipment  and  supplies  is  closely 
linked  with  the  systematization  of  operations,  and  of  necessity 
the  one  must  be  studied  along  with  the  other. 

Too  Many  Diff erent  Drills 

The  industry  at  the  present  time  is  burdened  with  a  multi- 
plicity of  machine-drills  of  varying  types,  sizes  and  weights, 
the  difference  in  weight  in  some  instances  not  being  more  than 
1  to  2  Ib.  The  production  of  these  machines  follows  each 
other  with  such  rapidity  that  in  an  effort  to  stock  up  with 
the  best  equipment  available  on  the  market  many  machines  in 


778  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

good  condition  must  be  scrapped,  and  as  parts  are  not  inter- 
changeable, a  considerable  investment  in  such  supplies  must 
continually  be  charged  off  to  profit  and  loss.  The  develop- 
ment of  these  machines  is,  of  course,  carried  on  by  the  manu- 
facturer to  meet  the  needs  of  the  industry ;  but,  unfortunately, 
these  needs  are  often  the  individual  ideas  of  various  opera- 
tors rather  than  the  combined  views  of  the  majority.  What 
may  appeal  to  one  does  not  appeal  to  the  other,  and  conse- 
quently the  necessity  for  purchasing  and  trying  out  this  vari- 
ety of  types  becomes  an  ever-increasing  burden  on  the  opera- 
tor. 

During  the  past  seven  years  the  necessity  for  a  drifting 
machine,  permitting  the  use  of  water  and  air  through  ma- 
chine and  steel,  became  so  evident  to  practically  every  pur- 
chaser of  rock-drills  that,  as  a  result,  the  manufacturers 
evolved  the  water-Leyner.  The  self-rotating  water-stoper, 
which  is  now  nearing  perfection,  is  also  the  result  of  the  com- 
bined needs  of  the  mining  industry.  Many  other  improve- 
ments in  drilling  machines  are  possible,  providing  some  re- 
search work  is  devoted  to  the  subject  of  finding  out  just  what 
specifications  would  meet  the  needs  of  the  majority  for  the 
different  types  of  machines,  such  as  jackhamers,  drifters,  and 
stopers. 

The  chucks  on  all  machines  must  become  standard,  so  as  to 
permit  the  inter-change  of  different  makes  of  steel.  The  lack 
in  efficiency  and  the  loss  of  time  incurred  at  present  through 
miners  supplying  themselves  with  steel  which  does  not  fit  the 
machine  they  are  using  at  the  time,  is  such  that  this  change  has 
become  an  absolute  necessity. 

Sizes  of  Drill-Steel 

The  size  and  types  of  steel  should  also  receive  attention. 
There  are  individual  cases,  where  companies  have  standard- 
ized on  the  14  hollow  octagon  for  all  stoping  and  raising,  and 
find  this  type  of  steel  satisfactory  for  all  their  needs.  Other 
companies  are  achieving  excellent  results  with  the  1-inch  hol- 
low round.  Research  would  bring  to  light  many  facts  that 
might  tend  to  prove  that  one  of  the  other  of  these  two  was  the 
more  satisfactory.  The  same  is  true  of  hose  fittings,  and 
various  parts  and  supplies  for  machines. 


STANDARDIZATION  AND   MANAGEMENT  779 

Underground  power  shovels  to  supplant  manual  labor  in 
shoveling  should  receive  attention,  in  order  to  avoid  the  crea- 
tion of  the  multiplicity  of  slightly  varying  types,  similar  to 
that  at  present  existing  among  rock-drills.  It  is  inevitable 
that  mechanical  equipment  must  supersede  hand  labor  under- 
ground to  a  large  extent,  if  we  are  to  overcome  the  scarcity 
of  labor,  both  skilled  and  unskilled,  and  increase  the  tonnage 
per  man  shift,  at  the  same  time  maintaining  the  normal  grade 
of  the  ore,  which  is  the  principal  means  of  combating  the 
present  high  cost  of  production.  Shoveling  is  one  of  the  most 
important  items  in  underground  operations. 

Underground  Transportation  and  Ventilation 

Care  and  attention  might  profitably  be  devoted  to  under- 
ground transportation,  the  grade  of  tracks,  weight  of  rail, 
etc.  Also,  the  possibility  of  standardizing  on  a  few  sizes  and 
types  of  mine  cars,  rather  than  on  the  unusually  large  number 
now  on  the  market,  and  the  various  methods  of  haulage,  com- 
pressed air,  electric-,  and  steam. 

The  ventilation  of  metal  mines  is  a  subject  of  the  utmost 
importance.  Without  good  air  no  man  can  live,  much  less 
work,  and  upon  the  condition  of  the  working  place  depends 
very  largely  the  efficiency  of  the  worker.  Much  of  the  trouble 
resulting  from  bad  air  in  metal  mines  at  the  present  day  comes 
from  the  deficiency  of  ventilation  in  dead  ends  in  drifts  and 
stopes.  The  ventilation  of  such  working  places  can  greatly 
be  improved  by  resorting  to  systematized  methods  in  regard 
to  the  use  of  certain  types  of  small  blowers  and  ventilating 
pipe,  care  and  attention  being  devoted  to  the  manner  in  which 
these  are  located  and  operated.  The  prevention  of  dust  in 
mines  necessitating  frequent  blasting  during  the  shift  is  an- 
other means  of  raising  the  efficiency  of  the  miners.  In  the 
past,  bad  air,  rock  dust,  and  heated  atmospheres  were  looked 
upon  as  necessary  evils  which  could  not  be  overcome,  and  the 
man  who  could  not  put  up  with  a  certain  amount  of  such  dis- 
comfort was  rather  contemptuously  referred  to  as  one  who 
"could  not  stand  the  gaff."  Today,  such  conditions  are  un- 
necessary, and  the  adoption  and  use  of  standard  equipment 
and  standard  methods  will  provide  the  men  with  a  working 
atmosphere  in  which  they  can  put  forth  their  best  efforts  with- 
out discomfort  to  themselves.  The  systematic  testing  of  mine 


780  PROCEEDINGS    OF   AMERICAN    MINING    CONGRESS 

air  and  the  adoption  of  a  standard  atmosphere  is  one  of  the 
pressing  needs  of  the  industry. 

Fires  in  Mines 

Fire-fighting  equipment  and  systematized  rules  for  combat- 
ing outbreaks  in  the  mine  are  also  of  the  utmost  importance, 
as  the  profit  and  loss  accounts  of  many  companies  show  large 
sums  charged  off  to  disasters  of  this  kind,  which  might  pos- 
sibly have  been  averted  through  the  keeping  in  stock  of  a 
standard  line  of  fire-fighting  apparatus. 

There  are  many  other  subjects  in  the  mining  industry  to 
which  standardization  can  be  applied,  such  for  instance  as 
cost  accounting.  Frequent  discrepancies  in  the  manner  of 
keeping  costs  are  encountered,  even  in  properties  owned  by  the 
same  company.  For  instance,  one  mine  will  charge  off  the 
work  of  preparing  an  orebody  for  stoping  to  development  work 
or  to  a  separate  fund  which  has  been  laid  aside  for  such  pur- 
pose. Their  production  costs  may  then  appear  quite  low,  for 
the  reason  that  this  large  sum  which  should  necessarily  be 
added  to  the  stoping  cost,  as  it  all  goes  against  the  ultimate 
profits,  is  omitted,  while  other  companies  include  develop- 
ment costs,  but  exclude  overhead  and  supervision,  and  so 
forth. 

Ore  Reserves  and  Taxation 

The  estimation  of  ore  reserves  is  another  matter  for  re- 
search; equitable  taxation,  and  many  other  items,  all  come 
under  the  head  of  subjects  to  which  standardization  might  be 
applied. 

An  objection  frequently  raised  against  standardization  is 
that  it  retards  progress,  and  that  having  once  decided  on  a 
standard,  there  is  no  possibility  of  change  and  old  standards 
must  be  adhered  to  even  though  newer  methods  have  been 
developed  which  have  outclassed  the  old.  In  this  connection 
it  may  be  well  to  quote  from  an  authority*  on  this  subject, 
who  well  describes  the  functions  of  a  standard,  in  the  following 
words : 

"A  standard  is  simply  a  carefully  thought-out  method  of  per- 
forming a  function,  or  carefully  drawn  specifications  covering 
an  implement,  or  some  article  of  stores,  or  of  products.  The 


Morris  L.  Cooke.     Bull.  No.  5,  Carnegie  Foundation  Series. 


STANDARDIZATION  AND   MANAGEMENT  781 

idea  of  perfection  is  not  involved  in  Standardization.  The 
standard  method  of  doing  anything  is  simply  the  best  method 
that  can  be  devised  at  the  time  the  standard  is  drawn.  *  *  * 
Improvements  in  standards  are  wanted  and  adopted  whenever 
and  wherever  they  are  found.  There  is  absolutely  nothing  in 
standardization  to  preclude  innovation.  But  to  protect  stand- 
ardi  from  changes  which  are  not  in  the  direction  of  improve- 
ments, certain  safeguards  are  erected.  These  safeguards 
protect  standards  from  change  for  the  sake  of  change.  All 
that  is  demanded  *  *  *  is  that  a  proposed  change  in  a 
standard  must  be  scrutinized  as  carefully  as  the  standard  was 
scrutinized  prior  to  its  adoption.  Standards  adopted  and  pro- 
tected in  this  way  produce  the  best  that  is  known  at  any  one 
time.  Standardization  practiced  in  this  way  is  a  constant 
invitation  to  experimentation  and  improvement." 

Standardization  of  Great  Importance  to  Mines 

The  standardization  of  mine  equipment  and  mine  opera- 
tions in  the  various- branches  are  of  vital  interest  to  the  mine 
manager  who  is  responsible  for  the  ultimate  cost  of  the  prod- 
uct. In  order  to  work  out  these  problems,  to  accumulate  the 
correct  data  upon  which  to  base  conclusions,  and  finally  to 
introduce  standard  methods,  it  is  absolutely  necessary  that  the 
mine  manager  effect  this  change  through  the  medium  of  his 
organization,  composed  of  heads  of  departments,  foremen, 
bosses,  and  engineers.  Their  intelligent  co-operation  is  there- 
fore an  essential  part  of  the  program.  These  are  the  men 
who  represent  the  company,  or  mine  management,  and  inter- 
pret the  policies  and  desires  of  the  company  to  the  great  mass 
of  employes.  They  are  also  intimately  acquainted  and  asso- 
ciated with  the  multiplicity  of  operations  which,  combined, 
form  the  activities  of  the  mine.  If  their  interest  and  enthusi- 
asm is  directed  towards  a  study  and  systematization  of  the 
details  which  form  the  various  groups  of  operations,  then 
through  the  standardization  of  many  small  tasks,  which  by 
themselves  may  not  appear  important,  under  the  careful  super- 
vision of  the  mine  management,  larger  economies  will  result, 
which,  in  turn,  will  ultimately  have  the  desired  effect  of  reduc- 
ing production  costs. 


7$2        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

STANDARDIZATION  WORK  OF  THE  UNITED  STATES 
BUREAU  OF  MINES 

By  F.  G.  COTTRELL 

In  attempting  to  standardize  mine  equipment,  the  current 
best  practice  can  be  crystallized  into  the  form  of  a  code  or  set 
of  rules  and  regulations;  but  in  any  such  attempt  there  are 
always  items  about  which  there  is  a  lack  of  proper  information ; 
so  that  there  is  doubt  whether  such  items  should  be  crystal- 
lized into  a  code  or  passed  over  with  as  little  attention  as 
possible.  There  are  frequently  matters  that  yield  to  labora- 
tory investigation,  facilities  for  which  are  rarely  available  to 
the  mine  operator.  These  rather  difficult  points  are  rarely 
comprehensive  enough  to  form  the  basis  for  a  code  covering 
any  considerable  portion  of  a  field,  and  yet  they  may  themselves 
form  a  standard  of  good  practice.  This  can  be  illustrated  by 
the  Bureau  of  Mines'  permissible  explosives  or  the  miners' 
cap-lamps,  or  possibly  the  Bureau's  rules  for  installing  arid 
using  electrical  equipment  in  bituminous  coal  mines. 

Besides  the  results  of  laboratory  work  and  special  investiga- 
tion, there  is  also  that  type  of  work  which  is  the  result  of  con- 
ferences of  men  of  prominent  standing  in  their  profession  and 
who  are  regarded  as  authorities  in  their  own  field,  and  who 
write  their  opinion  of  current  best  practice  in  the  form  of  rules 
and  regulations.  This  type  of  work  is  illustrated  by  the  'Rules 
and  Regulations  for  Metal  Mines/  compiled  by  mining  engi- 
neers of  standing,  and  'Proposed  Regulations  for  the  Drilling 
of  Gas  and  Oil  Wells  through  Coal  Beds/ 

Approval  System  As  Basis  for  Standards 

While  not  directed  toward  the  production  of  standards  for 
mining  equipment,  still  the  Bureau's  approval  system  furnishes 
material  that  may  well  form  the  basis  of  standards  for  certain 
equipment.  It  is  frequently  the  case  that  in  the  commercial 
development  of  a  really  good  idea,  the  early  productions  are 
foredoomed  to  failure  because  of  lack  of  information  and  a 
proper  ideal  in  designing  the  apparatus.  In  safety  matters 
this  is  of  particular  interest  to  the  Bureau  of  Mines.  In  the 
development  of  electric  machinery  for  use  in  gaseous  mines, 


STANDARDIZATION   BY    BUREAU   OF  MINES  783 

questions  arise  as  to  the  proper  protection  of  the  device  so  that 
sparks  may  not  ignite  gas,  if  perchance  the  apparatus  is  in  a 
gaseous  atmosphere.  Some  kinds  of  sparks  readily  ignite  gas, 
while  others  will  not.  Certain  kinds  of  protective  devices  will 
prevent  ignition  from  etxending  into  the  surrounding  space. 
If  the  apparatus  is  designed  in  a  manner  ignoring  these  facts, 
the  business  can  develop  only  through  dangerous  and  disas- 
trous experience  and  loss  of  life.  After  an  investigation,  the 
Bureau  draws  a  minimum  specification  for  such  devices,  and 
allows  those  companies  which  meet  this  minimum  specification 
to  mark  their  devices  as  approved  by  the  Bureau  of  Mines. 
This  minimum  specification  allows  ample  room  for  individual 
initiative  and  development  beyond  the  line  of  necessary  safety. 
This  work  forms  the  basis  of  standardization  for  such  devices 
in  order  that  they  shall  be  safe  in  gaseous  mines. 

With  these  illustrations  of  the  purpose  of  the  Bureau,  a 
catalogue  of  its  publications  along  these  lines  is  sufficient  to 
indicate  the  field  already  entered  by  the  Department.  For  this 
purpose  of  special  investigation,  the  Bureau  has  a  large  lab- 
oratory at  Pittsburgh  and  the  facilities  afforded  by  eleven 
other  stations  in  various  parts  of  the  country. 

The  Bureau  attempts  to  crack  the  hard  nuts  in  the  several 
fields  of  safe  equipment  as  rapidly  as  its  funds  allow,  and  it  is 
hoped  that  the  future  will  afford  increased  facilities  for  work 
of  this  kind. 

Publications  Available 

A  list  of  the  Bureau's  publications  on  this  subject  follows: 

Schedule  1. — 'Conditions  and  Requirements  Under  which 
Explosives  are  Tested/ 

Schedule  2A.— -'Procedure  for  Establishing  a  List  of  Per- 
missible Explosion-Proof  Electric  Motors  for  Mines.' 

Schedule  6A.— 'Procedure  for  Establishing  a  List  of  Per- 
missible Portable  Electric  Mine  Lamps/ 

Schedule  7. — 'Procedure  for  Establishing  a  List  of  Per- 
missible Miners'  Safety  Lamps/ 

Schedule  12. — 'Procedure  for  Establishing  a  List  of  Per- 
missible Single-Shot  Blasting  Units/ 


784  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

Schedule  13. — 'Procedure  for  Establishing  a  List  of  Per- 
missible Self-Contained  Mine-Rescue  Breathing  Apparatus/ 

Schedule  14. — 'Procedure  for  Establishing  a  List  of  Per- 
missible Gas  Masks/ 

Schedule  15. — 'Procedure  for  Establishing  a  List  of  Per- 
missible Storage-Battery  Locomotives  for  Use  in  Gaseous 
Mines/ 

Schedule  16. — 'Procedure  for  Establishing  a  List  of  Per- 
missible Multiple-Shot  Blasting  Machines/ 

Technical  Paper  22. — 'Electrical  Symbols  for  Mine  Maps/ 

Technical  Paper  53. — 'Proposed  Regulations  for  the  Drill- 
ing of  Gas  and  Oil  Wells  with  Comments  thereon/ 

Technical  Paper  79. — 'Electric  Lights  for  Use  about  Oil 
and  Gas  Wells/ 

Technical  Paper  138.— 'Suggested  Safety  Rules  for  Install- 
ing and  Using  Electrical  Equipment  in  Bituminous  Coal  Mines/ 

Technical  Paper  214.— 'Motor  Gasoline  Properties,  Labora- 
tory Methods  of  Testing,  and  Practical  Specifications/ 

Bulletin  49.— 'Smoke  Abatement  and  City  Smoke  Ordi- 
nances/ 

Bulletin  75.— 'Rules  and  Regulations  for  Metal  Mines/ 
Bulletin  116.— 'Methods  of  Sampling  Delivered  Coal/ 
'Advanced  First-Aid  Instructions  for  Miners/ 

'Rescue  and  Recovery  Operations  in  Mines  after  Fires  and 
Explosions/ 

The  last  two  are  pocket-books  issued  in  1917  and  1916,  re- 
spectively. 


NATIONAL   AND   INTERNATIONAL    STANDARDIZATION       785 

"V 

NATIONAL  AND  INTERNATIONAL  STANDARDIZATION 

By  P.  G.  AGNEW,  Secretary  American  Engineering  Standards  Committee 

During  or  since  the  war,  national  engineering  standardizing 
bodies  have  been  organized  in  Austria,  Belgium,  Canada, 
France,  Germany,  Holland,  Italy,  Sweden,  Switzerland,  and 
the  United  States,  and  one  is  in  process  of  formation  in  Japan. 
All  of  these  are  similar  in  form  of  organization  and  method  of 
operation  to  the  British  Engineering  Standards  Association, 
which,  organized  in  1902,  has  been  a  most  significant  factor  in 
the  development  of  British  industry. 

Our  own  society  —  the  American  Engineering  Standards 
Committee — was  started  in  October,  1918,  and  has  been  ac- 
tively at  work  for  about  a  year.  At  first  it  consisted  of  repre- 
sentatives of  the  American  Institute  of  Electrical  Engineers, 
American  Institute  of  Mining  and  Metallurgical  Engineers, 
American  Society  of  Civil  Engineers,  American  Society  of 
Mechanical  Engineers,  and  American  Society  for  Testing 
Materials.  Upon  invitation,  three  Government  departments — 
War,  Navy,  and  Commerce — joined  in  the  movement,  and  ap- 
pointed representatives;  and  later,  provision  was  made  for 
representation  upon  the  main  Committee  of  other  bodies  of 
national  scope  interested  in  standardization.  At  the  time  the 
Committee  was  organized  there  were  more  than  100  American 
societies  actively  engaged  in  standardization  work;  but  there 
were  no  systematic,  unified  methods  of  co-operation,  and  there 
had  been  a  widespread  recognition  of  the  need  of  some  central 
agency  for  the  purpose. 

The  functions  of  the  Committee  are:  to  unify  methods  of 
arriving  at  engineering  standards;  to  secure  co-operation  be- 
tween various  interested  organizations,  in  order  to  prevent 
duplication  of  work  and  promulgation  of  conflicting  standards ; 
to  act  as  an  authoritative  channel  of  co-operation  in  interna- 
tional engineering  standardization;  to  promote  in  foreign 
countries  the  knowledge  of  recognized  American  standards; 
to  collect  and  classify  data  on  standards ;  and  to  act  as  a  bureau 
of  information  regarding  standardization. 


786  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

Scope  of  the  Work 

The  scope  of  the  work  which  is  being  carried  out  under  the 
auspices  and  rules  of  procedure  of  the  Committee  is  very 
broad.  The  following  types  of  work  are  found  among  the 
standardization  projects  which  are  now  under  way: 

1.  Definitions   of  technical   terms   used   in   engineering 
work,  specifications,  and  contracts. 

2.  Specifications  for  materials. 

3.  Methods  of  tests,  especially  acceptance  tests  for  mate- 
rials and  apparatus. 

4.  Dimensional  standardization  to  secure   interchange- 
ability  of  supplies — for  example,  screws,  nuts,  and 
bolts. 

5  Dimensional  standardization  to  secure  the  inter-work- 
ing of  parts,  and  of  inter-related  apparatus,  made  or 
assembled  by  different  manufacturers,  such  as  shafts, 
pulleys,  etc. 

6.  Safety  codes,  to  secure  uniformity  in  requirements  for 
safety  in  apparatus  and  equipment,  and  in  industrial 
processes. 

r  7.  The  limitation  of  the  number  of  types,  sizes  and  grades 
of  manufactured  products — an  exceedingly  important 
and  far-reaching  subject. 

Specific  Examples 

It  may  be  well  to  mention  two  or  three  specific  projects : 

The  British  Engineering  Standards  Association  suggested 
Anglo-American  agreement  on  a  standard  series  of  cross- 
sectional  shapes  for  structural  steel.  A  committee  was  or- 
ganized on  which  are  representatives  of  organizations  inter- 
ested in  the  question.  Among  them  are  the  Association  of 
American  Steel  Manufacturers,  American  Society  of  Civil 
Engineers,  Society  of  Naval  Architects  and  Marine  Engineers, 
American  Bureau  of  Shipping,  U.  S.  Navy,  and  the  Railway 
Car  Manufacturers'  Association.  Considerable  progress  has 
been  made,  and  a  representative  of  the  committee  was  abroad 
during  the  early  summer  to  confer  with  tlie  British. 


NATIONAL  AND  INTERNATIONAL  STANDARDIZATION     78? 

Another  example  arises  also  from  an  international  proposal, 
this  time  from  Belgium,  that  there  be  international  standard- 
ization for  the  non-ferrous  metals.  They  outlined  in  detail 
what  they  thought  should  be  done  on  the  question  of  zinc — the 
methods  of  sampling  zinc  ore,  methods  of  analysis,  allowances 
for  moisture  content,  etc.  A  committee  is  being  organized  for 
the  work  on  zinc,  under  the  leadership — technically  called 
sponsorship — of  the  American  Zinc  Institute  and  the  Ameri- 
can Society  for  Testing  Materials.  On  this  committee  all  the 
societies  that  are  concerned  in  the  subject  will  be  represented. 

Passenger  and  freight  elevators  for  buildings  are  built  to  a 
large  extent  to  special  order.  On  account  of  lack  of  recognized 
standards,  adequate  provision  is  not  made  in  the  architect's 
plans,  and  steel  work  is  often  up  before  fundamental  decisions 
on  elevators  are  made,  and  more  or  less  confused  and  wasteful 
conditions  result.  At  the  joint  request  of  the  Elevator  Manu- 
facturers' Association  and  the  American  Institute  of  Archi- 
tects, a  conference  was  called.  There  were  14  interested  or- 
ganizations that  were  represented.  The  action  taken  was 
enthusiastic  and  unanimous  that  a  standardization  of  ele- 
vators, based  on  fundamental  considerations,  should  be  under- 
taken. Arrangements  are  being  made  for  a  thoroughly  rep- 
resentative sectional  committee  to  carry  out  the  detailed 
technical  work. 

Another  illustration,  which  is  typically  American,  is  the 
matter  of  safety  codes.  There  have  been  in  the  past  at  least 
100  organizations  formulating  safety-codes.  Nearly  all  of  the 
48  States  have  bodies  that  have  the  authority  *to  promulgate 
safety-codes.  At  a  conference  in  Washington  in  January* 
1920,  where  more  than  100  organizations  were  represented,  it 
was  unanimously  voted  that  a  comprehensive  program  of 
safety-codes  should  be  undertaken,  and  that  it  should  be 
handled  under  the  auspices  and  rules  of  procedure  of  the 
American  Engineering  Standards  Committee,  in  order  that 
there  be  proper  co-ordination,  elimination  of  overlap,  etc. 
Active  work  is  now  in  progress  on  about  30  such  codes.  State 
commissions,  which  are  the  bodies  responsible  for  the  legal 
adoption  and  enforcement  of  safety-codes,  associations  of  in- 
surance companies,  national  engineering  societies,  manufac- 
turers' and  industrial  associations,  labor  and  civic  organiza- 


rss       PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

tions,  and  technical  bureaus  of  the  Federal  Government  are  all 
heartily  co-operating  in  the  work.  The  committees  respon- 
sible for  the  formulation  of  each  of  the  codes  are  made  up  of 
representatives  of  such  of  these  bodies  as  are  interested  in  the 
particular  code  in  question. 

Economic  and  Industrial  Significance 

If  standardization  is  carried  out  on  a  sound  engineering 
basis : 

1.  It  enables  buyer  and  seller  to  speak  the  same  language, 
and  makes  it  possible  to  compel  competitive  sellers  to 
do  likewise. 

2.  In  thus  putting  tenders  on  an  easily  comparable  basis, 
it  promotes  fairness  in  competition,  both  in  domestic 
and  in  foreign  trade. 

3-  It  lowers  unit-costs  to  the  public,  by  making  mass 
production  possible,  as  has  been  so  strikingly  shown 
in  the  unification  of  incandescent  lamps  and  auto- 
mobiles. 

4.  By  simplifying  the  carrying  of  stocks  it  makes  deliv- 
eries quicker  and  prices  lower. 

5.  It  decreases  litigation  and  other  factors  tending  to 
disorganize  industry,  the  burden  of  which  ultimately 
falls  upon  the  public. 

6.  It  eliminates  indecision  both  in  production  and  utiliza- 
tion— a  prolific  cause  of  inefficiency  and  waste. 

7.  By  focusing  on  essentials,  it  decreases  selling  expense, 
one  of  the  serious  problems  of  our  economic  system. 

8.  By   concentrating  on   fewer  lines,   it   enables   more 
thought  and  energy  to  be  put  into  designs,  so  that  they 
will  be  more  efficient  and  economical. 

9.  It  stimulates  research,  to  which  it  is  closely  allied. 

10.  It  is  one  of  the  principal  means  of  getting  the  results 
of  research  and  development  into  actual  use  in  the 
industries. 

11.  It  helps  to  eliminate  practices  that  are  merely  the 
result  of  accidental  or  tradition,  which  impede  de- 
velopment. 


NATIONAL   AND   INTERNATIONAL    STANDARDIZATION       789 

12.  By  concentration  on  essentials,  and  the  consequent 
suppression  of  confusing  elements  intended  merely  for 
sales  effect,  it  helps  to  base  competition  squarely  upon 
efficiency  in  production  and  distribution  and  upon  in- 
trinsic merit  of  product. 

A  stock  argument  often  used  against  standardization  is  the 
claim  that  it  results  in  crystallization  and  the  throttling  of 
development.  Quite  the  contrary  is  true  if  the  work  is  carried 
out  on  a  sound  basis.  Crystallization,  when  it  occurs,  results 
from  mental  attitude,  and  not  from  sound  engineering  stand- 
ardization. As  just  stated,  standardization  in  itself  is  a  pow- 
erful incentive  to  research,  and  is  one  of  the  chief  means  of 
getting  the  results  of  research  actually  utilized.  In  attempting 
to  arrive  at  standards  agreement  is  frequently  prevented  by  a 
lack  of  facts,  and  this  leads  to  the  getting  of  those  facts. 

Benefits  of  Research, 

Dr.  W.  R.  Whitney,  the  director  of  one  of  our  great  indus- 
trial research  laboratories,  has  said  that  the  benefits  of  re- 
search and  development  work  to  the  public  are  far  greater 
than  to  the  manufacturer;  that  while  a  series  of  investiga- 
tions may  benefit  the  manufacturer  to  the  extent  of  millions, 
the  ultimate  benefit  to  the  public  will  be  in  hundreds  of  mil- 
lions. A  striking  example  that  Dr.  Whitney  had  in  mind  was 
the  incandescent  electric  lamp.  It  is  doubtful  if  there  is 
another  article  in  any  of  our  industries  that  represents  more 
research  work  either  in  quantity  or  in  quality.  The  benefits 
that  have  accrued  to  the  manufacturer  and  to  the  public  could 
not  have  been  realized  had  the  research  work  not  been  supple- 
mented by  thorough-going  standardization. 

Organization  and  Methods 

The  American  Engineering  Standards  Committee  itself, 
usually  referred  to  as  the  Main  Committee,  is  composed  at 
present  of  47  members,  representing  17  member-bodies,  which 
are  as  follows : 

American  Electric  Railway  Association. 
American  Institute  of  Electrical  Engineers. 
American  Institute  of  Mining  and  Metallurgical  Engi- 
neers. 


TOO        PROCEEDINGS  OF  AMERICAN  MINING  CONGRESS 

American  Society  of  Civil  Engineers. 
American  Society  of  Mechanical  Engineers. 
American  Society  for  Testing  Materials. 
Electrical  Manufacturers*  Council — 

Associated  Manufacturers  of  Electrical  Supplies, 

Electric  Power  Club, 

Electrical  Manufacturers'  Club. 
Fire  Protection  Group — 

Asociated  Factory  Mutual  Fire  Insurance  Companies, 

National  Board  of  Fire  Underwriters, 

National  Fire  Protection  Association, 

Underwriters'  Laboratories. 
Gas  Group — 

American  Gas  Association, 

Compressed  Gas  Manufacturers'  Association, 

International  Acetylene  Association. 

National  Electric  Light  Association. 
National  Safety  Council. 
Society  of  Automotive  Engineers. 
U.  S.  Department  of  Agriculture. 
U.  S.  Department  of  Commerce. 
U.  S.  Department  of  the  Interior. 
U.  S.  Navy  Department. 
U.  S.  War  Department. 

The  Committee  does  not  duplicate  the  work  of  other  organi- 
zations. On  the  contrary,  in  acting  as  a  clearing-house  for 
standardization,  it  eliminates  duplication,  as  very  substantial 
results  have  already  shown. 

The  Main  Committee  is  solely  an  administrative  and  policy- 
forming  body,  and  does  not  pass  upon  the  technical  details  of 
standards.  The  formulation  of  a  standard  is  in  the  hands  of 
a  working  committee,  technically  called  a  "sectional  com- 
mittee," made  up  of  representatives  designated  by  the  various 
bodies  interested.  The  Main  Committee  must  approve  the  per- 
sonnel of  each  sectional  committee,  as  being  authoritative  and 
adequately  representative  of  the  various  interests  concerned. 
Producers,  consumers,  and  general  interests,  are  to  be  repre- 
sented on  every  sectional  committee  dealing  with  standards  of 
a  commercial  character. 


NATIONAL   AND   INTERNATIONAL    STANDARDIZATION       791 

Sponsor  Bodies 

In  one  important  particular  the  method  of  work  of  the 
American  Engineering  Standards  Committee  differs  from  that 
of  the  other  national  bodies.  This  is  the  use  of  what  are 
termed  "sponsor"  bodies.  When  the  Committee  was  formed 
there  were  already  a  large  number  of  organizations  doing 
standardization  work,  some  of  whom  had  accomplished,  and 
were  engaged  in,  very  important  work.  This  led  to  a  policy  of 
decentralization.  Each  sectional  committee  is  organized  by, 
and  under  the  leadership  of,  one  or  more  of  the  principal  bodies 
interested  and  known  as  sponsor. 

Special  provision  is  made  for  the  approval  of  important 
standards  in  existence  prior  to  1920,  without  going  through 
the  full  formal  machinery  of  a  sectional  committee. 

It  is  to  be  noted  that  each  industry,  or  branch  of  industry, 
is  wholly  autonomous  in  its  standardization  work,  the  Main 
Committee  not  dealing  with  the  technical  matters  in  any  way, 
but  merely  assuring  that  each  body  or  group  concerned  in  a 
standard  shall  have  the  opportunity  to  participate  in  its  for- 
mulation, and  providing  systematic  means  of  co-operation  in 
the  work. 

The  Committee  has  decided  that  "if  it  is  the  desire  of  any 
industry  to  have  a  general  committee,  representative  of  the 
industry  as  a  whole,  as  a  means  of  developing  and  correlating 
the  standardization  work  of  the  industry,  the  arrangement 
will  be  eminently  satisfactory  to  the  American  Engineering 
Standards  Committee."  Such  a  general  correlating  committee 
for  mining  standardization  has  been  formed,  the  nucleus  being 
two  representatives  from  each  of  five  leading  mining  bodies — 
the  American  Mining  Congress,  the  American  Institute  of 
Mining  and  Metallurgical  Engineers,  the  U.  S.  Bureau  of 
Mines,  the  Mining  and  Metallurgical  Society  of  America,  and 
the  National  Safety  Council. 

If  requested  to  do  so  by  a  responsible  organization,  the  Main 
Committee  calls  a  conference  of  the  interested  bodies  to  decide 
whether  it  is  desirable  that  a  given  piece  of  standardization 
work  shall  be  undertaken,  and  if  so,  what  its  scope  shall  be. 
In  this,  ajid  in  its  work  generally,  the  Committee  is  not  an 
initiating  body,  Consideration  will  show  that  this  policy  is 


792  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

very  conducive,  if  not  necessary,  to  cordial  co-operative  work. 
For  example,  if  the  Committee  were  to  call  such  a  conference 
on  its  own  initiative,  its  action  in  doing  so  might  be  misunder- 
stood and  resented  as  an  attempt  to  dominate,  while  by  not 
taking  the  initiative  it  becomes  perfectly  clear  that  the  pur- 
pose is  to  serve. 

Machinery  for  International  Standardization 

The  American  Engineering  Standards  Committee  is  in 
touch  with  all  the  other  national  standardizing  bodies,  and  is 
actively  co-operating  with  several  of  them. 

There  are  at  present  three  international  standardizing 
bodies — the  International  Electrotechnical  Commission,  the 
International  Commission  on  Illumination,  and  the  Interna- 
tional Aircraft  Standards  Commission.  Each  of  these  com- 
missions is  composed  of  national  committees  in  the  different 
countries.  The  International  Aircraft  Standards  Commission 
has  a  quasi-governmental  status. 

In  the  other  fields  there  is  as  yet  no  machinery  for  general 
international  standardization.  Each  national  body  deals  di- 
rectly and  independently  with  any  of  the  other  national  bodies 
with  which  it  wishes  to  co-operate  on  any  specific  project. 
Plans  are  now  being  made  in  Europe  for  a  conference  in  the 
spring  of  1921  to  further  international  standardization,  and  to 
take  first  steps  toward  systematizing  methods  of  co-operation 
between  the  different  national  bodies. 

European  Activity 

Early  in  1920  I  had  the  opportunity  of  visiting  the  national 
standardizing  bodies  of  Belgium,  France,  Great  Britain,  and 
Holland.  It  is  surprising  to  see  the  amount  and  the  intensity 
of  standardization  work  being  undertaken  in  Europe.  One  con- 
tinually heard  the  term  "mass  production,"  and  the  statement 
that  the  extensive  introduction  of  it  into  industry  through 
standardization  is  an  economic  necessity  for  Europe  today. 
Dimensional  standardization  is  being  carried  much  further 
than  has  been  attempted  in  America,  and  standardization  on  a 
national  scale  is  being  woven  into  industrial  fabric  much  more 
intimately  than  it  is  here. 

These  conditions  prevail  to  an  extraordinary  extent  in  Ger- 
many, where  the  economic  pressure  is  so  great.  It  is  being 


NATIONAL   AND   INTERNATIONAL    STANDARDIZATION       793 

carried  further  than  would  generally  be  thought  desirable  in 
America.  Considerable  work  is  being  done  in  the  standard- 
ization of  design,  and  in  some  cases  uniform  design  of  com- 
plete apparatus  is  proposed  for  the  entire  German  industry. 
It  is  urged  that  a  great  increase  in  efficiency  and  economy  in 
production  and  utilization  will  result  from  pooling  experience 
and  skilled  in  design,  and  that  it  will  be  of  great  value  in 
foreign  trade,  for  example,  in  maintaining  service  stations. 

The  standardization  movement  is  one  of  co-operation 
throughout  each  branch  of  industry,  and  between  the  different 
branches  of  industry  whose  interests  touch  or  overlap,  and 
will  inevitably  lead  to  a  large  measure  of  international  stand- 
ardization. 

For  years  there  has  been  a  growing  feeling  among  leaders 
in  industry,  which  was  heightened  by  the  experiences  of  the 
war,  that  our  industries  function  too  much  as  independent 
units,  and  not  enough  as  articulated  parts  of  a  national  whole. 
It  is  not  too  much  to  say  that  standardization  offers  a  major 
opportunity  toward  the  integration  of  our  industries  on  a 
national  scale,  so  that  they  may  function  in  a  truly  national 
way. 


794          PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 


STANDARDIZATION  AT  THE  UNITED  STATES  BUREAU 
OF  STANDARDS 

By  G.  K.  BURGESS 

The  Bureau  of  Standards  welcomes  the  opportunity  of  par- 
ticipating in  these  first  annual  conferences  of  the  American 
Mining  Congress  on  standardization,  and  the  director,  Dr. 
S.  W.  Stratton,  regrets  he  was  not  able  to  be  present  in  person 
to  take  part  in  the  discussions  and  present  a  statement  of  the 
work  that  the  Bureau  is  doing  in  the  field  of  standardization. 

This  Bureau  was  founded  in  1901.  At  the  present  time  it 
has  a  personnel  of  about  850,  and  is  located  in  a  200-acre 
tract  just  outside  of  the  city  of  Washington,  D.  C.  In  10 
permanent  and  several  temporary  structures  the  plant  repre- 
sents a  capital  expenditure  of  $4,000,000.  The  budget  for 
1920  is  $1,200,000. 

How  the  Bureau  Works 

The  scientific  and  technical  work  of  the  Bureau  is  grouped 
in  nine  administrative  divisions,  which  are  arranged  accord- 
ing to  the  subject-matter  coming  under  the  jurisdiction  of  the 
Bureau.  These  divisions  are:  Weights  and  Measures,  Elec- 
tricity, Heat,  Optics,  Chemistry,  Engineering,  Physics,  Struc- 
tural and  Miscellaneous  Materials,  Metallurgy,  and  Ceramics. 
These  lines  of  work  were  not  all  developed  at  once,  but  the 
Bureau  has  had  a  systematic  and  healthy  growth  directed 
largely  by  the  same  men  who  were  associated  with  Dr.  Strat- 
ton at  the  time  of  the  Bureau's  foundation.  This  has  made 
for  continuity  of  policy,  and  a  rational,  systematic,  develop- 
ment along  lines  laid  down  in  advance  and  carried  out  as 
opportunity  offered. 

At  the  time  of  the  establishment  of  the  Bureau,  it  was  nec- 
essary, in  the  hearings  before  the  Congressional  Committee, 
to  call  in  witnesses  from  many  fields  of  work  to  demonstrate 
the  advisability  or  even  the  desirability  of  the  establishment 
of  a  Bureau  concerned  with  standards.  At  that  time  there 
was  no  National,  State,  or  Municipal  body  concerning  itself 
with  and  responsible  for  standards  of  measurement  on  any 
comprehensive  scale.  In  the  field  of  materials  there  was  the 


STANDARDIZATION   BY   BUREAU   OF    STANDARDS  795 

American  Society  for  Testing  Materials,  founded  in  1898, 
which,  from  the  start,  had  been  concerning  itself  with  the  pro- 
motion of  knowledge  of  the  materials  of  engineering  and  the 
standardization  of  specifications  and  the  methods  of  testing. 
The  membership  of  this  Society  at  the  time  of  the  foundation 
of  the  Bureau  of  Standards  was  lesss  than  200,  whereas  now, 
as  an  evidence  of  the  growth  of  the  standards  idea  in  the  field 
of  engineering  materials,  membership  of  the  American  Society 
for  Testing  Materials  is  some  2900  persons.  About  the  time 
of  the  establishment  of  the  Bureau,  the  large  engineering  soci- 
eties began  to  interest  themselves  with  the  various  aspects  of 
the  standardization  field.  This  interest  in  standards  cul- 
minated in  the  formation  of  the  American  Engineering  Stand- 
ards Committee  in  October,  1918,  which  after  a  year  largely 
devoted  to  questions  concerned  with  scope,  organization,  and 
methods  of  functioning  is  now  well  launched  on  a  firm  basis 
with  a  very  rapidly  expanding  program.  A  list  of  the  technical 
organizations  of  the  country  drawn  up  last  year  showed  there 
were  over  260  of  such  that  are  actively  interested  in  one  way 
or  another  in  the  subject  of  standards. 

Co-operation  Between  Government  Departments 

In  the  Government  Departments,  during  these  20  years, 
closer  relations  and  interchange  of  experience  in  the  formula- 
tion of  specifications  and  standards  has  been  developing,  al- 
though some  of  the  Departments  have  been  and  still  are 
handicapped  by  an  inadequately  equipped  personnel  for  han- 
dling such  questions  with  entire  satisfaction  to  themselves. 
The  question  may  be  asked,  "What  attitude  does  the  Bureau 
of  Standards  take  toward  other  organizations,  Governmental, 
and  especially  non-Govermental,  in  the  field  of  standardiza- 
tion?" This  may  perhaps  best  be  answered  by  considering  the 
relations  in  the  past  between  the  Bureau  of  Standards  and 
such  bodies.  Let  us  take  first  the  Government  Departments : 
In  the  hearings  preceding  the  establishment  of  the  Bureau, 
representatives  of  the  various  Departments  were  asked  to 
testify  as  to  what  help  such  a  Bureau  would  be  to  their  Depart- 
ment. In  the  light  of  future  developments  this  testimony 
today  makes  very  interesting  reading.  Representatives  of 
one  of  the  largest  Departments  requiring  a  great  deal  of  high- 
class  technical  work  testified  that  such  a  Bureau  would  render 


796  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

no  service  to  their  Department.  It  is  a  matter  of  record, 
however,  that  this  particular  Department  has  called  for  the 
services  of  the  Bureau  more  than  has  any  other,  and  largely  for 
the  very  reason  that  it  has  so  many  highly  technical  questions 
involving  specifications,  standards,  and  properties  of  mate- 
rials and  performance  of  equipment,  that  in  the  very  nature  of 
things  it  was  inevitable  that  the  existence  of  such  an  organiza- 
tion as  the  Bureau  of  Standards  equipped  for  experimental 
work  on  fundamental  constants,  properties  of  material,  and 
methods  of  measurement,  would  have  to  be  used  by  such  a 
department. 

The  Bureau  has  acted  in  an  advisory  or  consulting  capacity 
to  many  of  the  Government  Departments  on  questions  in- 
volving specifications  and  standards,  and  has  carried  out  many 
investigations  at  the  instigation  of  these  Departments  on  mat- 
ters primarily  of  interest  to  them. 

Other  Standardization  Societies  Desirable 

We  may  state  it  as  an  axiom,  that  the  Bureau  of  Standards 
encourages  the  formation  and  growth  of  any  other  organiza- 
tion, whether  it  be  public  or  private,  which  has  among  its  ob- 
jects the  progress  or  improvement  in  the  standardization  field 
and  in  the  dissemination  of  knowledge  concerning  standards. 
The  standardization  field  is  one  of  practically  unlimited  extent, 
and  each  one  of  the  numerous  organizations  in  the  country 
that  are  concerned  with  the  subject  has  some  particular  phase 
of  it  that  it  wishes  to  cultivate.  In  so  far  as  its  facilities 
admit,  the  Bureau  of  Standards  is  ready  at  all  times  to  work 
in  harmony  with,  and  when  desired  in  co-operation  with,  all 
movements  looking  toward  the  improvement  of  standards  and 
the  methods  of  standardization.  There  are  few,  if  any, 
aspects  of  the  development  of  standards  and  specifications,  at 
least  concerning  matters  relating  in  whole  or  part  to  various 
branches  of  engineering,  in  which  the  Bureau  of  Standards  can 
not  be  of  some  use.  To  refer  again,  as  an  example,  to  the 
work  of  the  American  Society  for  Testing  Materials,  it  has 
been  mutually  advantageous  to  the  Society  and  to  the  Bureau 
to  work  in  close  harmony  in  the  preparation  of  specifications 
for  engineering  materials.  A  great  deal  of  the  experimental 
work  outlined  by  the  several  committees  of  this  Society  has 
been  carried  out  in  the  Bureau  laboratories,  and  members  of 


STANDARDIZATION   BY   BUREAU    OF    STANDARDS  797 

the  Bureau  are  represented  on  many  of  the  Society's  com- 
mittees. We  believe,  and  in  this  I  can  speak  both  for  the 
Bureau  of  Standards  and  the  American  Society  for  Testing 
Materials,  that  this  close  co-operation  and  co-ordination  of 
effort  has  worked  to  the  very  great  benefit  of  the  engineering 
public. 

Again,  the  Bureau  of  Standards  welcomed  the  founding  of 
the  American  Engineering  Standards  Committee,  on  which 
Committee  the  Bureau  has  three  representatives.  It  will  be 
remembered  that  in  the  preparation  of  standards  which  are 
to  be  reported  to  the  Standards  Committee  there  is  a  "sec- 
tional committee"  appointed  to  formulate  a  given  standard, 
and  there  is  one  or  more  especially  interested  organizations 
named  "sponsor"  to  push  actively  the  constructive  work  on 
the  standard.  The  Bureau  of  Standards  has  been  designated 
as  sponsor  in  the  preparation  of  a  considerable  number  of 
standards,  including,  for  example,  several  in  connection  with 
the  preparation  of  industrial  safety-codes  as  follows:  Elec- 
trical Safety  Code,  Gas  Safety  Code,  Head  and  Eye  Protection, 
Lightning  Protection,  Logging  and  Saw-Mill  Machinery, 
among  a  list  of  37  codes  which  are  in  various  stages  of  com- 
pletion. 

A  Wide  Field  in  Standardization 

The  Bureau  of  Standards  recognizes  that  the  field  of  stand- 
ardization is  an  extensive  one ;  and  the  functions  of  the  Bureau 
may  be  briefly  stated  as  the  development,  construction,  cus- 
tody, and  maintenance  of  reference  and  working  standard  and 
their  inter-comparison,  improvement,  and  application,  in 
science,  engineering,  industry  and  commerce.  For  convenience, 
the  Bureau  groups  standards  into  five  classes:  (1)  "Standards 
of  Measurement,"  which  includes  reference  and  working  stand- 
ards for  measurements  of  all  kinds  for  expressing  the  quan- 
titative aspects  of  space,  time,  matter,  energy,  motion,  and 
their  inter-relations  as  illustrated  by  length,  area,  volume, 
mass,  density,  pressure,  thermal,  electrical,  and  other  physical 
measurements,  which  have  for  their  purpose  to  aid  accuracy  in 
industry,  assist  commerce  in  size  standards,  promote  justice 
in  daily  trade,  and  facilitate  precision  in  science  and  tech- 
nologic research.  (2)  "Standard  Constants."  or  what  we 
may  call  natural  constant  or  the  measured  numerical  data  rep- 


798          PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

resented  by  fixed  physical  constants,  such  as  mechanical 
equivalent  of  heat,  melting  and  boiling  points,  heats  of  com- 
bustion, electro-chemical,  and  atomic  weights,  and  the  like, 
which  we  have  as  an  exact  basis  for  study,  experiment,  com- 
putation, and  design,  furnish  an  efficient  control  for  industrial 
processes  in  securing  reproducible  and  uniformly  high  qual- 
ity and  output,  to  secure  uniformity  of  practice  in  instruments 
and  tables  and  aid  laboratory  research  by  reducing  errors  and 
uncertainty  caused  by  the  use  of  data  of  doubtful  accuracy. 
(3)  "Standards  of  Quality,"  which  are  illustrated  by  specifi- 
cations for  materials  used  in  engineering,  which  fix  in  measur- 
able terms  a  property  or  group  of  properties  for  determining 
the  quality  in  question,  securing  high  utility  in  the  products 
of  industry  by  stabilizing  the  standard  of  quality,  furnishing 
a  scientific  basis  for  fair  dealing,  avoiding  disputes  or  provid- 
ing means  to  settle  questions,  promoting  truthful  branding 
and  advertising  as  well  as  precision  and  the  avoidance  of 
waste.  (4)  "Standards  of  Performance,"  or  specifications  of 
operative  efficiency  or  action  for  machines  and  devices.  (5) 
"Standards  of  Practice,"  such  as  codes  and  regulations  impar- 
tially analyzed  and  formulated  after  study  and  experiment  into 
standards  of  practice  for  technical  regulation  of  construction, 
installation,  operation,  and  based  upon  standards  of  measure- 
ment, quality  and  performance;  such,  for  example,  are  the 
safety  codes  above  mentioned. 

Specific  Examples  of  the  Bureau's  Work 

To  give  a  complete  account  of  the  standardization  work  of 
the  Bureau  would  surely  take  us  far  afield,  but  it  may  not  be 
without  interest  to  give  a  summary  of  certain  of  the  standard- 
ization activities  as  illustrative  of  the  methods  of  procedure, 
and  emphasis  will  be  placed  on  those  cases  showing  our  meth- 
ods of  co-operation  with  other  bodies.  In  the  field  of  funda- 
mental standards  of  measurement  and  the  determination  of 
•standard  constants  the  Bureau  considers  itself  the  final  author- 
ity for  the  country,  but  in  the  development  of  standards  of 
quality,  and  more  particularly  in  the  establishment  of  stand- 
ards of  practice,  the  Bureau  considers  it  does  its  most  effective 
work  in  co-operation  with  the  interested  bodies. 


STANDARDIZATION   BY   BUREAU   OF    STANDARDS  799 

Screw-Threads 

Let  us  first  consider  briefly  the  work  of  the  National  Screw 
Thread  Commission  established  by  Congress  on  July  18,  1918, 
made  up  of  representatives  of  the  Government,  the  Society  of 
Mechanical  Engineers  and  the  Society  of  Automotive  Engi- 
neers and  of  which  the  Director  of  the  Bureau  of  Standards 
is  chairman.  The  task  of  this  Commission  is  the  establishment 
of  screw-thread  standardization  from  the  standpoint  of  inter- 
changeable manufacture,  and  includes  the  setting  up  of  a 
series  or  system  of  threads  with  definite  specifications  as  to 
form  and  dimensions  expressed  in  measurable  terms.  The 
Commission  has  decided  that  the  thread  form  should  be  that 
known  as  the  "U.  S.  form" — there  should  be  two  series  of 
threads,  a  coarse  and  a  fine,  and  there  should  be  four  classes 
of  fit  provided  for, ,  loose,  medium  or  standard,  close,  and 
wrench  fit.  There  have  been  established  a  set  of  pitches  and 
tolerances  for  each  class,  and  the  Commission  still  has  to  for- 
mulate a  considerable  number  of  rules  regarding  threads, 
tubes,  taps,  bar  stock,  and  dimensions  of  bolt  heads  and  nuts. 
The  experimental  work  for  the  Commission  has  been  carried 
out  largely  at  the  Bureau  of  Standards. 

Research  in  Electrolysis 

As  an  example  of  the  co-operative  method  adopted  by  the 
Bureau  in  questions  involving  engineering  practice  on  a  con- 
siderable scale  in  various  communities,  there  may  be  men- 
tioned that  of  electrolysis  survey  and  prevention.  This  is  a 
problem  that  has  been  studied  more  particularly  in  its  relation 
to  conditions  in  cities  and  in  some  cases  to  inter-urban  trans- 
mission, but  nevertheless  may  have  its  applications  in  certain 
cases  to  the  mining  industry.  The  method  of  carrying  out 
these  investigations  is,  however,  typical  of  the  way  the  Bureau 
would  take  up  problems  falling  in  its  field  which  might  be 
desired  by  the  mining  industry.  Briefly,  our  methods  in  elec- 
trolysis investigations  have  been  the  following:  Field  surveys 
are  carried  out  on  the  actual  conditions  in  the  districts  to  be 
studied.  This  often  requires,  for  example,  modified  forms  of 
apparatus  for  measuring  current  flow  in  pipes  and  leakage 
flow  from  pipes.  In  fact,  the  electrolysis  problem  has  required 
the  development  of  a  whole  series  of  modified  apparatus  for 


800          PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

the  purpose.  There  arise  special  problems  such,  for  example, 
as  the  actual  facts  concerning  the  phenomena  of  corrosion  of 
lead,  and  as  what  may  be  expected  under  the  conditions  of 
alternating  current  and  of  direct  current.  This  requires  lab- 
oratory as  well  as  field  research.  From  its  surveys  and  experi- 
mental studies,  the  Bureau  has  been  able  in  many  cases  to 
recommend  modifications  that  have  eliminated  or  greatly  re- 
duced the  very  harmful  effects  of  electrolysis  in  cities.  A  not 
unimportant  function  of  the  Bureau  has  been  its  position  of 
an  impartial  technical  advisor  as  between  the  diverse  interests. 
There  is  also  in  existence  an  American  Committee  on  Elec- 
trolysis, which  represents  all  of  the  great  national  associations 
of  utilities  companies,  and  is  co-operating  with  the  Bureau  in 
conducting  extensive  research  in  the  field  of  electrolysis  miti- 
gation. The  research  program  was  formulated  by  the  Bureau 
and  approved  by  the  Committee,  and  this  research  work  will 
be  carried  out  jointly.  Some  of  the  work  under  way  is  the 
effect  of  pipe  drainage  on  underground  systems,  especial  atten- 
tion being  given  to  the  possibility  of  joint  electrolysis  on  high 
resistance  joints  and  interchange  of  current  between  drained 
systems.  It  will  be  seen  from  this  brief  statement  that  several 
aspects  of  this  electrolysis  branch  of  research  by  the  Bureau 
may  have  direct  application  in  the  mining  industry. 

Standardizing  Coal-Mine  Scales 

Another  item  that  may  be  of  particular  interest  to  the 
American  Mining  Congress  is  the  Bureau's  work  on  investiga- 
tion of  mine-scales.  In  August,  1917,  it  was  brought  to  the 
attention  of  the  Bureau  that  a  serious  condition  of  affairs  ex- 
isted in  the  coal-fields  of  Allegany  county,  Maryland,  as  a 
result  of  disputes  continually  occurring  between  the  miners 
and  operators  in  regard  to  the  condition  of  the  scales  and 
methods  used  in  weighing  the  coal  mined  by  the  workers,  upon 
which  their  wages  depended.  The  miners  distrusted  the 
weighings  obtained  from  the  scales  in  use,  and  believed  that 
they  were  not  receiving  the  full  amount  of  pay  to  which  they 
were  entitled.  No  method  of  remedying  the  situation  had 
been  found,  and  it  had  become  so  acute  that  a  general  strike 
was  impending,  and  would  certainly  have  occurred  had  not 
the  Bureau  promptly  intervened  and  obtained  a  postponement 
of  this  action  while  an  investigation  was  conducted.  This 


STANDARDIZATION    BY   BUREAU   OF    STANDARDS  801 

matter  was  considered  to  be  of  the  greatest  importance  on 
account  of  the  special  necessity  for  continued  production  of 
coal  at  this  time,  when  it  is  so  vitally  needed. 

No  attempt  was  made  to  test  all  the  scales  in  the  region, 
those  being  selected  for  test  at  mines  where  the  friction  be- 
tween operators  and  employees  was  most  pronounced.  As  a 
corollary  to  the  test  of  scales,  an  investigation  was  conducted 
into  the  matter  of  average  tare  weights  and  other  matters 
closely  related  to  the  accuracy  of  the  weights  obtained. 

It  was  demonstrated  that  the  grievances  of  the  miners  were 
in  many  cases  well-founded.  The  scales  had  in  many  instances 
been  improperly  installed ;  no  proper  attention  to  their  main- 
tenance had  been  given  throughout  long  periods  of  service; 
and,  in  at  least  one  instance  fraud  in  weighing  was  very 
strongly  indicated.  The  result  of  all  these  conditions  was  that 
very  serious  errors  of  use  were  common — not  a  single  scale 
examined  being  within  the  tolerance  allowable  in  such  work; 
moreover,  important  errors  were  in  every  case  in  favor  of  the 
operator. 

This  work  is  being  continued  with  additional  portable  equip- 
ment, and  the  investigation  extended  into  new  mining  regions 
including  the  bituminous  fields  of  Kentucky,  Tennessee,  Ohio, 
West  Virginia,  and  Georgia.  In  general,  it  may  be  said  that 
the  tests  made  were  found  to  have  a  very  desirable  effect  on 
the  regular  production  of  coal.  In  those  cases  where  the  scales 
were  found  accurate,  distrust  and  suspicions  in  the  minds  of 
the  workers  were  allayed,  and  operations  continued  with  better 
feelings  on  both  sides ;  in  other  cases  where  scales  were  found 
to  be  inaccurate,  corrected  measures  were  applied,  and  both 
parties  to  controversies  were  satisfied. 

Sulphur  and  Phosphorous  in  Steel 

Still  another  type  of  co-operative  work  to  which  reference 
may  be  made  is  the  metallurgical  investigation  under  the 
auspices  of  a  Joint  Committee  representing  all  interested 
parties  including  Government,  manufacturers,  specification 
making  bodies,  and  large  users  of  steel,  to  determine  from  a 
series  of  experiments  carried  out  on  a  large  scale  both  in  the 
plants  and  in  the  laboratory  of  the  effect  of  sulphur  and  phos- 
phorous on  steel,  for  the  purpose  of  arriving  at  fair  limits  of 
these  deleterious  elements  in  the  specifications  for  steel. 


802          PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

From  the  above  illustrations  I  trust  to  have  made  it  evident 
that  the  Bureau  of  Standards  in  its  standardization  work  takes 
the  position  that  it  can  be  most  effective  in  co-operating  with 
those  organizations  both  public  and  private  who  are  interested 
in  developing  standards  in  any  particular  field.  It  is  undoubt- 
edly the  case  that  the  mining  industry  will  find  it  to  its  advan- 
tage to  call  on  the  Bureau  not  only  for  experimental  work  in 
determining  fundamental  questions  of  fact  regarding  measure- 
ment and  the  quality  of  material  entering  into  mining  equip- 
ment and  accessories,  but  also  I  trust  that  you  will  find  it 
beneficial  to  take  advantage  of  the  experience  that  the  Bureau 
of  Standards  has  had  in  the  past  in  developing  standards  in 
other  lines,  and  I  am  instructed  to  say  by  the  Director  that  the 
Bureau  of  Standards  is  at  your  disposal  for  this  purpose. 

Permit  me  to  expresss  my  admiration  for  the  spirit  shown 
in  these  Standardization  Conferences,  and  my  astonishment  at 
the  surprising  amount  of  progress  already  made  in  the  stand- 
ardization field  as  related  to  the  mining  industry.  It  is  hardly 
necessary  for  me  to  emphasize  again  as  so  many  speakers  have 
done,  the  economic  and  far-reaching  benefits  of  standardization 
which  has  abundantly  been  proved  to  be  worth  many  times 
the  cost  in  not  only  money,  but  in  time  and  thought  and  energy 
spent  upon  it.  On  behalf  of  the  Bureau  of  Standards,  there- 
fore, I  extend  to  this  Standardization  Conference  our  most 
hearty  congratulations  and  best  wishes  for  continued  pros- 
perity in  the  standardization  field. 


MINE  ACCOUNTING  803 

MINE  ACCOUNTING* 

By  LAWRENCE  K.  DIFFENDERFER,  Treasurer,  Vanadium  Corporation 
of  America,  New  York 

Each  mining  company  seems  to  use  a  different  system  of 
accounting.  Because  of  this,  and  because  mines  are  frequently 
in  undesirable  regions,  companies  experience  great  difficulty 
in  securing  competent  mine  accountants.  Recognizing  the 
necessity  of  a  tmif  orm  system  of  accounting,  this  paper  is  sub- 
mitted, being  the  result  of  12  years  of  actual  experience  as  a 
mine  accountant.  It  is  not  intended  to  cover  the  technical  part 
of  mine  accounting,  but  the  practical  side ;  and  is  for  operat- 
ing heads. 

Too  much  care  cannot  be  exercised  in  the  selection  of  the 
mine  accountant.  He  is  an  invaluable  asset.  He  must  be 
more  than  a  bookkeeper,  and  should  understand  all  operations 
about  a  mine. 

Mine  accounting  should  be  divided  into  three  general  divi- 
sions, namely:  (1)  "Operating  Expense";  (2)  "Capital  Ac- 
count"; and  (3)  "Deferred  Charges." 

Operating  Expense 

This  account  should  cover  all  expenditures  incidental  to 
producing  the  product,  including  items  of  repairs  and  mainte- 
nance, as  well  as  reserves  for  depreciation,  depletion,  obso- 
lescence and  development. 

Capital  Account 

This  account  should  include  all  expenditures  incidental  to 
the  creating  of  a  permanent  or  fixed  asset ;  and  proper  reserve 
for  depreciation,  obsolescence  and  depletion  should  be  set  up 
and  charged  to  operating  expenses  concurrently. 

Deferred  Charges 

Unless  the  general  balance-sheet  reflects  the  true  financial 
condition  of  a  company,  it  is  worthless.  The  true  current 
position  of  a  company  is  the  most  important  for  all  financial 
purposes.  The  cost  sheet  is  also  worthless  unless  true  cost  is 
shown,  and  the  greatest  care  should  be  exercised  to  keep  the 
costs  absolutely  correct  and  uniform. 


*An  abstract. 


804  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

Wherever  the  shrinkage  or  overhead  sloping  system  is  in 
use,  generally  one-third  of  the  ore  broken  in  any  given  period 
is  hoisted,  and  the  remaining  two-thirds  held  in  the  stopes 
until  the  level  is  stoped  out. 

In  one  instance,  where  500,000  tons  of  ore  had  been  left  in 
stopes,  which  at  a  breaking  cost  of  44  cents  per  ton,  represents 
current  assets  amounting  to  $220,000,  this  was  not  reflected 
in  the  current  position  of  the  company  on  the  general  balance 
sheet.  It  therefore  follows  that  wherever  more"  ore  is  broken 
in  any  given  period  than  is  hoisted,  credit  should  be  given  for 
the  same  to  operating  expense  and  charged  to  the  proper  asset 
account  in  the  current  position  of  the  company ;  and  whenever 
more  ore  is  hoisted  than  is  broken,  operating  expense  should 
be  charged  for  the  same  and  this  same  account  credited. 

It  is  sometimes  stated  that  this  asset  is  questionable  on 
account  of  the  hazardous  operation,  but  it  should  be  conceded 
that  the  main  shaft  should  be  of  a  permanent  nature,  other- 
wise all  operations  in  the  mine  are  jeopardized,  and  should 
the  walls  cave  and  the  ore  which  is  broken  in  stopes  be  lost,  it 
is  a  direct  charge  to  income  and  should  not  be  taken  through 
the  current  costs. 

If  prospecting  for  ore  proves  its  existence,  then  the  expense 
of  exploration  should  be  considered  as  a  deferred  charge ;  if  it 
does  not  prove  ore,  then  the  cost  should  be  charged  direct  to 
income  or  profit  and  loss. 

Development  is  a  deferred  charge  and  should  be  so  consid- 
ered. The  main-shaft  station,  grizzly,  and  loading  pockets  are 
capital  expenditures,  and  should  be  capitalized  and  depreci- 
ated. This  can  be  done  on  the  basis  of  number  of  tons  hoisted, 
or  on  a  percentage  basis. 

Drifts  and  crosscuts  are  usually  considered  as  development ; 
and  raises  and  chute  holes  to  a  point  of  coning  out  are  included 
under  this  head.  Ore  is  usually  recovered  in  development.  It 
is  reasonable  to  assume  that  the  cost  of  tramming,  hoisting, 
and  milling  ore  received  from  development  is  the  same  as  ore 
which  comes  from  stopes,  as  the  ore  from  the  former  and  that 
from  the  latter  cannot  be  kept  separate,  and  therefore  becomes 
mixed.  So  instead  of  keeping  these  costs  separate — which 
costs  are  always  an  estimate  based  upon  percentages — it  is 
better  to  credit  development  ore  at  the  breaking  cost  of  the 
ore  in  the  stopes. 


MINE   ACCOUNTING  805 

Depletion 

Generous  reserves  for  depletion  should  be  set  up  and  credited 
to  reserve  for  depletion,  and  charged  to  operating  expense, 
and  so  shown  on  the  cost  sheet.  The  simplest  and  best  method 
is  to  take  the  number  of  tons  of  ore  that  is  in  reserve,  as  cal- 
culated by  a  disinterested  engineer,  and  divide  the  same  into 
the  cost  of  the  property,  exclusive  of  the  amount  expended  for 
development,  or  for  buildings  and  machinery.  It  is  wise  to 
be  conservative  in  this  matter,  and  not  let  the  reserve  be  stated 
higher  than  that  can  be  justified. 

Retirements 

Whenever  a  unit  of  equipment  or  building  becomes  obso- 
lete or  useless,  and  is  retired,  the  proper  account  should  be 
credited  with  same  at  cost.  If  the  unit  is  sold,  then  the  pur- 
chaser's account — accounts  receivable — should  be  charged  at 
the  sales  price.  Reserve  for  depreciation  should  be  charged 
for  the  depreciation  set  up  on  said  unit  of  equipment,  and 
operating  expense  either  debited  or  credited  for  the  loss  or 
profit  on  the  same.  Sometimes  it  is  advisable  to  create  an 
account  on  the  cost  sheet,  entitled  'retirements/  in  order  to 
keep  this  expense  separate. 

Depreciation  and  Obsolesence 

Generous  reserve  should  be  set  up  for  depreciation  and  obso- 
lescence, based  upon  past  experience.  The  Revenue  Law  allows 
the  setting  up  of  depreciation  reserves  based  upon  the  theory 
that  if  the  unit  of  equipment  or  building  has  been  repaired, 
then  it  has  not  depreciated  by  that  amount  which  was  ex- 
pended for  repairs  and  maintenance  in  said  period.  There- 
fore, the  depreciation  rate  should  take  this  fact  into  considera- 
tion at  the  time  of  creating  said  rate,  and  the  repairs  and 
maintenance  should  be  deducted  in  setting  up  the  reserve. 

There  are  only  six  sub-divisions  of  accounting  necessary  at 
a  plant;  these  are:  (1)  'Working  Fund';  (2)  'Payroll';  (3) 
'Stores  (materials  and  supplies)';  (4)  'Shipping  (product  and 
miscellaneous)';  (5)  'Production  Records';  and  (6)  'Depreci- 
ation Ledger/ 

[Mr.  Diffenderfer's  paper,  of  which  the  above  is  an  abstract,  included 
13  forms  of  reports  applying  to  these  sub-divisions,  but  as  it  is  imprac- 
ticable to  reproduce  them,  they  are  omitted.] 


80t>  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

STANDARDIZATION  OF  METAL-MINING  ACCOUNTING 
By  T.  O.  McGRATH,  Bisbee,  Ariz. 

Even  though  a  mining  property  be  equipped  with  the  best 
mechanical  appliances,  has  an  organization  of  high  ability, 
and  has  employes  embued  with  the  spirit  of  co-operation,  the 
business  cannot  be  intelligently  managed  without  a  knowledge 
of  the  results  of  operation  and  the  condition  of  the  business 
for  each  operating  period,  for  each  department,  and  for  the 
business  as  a  whole.  Such  information  is  obtained  by  proper 
accounting. 

Accounting  for  metal  mines  consists  of  three  main  groups, 
namely,  (1)  General  Accounting;  (2)  Cost  Accounting  and 
Statistics;  and  (3)  Economic  Accounting. 

General  accounting  determines  the  condition  of  the  business, 
and  the  profit  and  loss  for  each  operating  period.  Cost  ac- 
counting determines  the  profit  and  loss,  and  the  variation  in 
the  cost  of  each  department  for  each  period  of  operation. 
Economic  acounting  determines  which  of  several  methods  of 
operation  is  most  profitable  under  different  market  prices  of 
metal. 

General  accounting  and  cost  accounting  for  metal  mining 
have  been  fairly  well  developed  during  the  past  10  years,  but 
mostly  along  individual  lines.  So  far,  little  has  been  done  in 
economic  accounting,  although  great  sayings  could  be  made 
by  it,  especially  during  periods  when  there  are  wide  fluctua- 
tions in  metal  prices. 

This  discussion  will  be  limited  to  the  fundamental  prin- 
ciples of  general  accounting,  and  to  recommendations  for  a 
standard  system  of  accounting  for  metal  mines. 

General  Accounting 

I  am  well  aware  of  the  fact  that  no  standard  system  of  ac- 
counts can  be  devised  that  would  be  applicable  to  each  sepa- 
rate department,  due  to  different  mining  and  metallurgical 
methods.  However,  there  are  certain  basic  principles  that 
can  be  followed,  upon  which  the  accounting  and  cost  structure 
can  be  built  to  obtain  uniformity  in  the  accounting  and  cost 
data  for  each  operating  unit  having  similar  problems. 


STANDARDIZING  METAL-MINING  ACCOUNTING 


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808          PROCEEDINGS   OF   AMERICAN   MINING   CONGRESS 

Chart  I  shows  the  fundamentals  of  the  business  of  mining 
in  the  natural  order  that  must  be  accounted  for  in  any  com- 
plete and  correct  system  of  mine  accounts.  The  business  be- 
gins with  the  capital  investment.  Production  operations  start 
with  the  disbursements  of  working  capital,  which  are  made  in 
order  that  production  may  be  obtained.  This  is  followed  by 
sales  of  the  production  in  order  that  receipts  may  be  created 
by  delivery  of  the  sold  product  to  transportation  agents,  which 
in  turn  is  liquidated  by  cash  payments  from  customers,  and 
this  cash  is  used  with  which  to  meet  new  disbursements,  and 
so  forth.  The  business  of  operation  continues  to  rotate  through 
these  five  stages  as  long  as  there  is  production.  At  the  end  of 
each  period,  results  of  operations  are  shown  in  profit  and  loss, 
dividends  and  surplus,  and  the  condition  of  the  business  is 
shown  by  a  balance-sheet. 

These  accounting  and  business  principles  are  uniform  for 
all  metal  mines  and  the  general  accounting  for  metal  mines 
could  be  standardized  with  the  exception  of  the  expense  ac- 
counts, which  would  vary  to  conform  with  the  different  meth- 
ods of  mining  and  treatment. 

Accrued  or  Cash  Basis 

In  working  out  a  system  of  accounts,  the  first  matter  that 
must  be  decided  is  whether  the  accounting  shall  be  kept  upon 
an  accrued  or  cash  basis.  At  the  present  time,  most  of  the 
large  corporations  keep  their  accounts  upon  an  accrued  basis, 
which  is  necessary  to  obtain  a  complete  and  correct  system  of 
costs.  Therefore  we  may  safely  state  that  the  accrued  basis 
of  accounting  has  been  accepted  as  standard  in  metal  mining. 

Standard  Statements  of  Profits  and  Loss,  and  of  Balance-Sheet 

There  are  two  accounting  statements  that  are  of  vital  in- 
terest to  the  officers,  stockholders,  and  directors  of  each  com- 
pany; also  to  other  units,  and  to  the  investing  public.  These 
are  the  income,  or  profit  and  loss  statement,  for  the  month  and 
year,  and  the  balance-sheet  or  statement  of  the  condition  of 
the  business  at  the  end  of  such  periods. 

There  is  no  reason,  except  lack  of  interest,  for  not  having 
these  two  statements  uniform  for  all  units.  Some  companies 
publish  clear  and  complete  statements  of  profit,  and  of  the 
condition  of  their  business  properly  grouped  and  arranged; 


STANDARDIZING  METAL-MINING  ACCOUNTING  809 

while  the  reports  of  others  are  so  drawn  and  arranged  that  it 
is  practically  impossible,  even  for  the  officers,  to  obtain  a  satis- 
factory analysis  therefrom.  While  there  has  been  a  great 
improvement  in  the  form  and  nature  of  these  two  statements 
since  the  enactment  of  the  income  and  excess-profit  tax  laws, 
there  is  no  reason  why  these  should  not  be  further  improved 
and  made  uniform  for  the  whole  industry.  This  could  easily 
be  accomplished  by  agreeing  upon  uniform  grouping  of  the 
profit  and  loss  statement,  and  balance-sheet. 

If  this  were  obtained,  the  results  and  conditions  of  each 
operating  company  could  easily  be  compared  with  that  of 
other  units,  and  would  be  of  great  value  to  all  concerned.  In 
the  past,  the  result  of  improper  and  incomplete  statements  of 
earnings  has  furnished  the  labor  agitator  with  good  argument 
with  which  to  convince  workmen  that  the  organization  by 
which  they  were  employed  could  well  afford  to  make  unreason- 
able concessions,  as  well  as  leading  the  taxing  commissions  to 
believe  that  such  mines  should  pay  excessive  taxes.  Also  one 
of  the  reasons  for  the  lack  of  interest  in  copper  has  been  at- 
tributed to  the  lack  of  proper  presentation  to  the  general 
public  of  the  facts  of  the  industry  and  its  possibilities.  To 
give  the  consuming  and  general  public  clear  and  concise  facts 
would  without  doubt  be  of  general  benefit  to  the  industry. 

Cost  Accounting 

I  do  not  believe  that  it  is  necessary  to  emphasize  the  need 
of  proper  costing;  that  is  self-evident. 

At  the  present  time,  metal  mining  includes  mines,  mills, 
smelters,  and  refineries,  principally  large  units,  employing 
hundreds,  and  in  some  cases,  thousands  of  men.  The  saving 
or  loss  of  a  few  cents  per  man  per  day  in  the  use  of  powder, 
tools,  and  other  supplies,  and  in  'dead*  time  of  labor,  or  effort 
improperly  expended,  results  in  some  cases  in  the  difference 
between  profit  and  loss,  especially  during  times  of  low  prices 
for  metals. 

Cost  accounting  in  itself  cannot  obtain  efficiency,  but  once 
efficient  standards  have  been  obtained  in  the  different  depart- 
ments of  the  organization,  proper  accounting  and  costing  will 
then  show  the  variations  from  these  standards  and  the  source 
of  the  variation,  enabling  the  manager,  department  heads,  and 


810  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 


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STANDARDIZING  METAL-MINING  ACCOUNTING  811 

others  to  correct  immediately  any  deficiency  or  waste  before 
that  unit  has  become  unprofitable. 

I  do  not  believe  that  it  is  necessary  to  emphasize  the  need 
of  uniformity  in  compiling  the  accounts  and  costs  by  each  com- 
pany in  metal  mining.  If  each  one  compiled  these  in  a  uniform 
and  correct  manner,  results  in  the  various  mines  and  plants 
having  like  methods  and  problems  could  be  compared,  and 
proper  standards  of  achievement  could  be  easier  and  more 
quickly  determined.  Such  uniformity  would  tend  to  broaden 
the  view  and  interest,  and  increase  the  co-operation  among 
the  different  units  of  the  industry,  as  well  as  to  minimize  per- 
sonality and  prejudice,  not  only  among  the  superintendents  of 
labor,  but  among  the  workmen  themselves,  who  become  preju- 
diced by  the  lack  of  uniformity  in  different  mines  or  even  in 
different  divisions  of  the  same  mine. 

Analyzing  the  Disbursements 

Costing  is  concerned  with  analyzing  disbursements  and  pro- 
duction. In  order  that  the  former  may  be  correct  and  uniform, 
disbursements  should  be  segregated  into  the  different  groups 
of  expense,  prepaid  expense,  and  assets.  The  expense  should 
then  be  segregated  to  each  department,  sub-department,  and 
departmental  unit.  Production  should  also  be  segregated  to 
each  department  and  unit,  so  as  to  allow  of  the  determining  of 
the  cost  per  unit  of  production  or  of  operation. 

In  Chart  II,  entitled  'Operating  Disbursement  Accounts,' 
are  all  the  disbursements  segregated  into  expense  and  assets 
that  are  involved  in  the  operation  of  a  mine  producing  smelt- 
ing ores.  This  chart  does  not  show  the  administrative  dis- 
bursements for  expense  and  investments,  as  these  are  not 
generally  under  the  direction  of  the  manager. 

This  chart  shows  a  complete  record  of  all  disbursements 
whether  current  or  actual,  accrued,  and  deferred.  It  is  best 
to  make  up  such  a  chart  of  disbursement  accounts  in  order  to 
insure  that  all  disbursements  are  being  recorded  each  month 
in  proper  manner.  Also,  such  a  chart  fixes  the  matter  more 
clearly  in  the  mind,  and  acts  as  a  guide  and  reference  for  those 
who  perform  the  work  of  compiling  and  segregating  dis- 
bursements. 


812  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

Principal  Costs 

The  present  practice  is  to  keep  four  kinds  of  costs,  such  as : 

(1)  Production;  (2)  Departmental  Production;  (3)  Unit 
Operating;  (4)  Unit  Construction  and  Equipment  Costs. 

Of  course  there  are  the  estimated  costs  that  are  made  up  by 
the  engineering  department  in  connection  with  proposed  new 
construction  and  equipment,  against  which  the  actual  costs  are 
checked.  The  production  cost  is  obtained  by  dividing  the  total 
production  into  the  items  of  expense  appearing  in  the  profit 
and  loss  account.  In  determining  the  departmental  produc- 
tion cost,  each  department  such  as  ore  extraction,  or  mining, 
milling,  smelting,  etc.,  should  be  divided  into  sub-departments 
to  conform  to  the  actual  organization  and  work  in  each  of  the 
departments.  Then  the  expense  of  the  department  should  be 
segregated  to  each  of  these  sub-departments,  and  the  expense 
for  each  of  the  sub-departments  further  segregated  into  at 
least  six  elements,  namely,  (1)  Labor;  (2)  Supplies;  (3) 
Power;  (4)  Repairs;  (5)  Replacements;  and  (6)  Indirect 
expense. 

By  adding  the  amount  of  the  expense  of  each  element  for 
each  sub-department,  the  total  expense  for  the  department  and 
for  each  element  is  obtained,  and  the  dividing  of  the  produc- 
tion of  the  department  into  the  amount  of  expense  gives  the 
cost  for  each  element  for  each  sub-department,  and  for  the 
department  as  a  whole.  By  segregating  the  expense  into  these 
six  elements,  it  is  possible  to  trace  the  variations  in  costs  from 
month  to  month,  and  informs  the  department  head  where  and 
what  to  investigate.  This  method  of  determining  the  depart- 
mental production  costs  is  already  in  general  practice  by  sev- 
eral groups  of  mines.  The  differences  are  in  the  naming  of  the 
accounts  for  the  different  sub-departments,  and  in  the  dividing 
of  the  sub-departments:  but  these  are  matters  that  could  be 
easily  remedied. 

The  same  method  should  be  followed  in  determining  unit 
operating  costs  except  that  the  elements  of  labor,  supplies,  re- 
pairs, replacements,  and  indirect  expense  should  be  detailed 
into  as  many  items  as  it  is  found  necessary  to  enable  the  trac- 
ing of  all  fluctuations. 

The  unit  operating  cost  is  the  cost  kept  on  each  operating 


STANDARDIZING  METAL-MINING  ACCOUNTING  813 

unit  or  sub-department,  as  for  instance  the  cost  of  steam,  air, 
electricity,  cost  of  sinking,  stations,  drifting,  raising,  stoping, 
etc.,  and  are  figured  upon  the  operating  unit  instead  of  upon 
the  production  unit  for  the  department.  It  would  be  of  great 
advantage  to  have  such  costs  obtained  uniformly  by  all  mining 
units. 

Methods  of  Determining  Costs 

There  are  two  principal  methods  of  determining  depart- 
mental and  unit  costs :  First,  the  Departmental  Unit  Method ; 
and  second,  the  Departmental  Pro-rated  Method. 

The  former  is  the  dividing  of  each  department  into  sub- 
departments,  and  these  into  units  regardless  of  whether  or  not 
they  are  productive  or  overhead  departments,  and  the  segre- 
gating of  the  expense  into  the  proper  elements  and  the  dis- 
tributing of  the  expense  to  each  sub-department  and  unit  which 
is  kept  intact. 

The  second  method  segregates  the  departments  and  expense 
in  a  like  manner,  but  further  divides  the  sub-departments  into 
productive  and  overhead  and  pro-rates  the  expense  of  the  over- 
head departments  to  the  productive  departments. 

This  latter  method  is  the  one  used  by  manufacturing  con- 
cerns making  more  than  one  article  for  sale,  when  it  is  neces- 
sary to  get  the  exact  production  cost  for  each  article  in  order 
to  determine  the  proper  selling  price.  However,  in  mining, 
where  there  is  only  one  principal  product,  with  sometimes  a 
by-product  which  is  treated  as  a  credit,  the  pro-rated  method  is 
not  necessary,  and  only  increases  the  amount  of  bookkeeping 
and  segregating,  and  makes  the  costs  more  complicated  and 
difficult  to  comprehend  and  analyze.  The  Departmental  Unit 
Method  should  be  the  one  adopted  as  standard. 

Uniformity  of  Cost  Determinations 

While  it  is  not  probable  that  all  unit  and  departmental  pro- 
duction costs  of  metal  mining  will  be  standardized,  neverthe- 
less the  industry  could  be  divided  into  the  several  groups  that 
mine  and  treat  ores  in  a  similar  manner,  and  the  cost  for 
each  of  these  groups  could  be  standardized  and  determined 
uniformly. 

At  the  present  time  there  are  possibilities  of  large  savings  in 


814  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

fuel  and  power  at  most  properties.  It  is  only  occasionally  that 
the  power  costs  are  accurately  determined.  There  are  usually 
large  wastes  in  the  use  of  supplies  and  in  the  purchasing  of 
improper  supplies,  which  could  be  limited  by  correct  cost 
methods  properly  presented. 

The  determining  of  boiler  horse-power,  the  amount  of  com- 
pressed air,  and  of  all  power  and  other  unit  costs  should  be 
and  could  be  made  uniform.  In  some  cases  the  drifting  cost  in 
one  mine  will  be  based  upon  the  actual  expense  at  the  face  of 
the  drift,  while  in  another  mine  in  the  same  district  this  cost 
will  include  the  pro-rated  cost  of  overhead.  This  destroys  the 
possibility  of  comparison  and  applies  to  all  costs  when  com- 
piled by  different  methods. 

Uniformity  in  Compiling  Efficiency  Factors 

Not  only  should  the  cost  data  of  expense  and  production  be 
compiled  in  a  uniform  manner,  but  the  production  factors 
necessary  to  determine  efficiency  should  be  uniformly  kept. 
For  instance,  the  shifts  of  men  employed  in  a  certain  depart- 
ment or  in  a  certain  unit  should  be  compiled  in  like  manner 
each  month,  and  for  each  unit  of  the  industry,  so  that  if  there 
is  any  variation  in  the  output  the  compilation  will  show  the 
facts.  The  feet  advanced  per  man-shift  in  drifts  and  raises, 
and  tons  obtained  per  man-shift  in  stopes,  etc.,  as  well  as  the 
methods  of  determining  mill  and  smelter  recoveries  and  losses, 
should  be  compiled  .by  all  companies  in  the  same  manner.  This 
would  enable  one  mine,  mill,  or  smelter  to  determine  quickly 
whether  or  not  the  efficiency  of  the  men  in  its  plant  was  equal 
to  that  of  the  employes  in  another  plant,  working  with  the 
same  equipment  and  under  the  same  conditions,  and  would 
enable  the  department  heads  and  supervisors  to  ascertain 
whether  or  not  better  results  obtained  elsewhere  are  due  to 
better  methods,  equipment,  or  efficiency. 

During  times  of  rapid  advances  in  wages  that  are  based  on  a 
sliding  scale,  as  well  as  rapid  advances  in  prices  of  supplies, 
the  cost  for  one  period  may  show  a  decline  over  a  previous 
period,  in  spite  of  increase  in  wages  and  supplies,  due  to  an 
increase  of  efficiency  in  the  workmen.  Also,  during  declining 
prices  and  wages  the  cost  may  show  an  advance  in  spite  of  the 
decline  due  to  a  loss  in  efficiency.  Therefore,  in  order  to  know 


STANDARDIZING  METAL-MINING  ACCOUNTING  815 

positively  the  reason  for  increase  or  decrease  in  the  cost  for 
each  period,  the  necessary  production  factors  should  be  com- 
piled, as  well  as  the  cost  in  dollars.  This  data  should  be  and 
could  be  ascertained  in  a  uniform  manner  by  all  units  of  the 
metal  industry. 

Necessity  of  Departmental  Co-operation 

Most  of  the  metal  produced  comes  from  mines  of  large  or- 
ganizations. It  is  the  tendency  for  each  department  of  such 
companies  to  isolate  itself  from  the  others  and  to  become  preju- 
diced and  indifferent  as  to  the  work  of  the  other  departments, 
and  the  business  as  a  whole.  When  such  a  condition  exists,  it 
is  difficult  to  obtain  correct  accounting  and  cost  data,  and  to 
present  in  proper  form  the  accounting  and  cost  results  for  each 
department,  and  of  the  business  generally. 

Close  association  between  the  heads  of  different  departments 
leads  each  to  a  broader  knowledge  of  the  business,  and  to  value 
the  viewpoint  and  to  profit  from  the  knowledge  and  experience 
of  the  others,  as  well  as  tending  to  eliminate  friction  and 
misunderstanding,  and  to  develop  breadth,  consideration,  tact, 
judgment,  and  the  ability  to  co-operate  and  manage,  to  the 
benefit  of  the  whole  organization,  as  well  as  for  each  depart- 
ment. 

Of  course,  it  is  the  duty  of  the  manager  to  co-ordinate  the 
work  of  each  of  the  departments,  and  to  correct  the  extremes 
resulting  from  isolation.  However,  this  is  difficult  to  accom- 
plish when  there  is  not  a  close  working  contact  between  the 
departments,  or  when  the  manager  has  obtained  his  prelim- 
inary knowledge  of  the  business  as  the  head  of  an  isolated 
department.  The  better  the  organization  and  working  con- 
tact, the  greater  the  benefit  that  can  be  obtained  from  account- 
ing and  costing. 

In  the  mining  business,  as  in  other  lines  of  industry,  the 
matter  of  first  importance  in  connection  with  an  expenditure 
is  whether  it  is  profitable.  This  point  is  lost  sight  of  more 
often  than  is  usually  realized,  due  principally  to  departmental 
isolation. 

In  some  large  organizations,  thousands  of  dollars  are  ex- 
pended each  month  in  compiling  accounting  and  cost  data  that 


816  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

are  never  used  except  for  a  record,  due  to  the  fact  that  they  are 
ready  at  such  a  late  date,  or  in  such  a  manner,  as  to  be  value- 
less to  the  heads  of  operating  departments.  This  waste  could 
be  turned  into  a  profit  by  correct  presentation  of  costs  and  a 
closer  working  agreement  between  the 'different  departments. 

Uniform  Determination  of  Sales  Price 

There  is  no  uniformity  at  present  in  the  recording  of  sales 
prices  received  for  metals.  For  instance,  in  copper  and  lead 
mining,  some  small  producers  will  show  the  price  received  for 
metal  at  the  net  figure  received  from  the  custom  smelter ;  while 
some  of  the  large  producers  will  give  as  the  price  received  the 
net  price  f.  o.  b.  New  York;  and  again  others  give  the  New 
York  price  less  commissions;  while  others  will  show  as  the 
sales  price  the  actual  delivery  price.  This  makes  it  practically 
impossible  to  compile  accurate  statistics  of  prices  received  for 
metals,  and  in  some  cases  where  the  deductions  of  smelters  or 
sales  agents  are  ignored,  the  costs  are  incomplete  and  show  at 
less  than  actual.  This  could  be  easily  remedied  by  adopting 
the  gross  settlement  price  as  standard. 

Summary 

A  brief  of  the  principal  points  of  this  discussion  shows  that 
there  should  be  an  earnest  endeavor  to  obtain  in  metal  mining 
the  following: 

(1)  A  condensed  standard  form  of  profit  and  loss  state- 
ment in  correct  order  giving  the  actual  results  of 
operations. 

(2)  A   standard   form    of   balance-sheet   arranged   in 
proper  groups  and  in  order  showing  the  true  condi- 
tion of  the  business  at  the  end  of  each  period. 

(3)  A  standard  system  of  expense  accounts  based  upon 
the  unit  or  control  system,  for  each  group  of  the 
industry. 

(4)  Uniformity  in  the  determination  and  compiling  of 
production  and  operating  factors,  and  of  recoveries 
and  losses  for  use  in  obtaining  costs  and  efficiency. 

(5)  A  uniform  method  of  recording  sale  prices  received 
for  metals. 


STANDARDIZING  METAL-MINING  ACCOUNTING  817 

In  working  to  obtain  standardization  as  above  set  forth,  we 
should  begin  at  the  top  and  work  down  as  far  as  practicable 
to  carry  out  standardization  of  procedure  without  interfering 
with  individual  requirements,  and  then  confine  efforts  to  ob- 
taining uniformity  in  determining  production  and  operating 
factors  used  for  costing  or  measuring  efficiency. 

I  have  tried  to  set  forth  the  principal  advantages  that  would 
accrue  from  such  standardization.  The  reward  Of  such  an 
achievement  is  certainly  great  enough  to  justify  our  best 
efforts. 


818  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

A  STANDARD  SYSTEM  OF  ACCOUNTING  AND  ANALYSIS  OF 
COST  OF  PRODUCTION 

Presented  by  T.  T.  BREWSTER,  of  the  National  Coal  Association 

The  object  of  the  National  Coal  Association  Committee's* 
work  is  to  propose  a  standard  system  of  accounting  under 
which  all  coal  operators,  so  far  as  the  particular  circumstances 
of  each  case  will  permit,  will  classify  their  operating  expenses 
for  labor  and  material  in  the  same  way,  to  the  end  that  true, 
detailed,  and  comparable  statements  of  cost  of  production  may 
be  readily  obtained;  also  that  all  operators  shall  make  the 
same  distinctions  between  capital  and  operating  expenditures, 
so  that  the  vital  matters  of  depreciation  and  depletion  and 
obsolescence  may  be  treated  with  uniform  consistency  in  ac- 
cordance with  law. 

Preliminary  Considerations 

Before  discussing  the  details  of  an  accounting  system,  it  is 
useful  to  emphasize  the  fundamental  truth  that  every  coal 
mine  consists  of:  owned  or  leased  coal  deposits,  plant,  equip- 
ment, and  development. 

They  all  depreciate  together  as  the  coal  is  exhausted,  for 
when  the  coal  is  gone,  or  the  right  to  the  coal  has  elapsed,  the 
plant  and  equipment  have  little  or  no  value  and  the  develop- 
ment is  lost. 

Capital  investment  in  a  coal  mine  is  not  a  permanent  asset ; 
it  is  only  an  outlay  preliminary  to  the  extraction  of  the  coal; 
it  is  merely  an  advanced  or  deferred  charge  upon  future  in- 
come, which  capital,  if  recovered,  must  be  recovered  with  the 
current  expenses  of  operation  out  of  the  proceeds  of  coal  sold. 

In  coal  mining,  the  exact  unit  for  the  measurement  of  work 
done  is  the  ton  of  coal  mined.  It  is  also  the  exact  unit  for 
measuring  depletion  of  mineral,  wear  and  tear  from  use  of 
equipment,  and  exhaustion  of  development.  Development  is  a 
mere  easement,  the  value  of  which  disappears  when  the  coal 
is  gone. 


*The  Committee  consisted  of   C.   E.   Backus,   T.   T.   Brewster,  W.   M. 
Henderson,  J.  C.  Osgood,  and  Erskine  Ramsey,  with  W.  B.  Reed  as  secretary. 


STANDARD  ACCOUNTING  AND  COST  ANALYSIS  819 

A  coal  mine  being,  as  emphasized,  made  up  of  several  ele- 
ments, all  depreciating  as  the  coal  is  mined,  such  depreciation 
is  composite,  accruing  at  a  rate  concurrent  with  the  rate  of 
extraction.  The  necessary  rate  per  ton  being  determined,  the 
aggregate  depreciatipn  for  any  accounting  period  should,  of 
course,  as  far -as  practical,  be  distributed  among  the  various 
elements  in  proportion  to  their  respective  costs  or  value. 

The  doctrine  that  measures  depreciation  of  coal  mining 
plant  and  equipment  in  terms  of  time — excepting  of  course, 
some  leasehold  propositions — is  fallacious,  as  tested  by  the 
further  assertion  that  a  completely  equipped  mine  could  be 
maintained  indefinitely  without  depletion  or  wear  and  tear  if 
no  coal  were  mined,  by  minor  repairs.  Therefore,  we  insist, 
as  a  general  rule — excepting  some  leaseholds — that  the  correct 
measure  of  the  depletion  and  depreciation  experienced  in  min- 
ing coal  is  the  ton  of  coal  mined. 

After  a  coal  mine  has  been  developed  and  equipped  to  its 
planned  output  capacity,  charges  to  its  Capital  Account  should 
cease,  and  thereafter  there  will  be  few  if  any  permissible 
charges  to  that  account. 

At  the  end  of  each  month,  Operating  Account  should  be 
charged,  and  Depreciation  and  Depletion  credited  with  an 
amount  equivalent  to  the  depreciation  rate  multiplied  by  the 
number  of  tons  mined  during  the  month.  At  the  end  of  the 
year,  Depreciation  should  be  charged  with  the  year's  accumu- 
lation, and  the  respective  elements  of  the  mine  written  off  in 
proper  proportions.  If,  however,  the  operator  prefers  to 
allow  total  Depreciation  to  stand  as  a  credit  on  the  ledger,  it 
should  be  exhibited  in  the  Balance  Sheet  as  a  deduction  from 
the  cost  of  property.  Irrespective  of  which  way  it  is  handled 
on  the  general  ledger,  the  proper  reducing  entries  should  be 
made  against  each  element  of  the  property  in  the  plant  ledger. 

In  the  case  of  mines  operated  under  lease,  if  the  leasehold 
rights  run  longer  than  the  probable  period  required  to  exhaust 
the  estimated  available  coal,  the  same  factor  of  Depreciation 
applies ;  but  if  the  life  of  the  lease  is  shorter  than  the  probable 
period  required  to  get  all  the  coal,  the  monthly  charge  to  Oper- 
ating Account  and  corresponding  credit  to  Depreciation  should 
be  such  proportion  of  the  cost  of  the  mine  as  one  month  is  of 
the  remaining  term  of  the  lease. 


820  PROCEEDINGS   OF   AMERICAN"   MINING    CONGRESS 

Funds  representing  Depreciation  accumulations,  if  not  peri- 
odically applied  to  the  retirement  of  outstanding  securities  or 
obligations,  should  be  kept  liquid  for  that  purpose  or  invested 
in  assets  distinct  from  the  depreciating  property. 

Before  any  profit  or  net  income  can  be  realized,  current  ex- 
penses for  labor  and  for  material  consumed,  current  repairs, 
replacements,  and  depreciation  must  be  made  good  out  of 
gross  income.  Hence,  sound  consideration  of  the  nature  of 
investment  in  coal  mining  or  any  other  wasting  industry 
dictates  that  all  outlay  must  be  clossified  and  dealt  with  as 
follows : 

(a)  The  initial  cost  of  the  mine  in  its  entirety,  chargeable 
to  Capital  Account — which  must  be  redeemed  by  periodically 
setting  aside,  from  current  gross  income,  sufficient  amounts  to 
replace  such  investment  within  the  life  of  the  mine.     It  is 
obvious  that  the  fund  thus  derived  must  be  held  inviolate  for 
ultimate  capital  redemption,  and  if  not  applied  immediately 
to  the  retirement  of  outstanding  securities,  invested  in  assets 
separate  from  the  depreciating  property  or  kept  liquid  in  the 
business. 

(b)  The  cost  of  additions  and  betterments,  so  large  that 
such  costs  should  be  capitalized,  must  likewise  be  redeemed  by 
setting  aside  from  gross  income  adequate  provision  for  reim- 
bursing such  cost  during  the  life  of  the  mine. 

(c)  To  ordinary  Operating  Expense  should  be  charged  the 
cost  of  repairs  and  replacements  of  plant  and  equipment,  and 
also  cost  of  additional  equipment  necessary  because  of  the 
extension  of  workings  to  maintain  the  normal  output. 

Distinction  Between  Capital  and  Operating  Expenditures 

The  drawing  of  distinctions  between  capital  and  operating 
expenditures,  in  the  accounting  involved  in  permanent  enter- 
prises, is  a  favorite  field  for  discussion  among  accountants, 
but  in  the  case  of  coal  mining  or  other  wasting  enterprises, 
experience  teaches  that  the  field  for  discussion,  if  indeed  there 
be  any,  is  extremely  limited. 

After  a  coal  mine  has  been  developed  and  equipped  to  its 
contemplated  or  possible  capacity,  it  is  a  constant  consumer  of 
material  and  supplies  and  equipment,  which,  though  nominally 
of  a  durable  nature,  are  subject  to  destructive  wear  and  tear, 


STANDARD  ACCOUNTING  AND  COST  ANALYSIS  821 

by  reason  of  the  uses  to  which  they  are  put,  and  all  these  ap- 
pliances must  be  kept  in  repair  to  do  their  work  or  the  output 
can  not  be  maintained. 

Mules  and  pit  cars  are  constantly  worn  out,  and  have  to  be 
replaced,  and  as  the  working  faces  advance  with  the  exhaus- 
tion of  the  coal,  the  length  of  haul,  and  consequent  time  of 
circulation  of  pit  cars  between  the  working  face  and  dump 
increases,  more  motors,  mules,  and  pit  cars  have  to  be  supplied 
to  maintain  the  output,  and  the  more  of  these  in  the  mine,  the 
greater  expense  for  replacements  and  repairs. 

Also,  with  the  advance  of  workings,  more  rails  have  to  be 
laid  and  more  copper  wire  or  other  conductors  put  up  to  carry 
power  to  the  working  forces  to  maintain  the  output.  They 
remain  in  place  until  the  mine  is  exhausted,  and  when  they  are 
recovered  have  but  little  net  scrap  value.  In  fact,  any  net 
salvage  is  relatively  very  small. 

The  fact  that  these  expenses  are  continually  recurrent  and 
practically  a  fixed  factor  in  the  cost  of  production  per  ton  from 
year  to  year,  prove  that  they  constitute  an  operating  rather 
than  a  capitalizable  expense. 

Obsolesence 

In  addition  to  the  provisions  for  depreciation  and  depletion 
to  replace  the  capital  sum  invested  in  depreciable  property  and 
charges  for  ordinary  working  expenses,  Operating  Account 
should  be  charged  with  the  residual  value  of  property  (after 
deducting  depreciation,  which  has  been  or  should  have  been 
charged,  and  insurance)  that  may  be  destroyed  by  catas- 
trophe; also  Operating  Account  should  be  charged  with  the 
residual  value  over  accrued  depreciation  and  salvage  of  any 
property  discarded  or  that  has  become  useless  or  obsolete  be- 
fore the  end  of  the  natural  period  of  its  usefulness. 

Necessity  of  Detailed  Analysis 

If  the  only  object  of  an  operator's  periodical  statements 
were  to  exhibit  the  financial  results  of  the  period  covered,  or 
to  contribute  to  general  statistics,  a  short  form  with  a  few 
sub-totals  and  their  extensions  would  be  all  required ;  but  the 
successful  solution  of  the  problems  facing  the  industry  de- 
mands intensive  management  and  economy,  and  as  intensive 


822  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

management  means  careful  and  intelligent  attention  to  detail, 
analytical  acounting  is  necessary. 

The  operating  executive  should  have  a  report  from  each 
mine,  which,  read  in  the  light  of  his  knowledge  of  the  prop- 
erty, will  be  a  comprehensive  narrative  of  what  has  been  done, 
and  reflect  the  physical  conditions  met  with  during  the  period 
covered  by  the  report,  and  exhibit  a  clear  statement  of  the  cost 
of  labor  and  material  expended,  classified  in  accordance  with 
the  natural  sub-divisions  of  the  work  that  has  to  be  done  in 
and  about  a  mine,  so  that  the  economy  and  efficiency  with 
which  each  thing  has  been  done  can  be  studied  critically. 

In  the  majority  of  cases,  the  natural  sub-divisions  of  the 
work  in  and  around  a  coal  mine  are  as  follows : 

1.  Mine  office.  10.     Haulage  and  hoisting. 

2.  Superintendence.  H-     Dumping  and  tallying. 

3.  Engineering.  12«     Preparation. 

4.  Mining.  13'     Railroa(*     car     loading 

and  yard  expense. 

5.  Timbering.  14      Power> 

6.  Deadwork.  15.     Repairs     to     buildings 

7.  Tracklaying.  and    permanent    struc- 

8.  Drainage.  tures. 

9.  Ventilation.  16.     Sundries. 

To  these  sub-divisions  should  be  distributed  the  items  below : 

Mine  Office  Expense — Clerk,  bookkeepers,  janitors,  books  of 
account,  stationery,  office  funiture  and  supplies,  telephone, 
light,  heat,  etc. 

Superintendence — Wages  of  superintendents,  bosses,  mine 
examiners,  watchmen,  and  all  other  direction  and  caring  for 
the  property  in  a  supervisory  capacity.  Safety  lamps,  mine 
telephone,  etc. 

Engineering — Mining  engineer,  helper,  engineering  instru- 
ments and  supplies,  maps,  blueprints,  etc. 

Mining — (a)  Hand  mining.  Miners,  helpers,  shot-firers, 
etc.  (b)  Machine  mining.  In  machine  mines  this  item  should 
be  sub-divided  into  undercutting  and  pit-car  loading.  Under- 
cutting should  be  charged  with 


STANDARD  ACCOUNTING  AND  COST  ANALYSIS  823 

(a)  Generation  and  transmission  of  power,  that  is,  the 
proportionate  share  of  cost  of  power  generated  and 
its  transmission  to  machines   (see  note  on  power 
below) . 

(b)  Maintenance  of  machines,  that  is,  repair  parts,  ma- 
chine picks,  cable  for  electric  machine,  and  air-hose 
for  air  machines.    Shop  and  repair-men  employed 
on  machines  and  labor  of  blacksmiths  sharpening  or 
making  bits  and  such  part  of  the  time  of  head  elec- 
trician spent  in  maintenance  of  machines. 

(c)  Operating  machines:    To  this  sub-division  should 
be  charged  the  wages  of  machine  runners  and  help- 
ers, bit  carriers,  oil,  grease  and  waste,  oil-cans,  hand 
picks,  pick  handles,  jacks,  machine-shovels,  etc.    If 
machines    are    not    equipped   with    self-propelling 
trucks  and  the  machines  are  moved  about  their  sec- 
tions  by  mule   haulage,   such   haulage   should  be 
charged  to  operating  machines. 

Pit-car  loading  needs  no  comment. 

Timbering — Though  timbering  is  imposed  by  physical  con- 
ditions and  is  closely  incident  to  work  at  the  face,  it  is  a  sig- 
nificant item,  and  should  stand  by  itself.  To  this  sub-divi- 
sion should  be  distributed  wages  of  timbermen  and  helpers, 
the  cost  of  props,  cap-pieces,  cross-bars  and  other  timber  used 
in  advancing  work,  such  cost  including  freight  and  the  cost 
of  unloading  and  handling  at  the  mine,  with  the  expense  of 
preparing  and  delivering  to  the  working  face. 

Deadwork — As  every  mine  presents  physical  conditions 
peculiar  to  itself,  no  two  mines  being  alike,  and  as  the  phys- 
ical conditions  fluctuate  as  the  work  progresses,  in  order  to 
work  out  comparable  statements  and  records,  deadwork 
should  be  classified  in  accordance  with  its  nature,  such  as 
yardage,  premium  for  narrow  work,  shooting  rock,  lifting 
bottom,  taking  down  top,  stowing  and  dumping  gob,  clean- 
ing up  falls  and  re-timbering  after  them,  handling  squeezes, 
mine  fires,  or  any  other  work  imposed  by  adverse  physical 
conditions. 

Tracklaying — While  track  is  immediately  connected  with 
and  necessary  for  the  transportation  of  coal  to  the  shaft  bot- 


824  PROCEEDINGS   OF   AMERICAN    MINING    CONGRESS 

torn,  and  hence  a  necessary  item  incident  to  haulage,  it  has 
long  been  regarded  as  a  significant  item  in  the  cost  sheet,  and 
should  stand  by  itself. 

To  this  account  should  be  charged  rails,  ties,  spikes,  and 
fastenings,  and  the  labor  of  grading  roads  and  tracklaying  in 
advancing  work.  Repairs  to  track  should  be  charged  to  Haul- 
age and  Hoisting,  under  maintenance  of  way. 

Purchases  of  track  material  should  be  charged  to  track 
material  account,  and  as  the  material  is  taken  into  the  mine  it 
should  be  credited  and  charged  Tracklaying. 

Drainage — To  this  sub-division  should  be  charged  the  cost 
of  labor  employed  in  connection  with  the  ordinary  removal 
of  water  from  the  workings  of  the  mine,  with  the  expense  of 
repairs  and  maintenance  of  pumps,  pipe-lines,  drains;  also 
the  proper  proportion  of  power  used.  In  some  regions  and 
in  deep  mines  the  tonnage  of  water  handled  and  consequent 
consumption  of  power  is  very  heavy. 

In  the  event  of  a  flood  or  extraordinary  inflow  of  water, 
the  expense  of  recovering  the  mine  or  flooded  workings  should 
be  shown  as  a  special  and  separate  charge  to  Operating  Ac- 
count. 

Ventilation — To  ventilation  should  be  charged  proper  pro- 
portion of  Power  expense  to  represent  power  used  in  driving 
fans.  If  cross-cuts  are  driven  narrow  because  of  physical 
conditions,  the  yardage  should  be  charged  under  Deadwork. 

Labor  and  material  used  in  closing  cross-cuts,  constructing 
overcasts,  mine  doors,  curtains  and  brattice,  should  be  charged 
to  Ventilation;  also  expense  of  cleaning  and  repairing  air- 
courses.  Repairs  and  lubrication  of  fan  and  fan  engine,  pres- 
sure gauges,  etc.,  should  be  charged  to  Ventilation. 

While  trappers  are  rendered  necessary  in  connection  with 
ventilating  doors,  their  work  is  incident  to  haulage  of  coal, 
and  their  wages  should  be  charged  to  Hauling  and  Hoisting 
under  conducting  transportation. 

Haulage  and  Hoisting  should  be  separated  into 

1.  Generation  and  Transmission  of  Power;  that  is,  the  pro- 
portion of  expense  of  generating  power  and  the  construction 
and  keeping  up  of  transmission-lines  and  haulage  circuits. 


STANDARD  ACCOUNTING  AND  COST  ANALYSIS  825 

2.  Care  and  Maintenance  of  Equipment — (a)  Hoisting  and 
haulage  engine  repair  parts,  lubricants,  packing  and  waste,  and 
wages  of  hoisting  engine-man  and  mechanics  employed  in  care 
and  repair.      Hoisting  and  haulage  ropes,  cage  repairs,  and 
replacement;  safety  devices,  guides,  and  sheaves. 

(b)  Care  and  maintenance  of  motors.    When  motor  haul- 
age is  used,  repair  parts,  and  labor  of  care  and  repair. 

(c)  Care  and  maintenance  of  pit  cars.  Labor  and  material 
used  in  keeping  pit  cars   in   repair.      New   cars  replacing 
wrecked  or  worn-out  cars,  also  additional  cars  necessary  to 
maintain  output  by  reason  of  increasing  length  of  haul  after 
mine  has  reached  its  contemplated  output  capacity. 

(d)  Care  and  maintenance  of  livestock;  such  as  harness 
and  stable  supplies.     Grain  and  hay,  and  wages  of  stable-men 
and  veterinary,  clipping  and  shoeing,  etc.    New  mules  replac- 
ing killed  or  worn-out  animals  should  be  charged  to  mainte- 
nance of  livestock. 

3.  Conducting  transportation.    Drivers,  boss  drivers,  mo- 
tormen,  trip  riders,  couplers,  cagers  and  pushers,  oilers  (oil 
and  grease)  trappers  and  switch-throwers,  jackmen,  and  that 
part  of  hoisting  engine-man's  wages  not  charged  to  mainte- 
nance and  repairs. 

4.  Maintenance  of  way ;  that  is,  repairs  to  roads,  cleaning 
roads,  relaying  track,  new  ties,  rollers  for  rope  haulage,  etc. 

Dumping  and  Tallying — Top  cagers,  pushers  and  dumpers, 
weigh  boss,  check  puller  and  track  weighman. 

Preparation — The  proportion  of  power  used  in  operating 
screens,  crushers,  elevators,  conveyors,  picking-tables,  spiral- 
izers,  loading  booms,  etc.,  and  the  cost  of  the  labor  of  attend- 
ants thereon,  such  as  inspectors,  dock  bosses,  sulphur  and  slate- 
pickers,  and  the  labor  of  disposing  of  waste,  all  material  and 
labor  involved  in  the  maintenance  of  repairs  and  replacements 
of  such  apparatus  as  is  used  in  the  preparation  of  coal. 

If  a  washer  is  operated,  such  investment  and  its  operation 
should  stand  by  itself.  The  washer  should  be  charged  with 
the  expense  of  operation,  repairs,  maintenance,  insurance, 
and  its  proper  depreciation,  with  the  value  of  the  raw  coal 
passed  through  it,  either  at  cost  of  production,  or,  preferably, 


826  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

at  the  market  value  obtainable  for  raw  coal,  and  credited  with 
the  out-turn  of  washed  product. 

If  the  result  is  a  credit  balance,  it  should  be  taken  into 
operating  income  as  net  income  from  washer;  if  it  results  in 
a  debit  balance,  it  should  be  deducted  from  operating  income 
as  loss  on  washer  operations. 

Railroad  Car  Loading  and  Yard  Expense — To  this  sub-divi- 
sion should  be  charged  wages,  of  yard  boss,  car  cleaners,  trim- 
mers, car  riders,  car  haulers,  brakemen,  and  all  material  and 
supplies  used  by  them. 

The  expense  of  maintaining  and  operating  mine  tracks,  if 
a  switch  engine  is  employed,  or  if  switching  is  done  by  the 
railroad  for  which  a  special  charge  is  made,  distinct  from  the 
freight  rate,  the  expense  thereof  should  be  charged  to  this 
sub-division. 

Power — The  generation  and  transmission  of  power  is  about 
the  only  expense  about  a  coal  mine  that  is  not  in  total  directly 
chargeable  to  some  one  sub-division  of  operating  work.  To 
it  should  be  charged  the  wages  of  firemen,  fuel-men,  ash- 
haulers,  water-men,  pump-men,  generator  and  compressor 
attendants,  and  such  part  of  hoisting  engine-man's  and  elec- 
trician's time,  or  other  labor  and  material,  as  may  be  em- 
ployed in  the  care,  repair  and  maintenance  of  boilers,  pumps, 
engines,  generators,  air-compressors  or  other  power-gener- 
ating machinery;  wire  and  pipe  used  in  transmission-lines, 
cost  of  water  supply  and  all  coal  consumed,  preferably  at  its 
market-value.  The  cost  of  coal  to  the  operator  for  his  own 
consumption  is  what  he  could  get  for  it  in  the  market.  If  an 
unmerchantable  product  is  used  under  the  boilers,  it  should 
be  charged  at  its  cost  of  production.  If  cost  of  fuel  is  not 
included  in  cost  of  power,  the  accounts  do  not  exhibit  true 
cost.  The  true  cost  should  be  before  the  operate  to  induce 
him  to  estimate  the  possibilities  of  effecting  savings  by  im- 
proving his  plant  or  boiler  room  practice;  also  to  estimate 
the  possibility  of  effecting  economy  by  purchasing  power  of 
outside  service  companies,  or  through  establishing  central 
power  plants.  The  tonnage  consumed  per  annum  under  new 
boilers  by  large  producers  is  very  large,  and  the  cost  thereof 
should  be  clearly  shown. 


STANDARD  ACCOUNTING  AND  COST  ANALYSIS  827 

If  outside  power  is  purchased,  it  should  be  charged  to 
Power. 

Distribution  of  Power  Costs 

The  expense  of  power  should  then  be  distributed  to  the 
different  sub-divisions  of  Operating  Expense,  in  accordance 
with  the  proportion  of  power  employed  in  each  section  of  the 
work. 

Mining,  under  the  sub-division  Undercutting,  should  be 
charged  with  the  proportion  of  power  applied  to  machine 
operation. 

Haulage  and  Hoisting  should  be  charged  under  Generation 
and  Transmission  of  Power,  with  its  proportion  of  power- 
house expense,  as  represents  the,  power  used  by  hoisting 
engines  and  haulage  engines  and  motors. 

Under  the  sub-division  Preparation  should  be  charged  the 
power  used  for  shaker-screens,  picking  tables,  etc. 

Ventilation  should  be  charged  with  the  share  of  expense  of 
power-house,  in  accordance  with  the  power  used  for  driving 
fans. 

Drainage,  with  the  proper  proportion  of  power  used  in 
pumping  water  from  the  mine. 

The  above  suggestion  that  the  expense  of  power  should  be 
distributed  to  the  various  sub-divisions  of  the  work  may  ap- 
pear difficult  to  the  accountant,  and  in  small  operations  such 
distribution  may  be  a  needless  refinement;  and  in  such  cases 
power  may  well  be  shown  as  an  undistributed  item  of  oper- 
ating expense. 

However,  in  large  operations,  the  cost  of  power  is  a  large 
item,  and  the  making  up  of  a  heat  and  steam  balance  will  not 
be  difficult  to  the  well-informed  engineer  or  electrician. 

The  measurement  of  fuel  and  water  and  steam  generation 
compared  with  the  useful  work  being  done,  will  prove  fruit 
ful  in  results.     Such  time  and  effort  is  well  spent,  as  it  lead* 
to  the  detection  of  steam  line  leakages,  engine  cylinders  an<* 
valves  in  bad  condition,  insufficient  power  circuits,  bad  tracV 
bonding,  etc.     The  coal  operator  who  wastes  coal  by  overlook- 
ing preventable  losses  is  like  the  merchant  who  consumes  hi* 
own  stock. 


82S  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

In  his  lucid  and  valuable  book  entitled  'Preventing  Losses 
in  Factory  Power  Plants/  David  Moffat  Myers  well  says: 

"Just  as  the  expert  accountant  is  able  to  analyze  the  expen- 
diture of  one  hundred  dollars  in  a  business  enterprise  and  to 
show  where  some  of  them  are  wasted  or  mis-spent,  and  finally 
to  strike  a  true  balance  between  income  and  expenditure, 
just  as  truly  and  with  as  great  a  degree  of  accuracy  a  trained 
engineer  may  analyze  and  balance  the  expenditure  of  energy 
from  the  original  one  hundred  per  cent  income  or  input,  to  the 
final  machine  horsepower  hours  of  useful  work,  and  in  so 
doing  he  may  point  out  where  certain  portions  of  this  energy 
are  mis-spent  or  wasted,  and  how  they  may  be  saved  and  con- 
verted into  useful  work. 

"There  does  not  exist  a  power  problem  that  is  not  capable 
of  solution  by  the  intelligent  application  of  these  principles  of 
analysis." 

Repairs  to  Buildings  and  Structures — To  this  item  should 
be  charged  labor  and  material  used  in  repairs  of  permanent 
buildings  and  structures  of  the  surface  mining  plant. 

Sundries — Small  and  unimportant  items  of  expense  not 
easily  distributable  to  the  above  sub-divisions  of  Expense. 

Necessity  of  Contingent  Reserve 

In  the  case  of  permanent  enterprises,  the  funds  derived 
from  charges  to  operating  cost  to  cover  depreciation  and 
depletion  are  to  replace  plant  and  equipment  becoming  worn 
out  or  obsolete;  but  in  coal  mining  or  other  wasting  enter- 
prises, the  purpose  of  such  fund  is  to  replace  and  redeem  the 
capital  invested  in  the  wasting  assets,  and  such  duty  of  re- 
demption fully  taxes  the  allowable  charge  for  depletion  and 
depreciation. 

As  a  general  rule,  the  buildings  and  major  items  of  plant 
and  equipment  placed  at  a  coal  mine  are  calculated  to  last,  and, 
with  proper  care  and  repair,  do  last  the  life  of  the  mine,  and 
therefore  obsolescence  of  coal  mine  plant  and  equipment  re- 
sults more  often  from  accident  than  by  installation  of  new 
appliances.  Depletion  and  depreciation  are  items  of  prime 
cost  which  can  be  measured  with  reasonable  exactness  and 
properly  provided  for  by  charges  to  current  expense  of  opera- 
tion; but  coal  mining  is  a  hazardous  business,  and  in  some 
regions  extra  hazardous,  and  obsolescence  being  a  contin- 


STANDARD  ACCOUNTING  AND  COST  ANALYSIS  829 

gency,  common  prudence  dictates,  in  order  to  avoid  possible 
financial  embarrassment,  that  there  should  be  periodically  re- 
served and  built  up  from  net  income  sufficient  provision  to 
meet  any  probable  contingency.  Such  reserve  is  not  an  item 
of  current  cost,  and  therefore  not  deductible  in  determining 
taxable  income,  but  the  cost  upon  the  realization  of  the  con- 
tingency is  a  proper  charge  to  current  expense,  and  should 
then  be  so  charged,  and  not  be  charged  to  contingent  reserve. 

The  increase  in  current  expense,  by  reason  of  such  happen- 
ing, will  reduce  current  net  income,  and  therefore  a  corre- 
sponding amount,  or  as  much  thereof  as  may  be  possible 
should  be  transferred  from  contingent  reserve  to  Profit  and 
Loss. 

The  general  conditions  existing,  and  the  experience  of  any 
mine  or  mining  region,  will  dictate  to  the  operator  the  neces- 
sary provision  for  contingencies. 

Though  maintenance  expense  is  practically  a  constant  fac- 
tor of  current  expense  in  coal  mining,  prudence  also  suggests 
in  accordance  with  the  peculiarities  of  each  case  the  segrega- 
tion from  income  of  a  maintenance  reserve. 

Balance-Sheet 

This  should  show  the  exact  details  of  the  financial  condition 
of  the  business  and  be,  at  the  same  time,  an  historical  narra- 
tive of  the  enterprise.  The  value  of  the  balance-sheet  will  be 
in  exact  measure  of  the  time  spent  on  its  production  and  con- 
sideration. The  more  put  into  a  balance-sheet,  the  more  can 
be  got  out  of  it. 

[A  suggestion  as  to  a  pro  forma  balance-sheet  was  sub- 
mitted by  Mr.  Brewster,  but  this  has  been  omitted.] 

Bookkeeping 

In  the  foregoing,  the  principles  of  accounting  have  been 
touched  upon,  and  it  is  unnecessary  to  write  a  treatise  on 
bookkeeping,  but  it  may  be  useful  to  refer  to  the  main  books 
required  and  to  comment  upon  the  action  of  the  various  oper- 
ating accounts.  The  principal  books  of  account  are:  Gen- 
eral Ledger,  Cash  Book,  Journal,  Voucher  Register,  Sales 
Register,  Coal  Customers'  Ledger, 


830  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

The  Ledger,  Cash  Book,  and  Journal  need  no  comment. 

Voucher  Register — To  avoid  a  multiplicity  of  ledger  ac- 
counts, with  miscellaneous  creditors  from  whom  material  and 
supplies  are  purchased,  the  adoption  of  the  voucher  system  is 
recommended.  The  Voucher  Register  appropriately  ruled, 
both  horizontally  and  perpendicularly  to  allow  the  entry  of 
number,  name  of  payee,  what  for,  date  paid,  and  the  distribu- 
tion under  the  different  headings  of  the  amount  thereof  to  the 
account  or  accounts  to  which  the  items  covered  by  the  voucher 
are  chargeable.  At  the  end  of  each  month  the  total  footing 
should  be  credited  to  vouchers  payable,  and  the  footings  of 
the  various  distribution  columns  charged  to  the  respective 
accounts.  Some  accountants  post  to  the  General  Ledger  direct 
from  the  Voucher  Register,  but  we  recommend  a  journal 
entry  and  posting  from  the  Journal. 

Every  cash  disbursement  should  be  represented  by  a 
voucher,  and  charged  on  the  Cash  Book  to  vouchers  payable, 
with  entry  of  the  number  of  the  voucher  and  name  of  the 
payee. 

Payments  should  be  checked  from  the  Cash  Book  into  the 
when-paid  column  of  the  Voucher  Register;  thus  the  con- 
trolling account  in  the  General  Ledger  covering  miscellaneous 
creditors  will  be  vouchers  payable,  and  the  General  Ledger 
balance  of  this  account  will  agree  with  the  total  of  an  abstract 
of  unpaid  vouchers  drawn  from  the  Voucher  Register. 

Sales  Register — In  cases  where  coal  is  consigned  through 
from  the  mine,  a  convenient  form  of  Sales  Register  page  is  a 
manifest  of  billing  with  columns  on  the  right-hand  side,  for 
the  entry  at  general  office  of  price  and  extension  of  amount, 
these  pages  to  be  carried  in  a  loose-leaf  binder  until  the  end  of 
the  year,  when  they  should  be  permanently  bound. 

The  amount  of  each  invoice  should  be  posted  from  the  sales 
sheet  to  the  debit  of  the  customer's  account  in  the  Coal  Cus- 
tomers' Ledger.  At  the  end  of  the  month  the  total  should  be 
taken  up  in  a  journal  entry,  charging  coal  customers  and 
crediting  the  coal  sales  account  of  the  mine  from  which  the 
coal  is  shipped. 

As  payments  are  received  from  coal  customers,  they  should 
be  credited  to  coal  customers  in  the  Cash  Book.  Names  with 


STANDARD  ACCOUNTING  AND  COST  ANALYSIS  831 

the  amounts  paid  by  each  customer  entered  in  "short."  From 
the  Cash  Book  should  be  posted  the  "shorts"  to  the  individual 
accounts  in  the  Coal  Customers'  Ledger;  thus  the  controlling 
account  in  the  General  Ledger  representing  amounts  due  from 
coal  customers  will  be  coal  customers,  and  the  total  balance  of 
individual  accounts  in  the  Coal  Customers'  Ledger  will  sup- 
port the  balance  in  the  General  Ledger. 

Revenue  Accounts 

Coal  Sales — A  coal-sales  account  with  each  mine  to  be  cred- 
ited with  the  invoice  value  of  coal  sales,  as  per  Sales  Register. 
To  this  account  should  be  charged  any  freights  prepaid  and 
included  in  the  invoice  price,  and  any  allowances  and  adjust- 
ments, and  this  account  closed  out  monthly  to  the  credit  of 
Operating  Account  of  the  mine  from  which  the  coal  is  shipped. 

Rent  of  Dwellings — These  are  credited  with  rents  received ; 
charged  with  the  care,  painting  and  repairs,  taxes,  insurance 
and  depreciation;  and  are  closed  out  monthly  to  the  credit  of 
Operating  Account  for  the  mine  to  which  the  houses  belong. 

Farming  Operations  are  credited  with  the  value  of  crops, 
timber  cut,  rents,  if  rented,  etc. ;  and  charged  with  labor  and 
supplies,  repairs  to  machinery  and  buildings,  small  imple- 
ments, fertilizer,  etc.,  taxes,  insurances  and  depreciation.  If 
the  farm  property  is  identified  with  a  particular  mine,  close 
out  to  the  credit  of  the  Operating  Account  of  said  mine;  or 
if  not  identified  with  a  particular  mine,  close  out  to  income 
account. 

Washer  Operating  Account  is  credited  with  the  proceeds  of 
raw  coal  sent  to  the  washer,  labor  and  supplies,  repairs  to 
buildings  and  machinery,  small  tools,  water-supply  expense, 
taxes,  insurance,  and  depreciation.  If  identified  with  a  par- 
ticular mine,  close  out  each  month  to  debit  or  credit  of  Oper- 
ating Account  of  said  mine.  If  a  central  washer  plant,  close 
out  to  Income  Account. 

Coke-Plant  Operations  are  credited  with  proceeds  of  coke 
sold;  and  charged  with  value  of  raw  coal  sent  to  coke  plant, 
labor  in  and  about  plant,  repairs,  material  and  supplies,  small 
tools,  taxes,  insurance  on,  and  depreciation  of  buildings.  If 
identified  with  a  particular  mine,  close  out  to  Operating  Ac- 


832  PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

count  of  said  mine.     If  a  central  plant,  close  out  to  Income 
Account. 

Mercantile  Operations — If  the  store  is  identified  with  a 
particular  mine,  results  of  the  store  business  should  be  closed 
out  to  the  Income  Account  of  such  mine.  If  not  identified 
with  a  particular  mine,  the  results  of  the  store  business  should 
be  carried  to  Income  Account. 

Expense  Accounts 

General  Expense  is  charged  with  the  salaries  and  expenses 
of  officers;  directors'  fees,  legal  expense,  general  office  rent, 
books,  stationery,  telephone  and  telegraph ;  all  other  expenses 
of  administration  and  maintaining  corporate  existence. 

Close  out  by  charging  to  the  Operating  Account  of  each 
mine  with  such  mine's  just  proportion.  This  is  generally  pro- 
rated in  accordance  with  the  tonnage  furnished  by  each  mine. 

Selling  Expense — All  expenses  connected  with  the  promo- 
tion and  making  of  coal  sales;  advertising;  salesmen's  sal- 
aries as  are  dedicated  to  the  selling  department;  books;  sta- 
tionery; printing;  postage;  telephone  and  telegraph;  office 
rent ;  billing  and  collecting  of  coal  customers'  accounts. 

Close  out  by  charging  to  the  Operating  Account  of  each  mine 
its  proper  proportion,  usually  based  on  tonnage  derived  from 
each  mine. 

Material  and  Supplies. — Vouchers  covering  purchases  of 
material  and  supplies  immediately  used  may  be  distributed 
direct  to  the  debit  of  operating  expense,  but  appropriate  Mate- 
rial and  Supplies  Accounts  should  be  kept  of  such  materials 
as  are  carried  in  stock.  For  example,  in  many  localities  the 
purchase  of  props,  cross-bars,  and  caps  depends  upon  the 
season  of  the  year,  and  not  in  accordance  with  current  con- 
sumption, and  in  such  cases  a  Mine  Timber  Account  should  be 
opened,  to  which  should  be  charged  the  cost  of  timber,  includ- 
ing freight  and  the  cost  of  unloading  and  handling  at  the 
mine.  As  the  timber  is  ^taken  below  it  should  be  credited  to 
Timber  Account  and  charged  to  Operating  Expense,  with  the 
expense  of  preparing  and  delivering  to  the  working  face  under 
the  sub-division  Timbering. 


STANDARD  ACCOUNTING  AND  COST  ANALYSIS  833 

The  purchase  of  rails,  fastenings,  spikes,  and  ties  for  track- 
laying  is  always  in  anticipation  of  future  requirements,  and 
a  Track  Material  Account  should  be  opened,  to  which  the  cost 
of  all  such  material  should  be  charged,  and  as  such  material  is 
taken  below  it  should  be  credited  to  Track  Material  Account 
and  charged  to  Operating  Expense  under  the  sub-division 

Track  Laying. 

The  same  may  be  suggested  as  to  mining  machine  repair 
parts,  but  in  operations  where  five  or  more  mining  machines 
are  used,  it  will  be  found  that  there  is  little  variation  in  the 
expense  per  ton  for  machine  supplies  from  month  to  month, 
and  so  far  as  the  general  accounts  are  concerned,  unless  large 
stocks  are  carried,  it  will  be  proper  to  charge  such  supplies 
direct  to  Operating  Expense,  and  adjust  at  the  end  of  the  year 
by  comparison  of  the  inventory  at  the  beginning  and  end  of 
the  year. 

Mine  Operating  Expense — An  account  with  each  mine  to 
which  will  be  charged  all  expenses  for  labor  and  material  used 
in  and  about  the  mine,  classified  in  accordance  with  the  differ- 
ent accounts  of  work  done,  as  recommended. 

Close  out  by  charging  to  Operating  Account  of  the  same 
mine. 

Operating  Account — An  account  with  each  mine  to  which 
will  be  credited  the  net  realization  of  coal  at  the  mine ;  other 
income  belonging  to  such  property. 

Charge  proportion  of  general  expense ;  proportion  of  selling 
expense;  transfer  of  operating  expense;  royalties;  deprecia- 
tion and  depletion;  general  insurance,  liability  or  compensa- 
tion insurance ;  taxes,  excluding  income  and  war  taxes. 

Close  out  by  transferring  to  Income  Account. 

Income  Account — To  be  credited  or  charged  with  balance  of 
Operating  Account  of  each  mine,  results  of  coke  plant ;  results 
of  washer  operation;  interest  received  or  accrued;  all  other 
income  received  or  accrued. 

Charge  with  contingent  reserve;  maintenance  reserve;  or 
other  reserves ;  income  and  excess  profits  tax ;  interest  paid  or 
accrued. 


834  PROCEEDINGS    OF    AMERICAN    MINING    CONGRESS 

Close  out  to  Profit  and  Loss  at  end  of  the  year. 

Profit  and  Loss  is  credited  or  charged  at  end  of  year  with 
transfer  of  balance  of  Income  Account,  and  charged  with  divi- 
dends paid.  The  balance  of  this  account  to  rest  as  profits 
applicable  to  dividends,  and  chargeable  with  the  transfer  of 
such  amount  as  it  is  desired  to  transfer  to  permanent  surplus. 

Conclusion 

In  submitting  the  foregoing  suggestions  as  to  a  standard 
system  of  accounting  and  analysis  of  cost  of  production,  we 
fully  appreciate  that  many  operators  have  highly  developed 
systems  with  which  they  are  fully  justified  in  being  well  satis- 
fied, but  we  are  sure  that  the  advantages  of  uniformity  of 
practice  will  appeal  to  them. 

The  many  whose  accounting  methods  leave  much  to  be 
desired  will  derive  the  most  benefit  from  adopting  a  proper 
system.  They  will  know  better  how  they  stand,  what  they 
must  have  to  cover  their  requirements,  and  proper  accounting 
will  help  them  to  exercise  the  tenacity  and  perseverance  requi- 
site for  the  salvation  of  their  capital  and  to  win  a  proper 
return  thereon. 

An  accounting  system  will  not  run  itself,  nor  in  itself  reduce 
costs,  nor  increase  efficiency;  this  is  up  to  the  operator  him- 
self ;  he  must  study  and  compare,  vitalize  the  figures,  and  act 
on  the  facts  they  illuminate. 


TABLE  OF  CONTENTS  S35 


TABLE  OF  CONTENTS 


Page 

Opening  Session  of  Convention : . . .  3 

Proceedings  of  the  Second  General  Session 8 

Proceedings  of  the  Third  General  Session 11 

Proceedings  of  the  Fourth  General  Session 13 

Proceedings  of  the  Fifth  General   Session 17 

Annual  Members  Meeting  and  Election  of  Officers 23 

Annual    Banquet 28 

Proceedings  of  the  Sixth  General   Session 42 

The  Resolutions  as  Adopted 53 

Proceedings  of  the  Gold  Conference 6S 

Proceedings  of  the  Tax  Conference 99 

Proceedings   of  the   Tariff  Conference 89 

Proceedings  of  the  Oil-Shale  Conference 145 

Proceedings  of   the   Flotation   Conference 154 

Proceedings  of  the  Education  and  Public  Service  Conference 177 

Proceedings  of  the  Standardization  Conference 204 

Addresses  and  Papers  at  the  General   Session 2G9 

Papers  read  at  the  Education  and  Public  Service  Conference 449 

Papers   read   at   the   Oil-Shale   Conference 497 

Papers   read   at   the   Flotation   Conference 551 

Papers   read   at   the   Gold    Conference 615 

Papers  read  at  the  Tax  Conference 649 

Papers   read   at  the   Stand'ardization  Conference 688 


836  PROCEEDINGS    OF   AMERICAN   MINING    CONGRESS 

GENERAL  INDEX 

ADDRESSES   AND  TECHNICAL   PAPERS 

Activities  of  the  Wyoming  Geological  Survey  and  its  Relationship 

to  Growing  Industries — G.  B.  Morgan 471 

Administration  of  Law  Affecting  the  Mining  Industry — Edward  C. 

Finney 358 

American  Mining  Congress  Affairs — J.  F.  Callbreath 23 

American   Mining  Congress   and   Standardization 211 

Application    of    Industrial    Medecine    and    Health    Conservation    in 

Development  of  Mine  Labor  Efficiency — Arthur  L.  Murray 323 

Aspect  of  Petro-Shales  of  the  Western  Slope — J.  B.  Jenson 532 

Brief  of  Discussion  of  Joint  Report  of  Sub-Committee  on  Standardi- 
zation of  Underground   Power  Transmission  and   Equipment — 

Warren    R.    Roberts 719 

Coal  Mine  Cars— Data  on 237 

Committee  on  Resolutons — Names  of 12 

Condition  of  Gold  Producers  in  Colorado — George  E.  Collins 625 

Denver  and  the  Open-Shop — L.   Ward  Bannister 443 

Depletion  of  Mines  in  Relation  to  Invested  Capital — Wm.  B.  Gower  649 
Effect  of  Revenue  Act  of  1918  on  Methods  of  Valuation  of  Oil-lands 

— C.    A.    Fisher 077 

Federal    Co-operation — David    White 456 

General  Coal   Situation — J.  D.  A.  Morrow 436 

Geology  and'  Metal  Mining,   with  Particular  Reference  to  work  of 

the  U.  S.  Geological  Survey — F.  L.  Ransome. 407 

Gold-Mining  Conditions  in  Alaska — Milnor  Roberts 632 

Gold-Mining  Conditions  in  Arizona — W.   B.   Phelps 643 

Gold-Mining  Conditions  in  Oregon — Henry   M.  Parks 645 

Has  the  Attitude  of  Minerals  Separation  Retarded  Development  of 

Flotation    Concentration  ? — Wi    C.    Russell 556 

Industrial  Gold   Consumer's   Subsidy — H.   N.    Lawrie 615 

Industry    and    Government 412 

Influence  of  Flotation  on  Metallurgical  Practice — F.  A.  Thomson 610 

Invocation , 3 

Joint  Report  of  Sub-Committee  on  Standardization  of  Underground 
Power   Transmition   and    Equipment — K.    A.    Pauly   and    A.   B. 

Kiser 688 

Kansas  Industrial  Law — F.  Dumont  Smith 403 

Labor  Conditions  in  the  Bisbee  District,  Nov.  1920 — Arthur  Notman  294 
Methods  and  Problems  of  Federal  Taxation  of  the  Mining  Industry 

— J.    C.    Dick 671 

Mine    Accounting — L.    K.    Dift'enderfer 803 

Mine    Drainage — G.    R.    Wood 250 

Mineral    Leasing    Act— Clay    Tallman 377 


GENERAL  INDEX  837 

Page 

Minerals   Separation,  Defense   of — A.  A.   Cook 157 

Minerals   Separation's    Position    Under   the   Patent   and   Anti-Trust 

Laws — Gilbert    H.    Montague 589 

Mining    Oil-Shale — Horace    F.    Lunt 507 

Mining  Welfare  Work  in  Utah — C.  A.  Allen 477 

Modern  Industry  and  Industrial  Peace — James  Lord' 279 

National  and   International  Standardization — P.  G.  Agnew 785 

Next  Mining  Problem — Martin  J.  Gavin 497 

Oil-Shale  Industry  in  Scotland  and  England — Victor  C.  Alderson..  511 
Particular    Practices    of    Minerals    Separation    which    Mining    Men 

Have    Criticized — George    L.    N  ye 570 

Place  of  English  in  Training  Mining  Engineers— H.  H.  Stock 449 

Place  of  Mathematics  in  Training  Mining  Engineers — Robert  Peele  453 

Powderless  Mechanical  Process  for  Mining  Coal — D.  Vance  Sickman  334 

Power  from  Lignite  to  Develop  Interior  Alaska — John  A.  Davis ....  269 

Present  Condition  of  Gold  Mining  in  California— Fletcher  Hamilton  620 

President's  Annual  Address — Bulkeley  Wells 265 

Preliminary   Investigation   of  the   Standardization   of  Drilling  Ma- 
chines  and    Drill-Steel — Arthur    Notman 729 

Process  or  Art  of  Flotation— George  E.  Collins 551 

Procedure  under  the  Federal  Revenue  Law — Robert  N.  Miller 683 

Public   Service   Work   of  the    Industrial  Commission   of   Wisconsin 

Among  Mines  and  Quarries  of  the  State — F.  W.  Huels 481 

Recent  Development  in  Flotation — Philip  Argall 607 

Relation  of  Standardization  to  Mine  Management — Chas.  A.  Mitke  772 

Resolution   Committee, — Names   of ]2 

Social  Control  of  Industrial  Warfare— W.  G.  Merritt 419 

Standardization   and   Efficiency — Warren   R.   Roberts 214 

Standardization  Committee,  Joint  Meeting 204 

Standardization    of    Cars — James    Milliken 240 

Standardization  of  Drills — Arthur  Notman 729 

Standardization  of  Metal-Mining  Accounting— T.  O.  McGrath 806 

Standardization   of    Underground    Power   Equipment — K.   A.    Pauly 

and  A.  B.  Riser 688 

Standardization  of  Underground   Power  Equipment — Brief  on  Dis- 
cussion   719 

Standardization — Report  by  P.  G.  Agnew  on  Committee 211 

Standardization — Report  of   Wrarren   R.   Roberts 208 

Standardization  Work  of  U.  S.  Bureau  of  Mines — F.  G.  Cottrell 782 

Standardization  Work  of  U.  S.  Bureau  of  Standards— G.  K.  Burgess  794 
Standard  System  of  Accounting  and  Analysis  of  Cost  of  Production 

— T.  T.   Brewster 818 

State  Taxation  of  Metal  Mines — James  G.  Fitch 348 

Suggestions  for  Standardization  of  Hammer-Drills  and  Accessories 

— G.    H.    Gilman 721 

Survey   of    Conditions   of    Operators    and    Production    in    so-Called 

Open-Shop  Districts   of   West   Virginia — George   Wolfe 315 


838  PROCEEDINGS    OF   AMERICAN    MINING    CONGRESS 

Page 
Underground    Power    Equipment,    Standardization   of — K.    A.    Pauly 

and    A.    B.    Kiser 6S8 

U.  S.  Bureau  of  Mines  and  the  Mining  Industry — F.  G.  Cottrell 365 

Ventilation — W,.   J.    Montgomery 246 

Visual  Instruction  of  the  Mining  Industry  as  Carried  on  by  U.  S. 

Bureau   of   Mines — M.    F.    Leopold 492 

War    Finance    Corporation — Eugene    Meyer,    Jr., 430 

What  Failure  Means  to  South  Dakota — B.  C.  Yates 639 

What    1920    Developed    in    the    Anthracite    Industry — Edward    W. 

Parker 303 

Why    Colorado    Mining    Engineers    Adopted    the    Open- Shop    Move- 
ment— Charles    A.    Chase , 289 

Work   of   the  Geological   Survey   and   Mining  Conditions   in   North 

Carolina — Joseph   Hyde    Pratt 488 

Wyoming  Oil-Shales — G.   B.   Morgan 529 

SPEAKERS 

Agnew,   P.   G — National   and   International   Standardization 785 

Agnew,  P.  G. — Tentative  Agreement  between  Standardization  Com- 
mittees   211 

Alderson,  Victor  C. — Oil-Shale  Industry  in  Scotland  and  England..  511 

Allen,  C.  A. — Mining  Welfare  Work  in  Utah 477 

Allen,  Henry  I.  Governor  of  Kansas.     Wires  best  wishes 10 

Argall,    Philip. — Recent    Development    in    Flotation 607 

Bannister,  I.  Ward, — Denver  and'  the  Open-Shop 443 

Bayles,  L.  C.— Drilling  Machines 258 

Bierd,   W.    G. — The   Railroads 38 

Blackman,  E.  L. — Mine  Tax  Problems 124 

Boyle,  Emmet  D.  Governor  of  Nevada — Gold 60 

Boyle,    L.    C. — Industry    and    Government 412 

Braly,    Norman — Drilling    Machines 254 

Brewster,  T.  T. — Mine  Tax  Problems 105 

Brewster,  T.  T.— Standard  System  of  Accounting  and  Analysis  of 

Cost   of   Production 818 

Brooks,  Governor  of  Wyoming, — Oil  in  Wyoming 39 

Brunton,  D.  W. — Life  Membership  For 29 

Burgess,  G.  K. — Standardization  of  U.  S.  Bureau  of  Standards 794 

Callbreath,   J.   F.— Gold 72 

Callbreath,  J.  F.— Presentation  to 20 

Callbreath,  J.  F. — Work  of  American  Mining  Congress 23 

Chase,   Charles   A.— Why  Colorado   Mining   Engineers  Adopted   the 

Open-Shop  Movement 289 

Collins,  George  E. — Condition  of  Gold'  Producers  in  Colorado 625 

Collins,  George  E. — Process  or  Art  of  Flotation 551 

Cook,  A.  A. — In  Defense  of  Minerals  Separation 157 

Cottrell,  F.  G. — Standardization  Work  of  U.  S.  Bureau  of  Mines 782 

Cottrell,  F.  G. — U.  S.  Bureau  of  Mines  and  the  Mining  Industry 365 

Davis,  John  A. — Power  from  Lignite  to  Develop  Interior  Alaska . .  269 


GENERAL  INDEX  839 

Page 

De  Beque,   Captain— Oil-Shale 148 

Dick,   J.   C.— Methods   and   Problems  of   Federal   Taxation   of   the 

Mining    Industry 671 

Diffenderfer,  L.  R.— Mine  Accounting 803 

Eaton,  Chas.  A. — Present  Conditions 10 

Finney,   Edward  C. — Administration  of  Law  Affecting  the   Mining 

Industry 358 

Fischer,  A.  F. — Training  Filipinos 201 

Fischer,  A.  F.— Work  in  the  Philippines 43 

Fischer,  C.  A. — Affect  of  the  Revenue  Act  of  1918  on  Methods  of 

Valuation   of   Oil-Lands 677 

Fitch,  James  G. — State  Taxation  of  Metal  Mines 348 

Franklin,  Nelson. — Tariff  on  Tungsten 89 

Fulton,  C.  H.— Mathematics  in  Engineering 188 

Gavin,   Martin  J. — Next   Mining   Problem 497 

Gilman,  G.  H. — Suggestions  for  Standardization  of  Hammer-Drills 

and    Accessories 721 

Gower,  Wm.  B.— Depletion  of  Mines  in  Relation  to  Invested  Capital  649  ' 

Gower,  W.  B. — Mine  Tax  Problems 107 

Haig,  R.  M..  New  York, — Letter  form 114 

Hamilton,   Fletcher, — Present   Conditions   of   Gold   Mining  in  Cali- 
fornia   *. 620 

Hamilton,    Fletcher, — Quicksilver    Industry. 96 

Harding,  Warren  G.   (President-elect)   Wires  best  wishes 28 

Higgins,    Edwin, — Mining   Regulations    in    California 195 

Holmes,  G.  E.— Mine  Tax  Problems 99-134 

Huels,  F.  W. — Public  Service  Work  of  the  Industrial  Commission 

of  Wisconsin  Among  Mines  and  Quarries  of  the  State 481 

Illinski, — Mathematics    in    Engineering '  186 

Jenson,  J.  B. — Aspect  of  Petro-Shales  of  the  Western  Slope 532 

Kiser,  A.  B.  and  Pauly,  K.  A. — Joint  Report  of  Sub-Committees  on 
Standardization     of     Underground     Power     Transmission     and 

Equipment 688 

Landes,  Henry — Geological  Survey  of  Washington 197 

Lawrie,  H.  N. — Chairman  of  Gold  Conference 55 

Lawrie,  H.  N. — Industrial  Gold  Consumers'  Subsidy 615 

Leopold,  M.  F. — Visual  Instruction  of  the  Mining  Industry  as  carried 

on  by  U.  S.  Bureau  of  Mines 492 

Lord,  James. — Modern  Industry  and  Industrial  Peace 279 

Loring,  W.  J.,  Elected  New  President  of  American  Mining  Congress  34 

Lunt.  Horace  F. — Engineering  Education 189 

Lunt,  Horace  F.— Mining  Oil-Shale 507 

Lyon.  Dorsey, — Work  of  U.  S.  Bureau  of  Mines 202 

Macbeth.  Ravanel — Taxation 117 

McKenzie,   A.   G.— Blue-Sky    Laws 13 

Mathewson,   E.   P. — Gold 59 

McFadden,    L.   T — Telegram   from 88 

McGrath,   T.    O. — Mine  Tax    Problems 122 


840          PROCEEDINGS   OF   AMERICAN   MINING    CONGRESS 

Page 

McGrath,  T.  O. — Standardization  of  Metal-Mining  Accounting 806 

Merrill,  Joseph  F. — Metric  System 221 

Merritt,  W.  G. — Social  Control  of  Industrial  Warfare 419 

Meyer,  Jr.  Eugene, — War  Finance  Corporation 430 

Miller,  R.  N—  Mine  Tax  Problems 110 

Miller,  R.  N. — Procedure  Under  the  Federal  Revenue  Law 683 

Miller,  R.  N. — Taxation  at  fifth  general  session 17 

Milliken,  James,— Standardization  of  Cars 240 

Mitke,   C.  A. — Chairman   Joint   Standardization   Committee 204 

Mitke,  Chas.  A. — Relation  of  Standardization  to  Mine  Management  772 
Montague,    Gilbert    H. — Minerals    Separation's    Position    under    the 

Patent    and'   Anti-Trust    Laws 589 

Montgomery,    W.    J. — Ventilation 246 

Morgan,  G.  B. — Activities  of  the  Wyoming  Geological   Survey  and 

its   Relationship   to   Growing   Industries 471 

Morgan,  G.  B. — Wyoming  Oil-Shales 529 

Morrow,  J.  D.  A. — General  Coal  Situation 436 

•Morse,  Rev.  A.  H.   C. — Invocation 3 

Murray,  Arthur  L. — Application  of  Industrial  Medicine  and  Health 

Conservation  in  Development  of  Mine  Labor  Efficiency 323 

Notman,  Arthur, — Labor  Conditions  in  the  Bisbee  District  Nov.  1920  294 
Notman,  Arthur, — Prelimary  Investigations  in  the   Standardization 

of  Drilling  Machines  and  Drill-Steel 729 

Nutter,  E.  H.— In  Defense  of  Minerals  Separation 168 

Nye,  George  L. — Particular  Practice  of  Minerals  Separation  which 

mining  men  have  critized 570 

Parker,  E.  W— Wfrat  1920  developed  in  the  Anthracite  Industry 303 

Parks,  Henry  M. — Gold  Mining  Conditions  in  Oregon 645 

Pauly,'K.  A.,  and  Kiser,  A.  B. — Joint  Report  of  Sub-Committees  on 
Standardization  of  Underground  Power  Transmission  and 

Equipment 688 

Peele,  Robert, — Place  of  Mathematics  in  Training  Mining  Engineers  453 

Phelps,  W.  B. — Gold  Mining  Conditions  in  Arizona 643 

Plehn,  C.  C.,  of  California,  letter  from 115 

Pratt,  Joseph  Hyde, — Work  of  the  Geological   Survey   and   Mining 

Conditions  in   North  Carolina 488 

Ransome,  F.  L. — Geology  and  Metal  Mining,  with  Particular  Refer- 
ence to  work  of  the  U.  S.  Geological  Survey 407 

Richard,  T.   A.— Gold' 69 

Rickard,  T.  A. — Flotaton 172 

Roberts,  Milnor, — Gold  Mining  Conditions  in  Alaska 632 

Roberts,  Warren  R. — Brief  of  Discussion  of  Joint  Report  of  Sub- 
Committees  on  Standardization  of  Underground  Power  Trans- 
mission and  Equipment 719 

Roberts,  Warren  R. — Report  of  Coal  Mining  Branch.. 223 

Roberts,  Warren  R. — Report  of  General  Correlation  Committee 208 

Roberts,  Warren  R. — Standardization   and   Efficiency 214 

Rohn, — Flotation , 163 


GENERAL  INDEX  841 

Page 
Russell,  W.  C. — Has  the  Attitude  of  Minerals  Separation  Retarded 

Development  of  Flotation  Concentration 556 

Scholz,  Carl, — Chairman,  Joint  Standardization  Meeting 204 

Scholz,  Carl, — Fifth  general  session '. 21 

Seaman,  W.  H. — Gold 82 

Shoup,  O.  H.  Governor  of  Colorado, — Address  of  Welcome 8 

Sickman,  D.  Vance, — Powderless  Mechanical  Process  for  Mining  Gold  334 

Smith,  F.  Dumont, — Kansas  Industrial  Law 403 

Smith,  H.  W. — Tariff  Work  of  American  Mining  Congress 92 

Stearns,  T.  B. — Speech  at  Banquet 30 

Stock,  H.  H. — Place  of  English  in  Training  Mining  Engineers 449 

Tallman,  Clay, — Mineral  Leasing  Act 377 

Thomas,  C.  S. — Industrial  Honesty 30 

Thomson,  F.  A. — Education 177 

Thomson,  F.  A. — Influence  of  Flotation  on  Metallurgical  Practice  610 

Voorheis,  E.  C. — Tariff  on  Tungsten 90 

Wells,  Bulkeley, — President's  Annual  Address 265 

White,  David,— Education \  182 

White,  David, — Federal  Co-operation 456 

White,  David, — Need  of  Paleontologists 200 

White,  David, — Oil-Shale 151 

Wilson,  R.  G. — Mine  Tax  Problems , 119 

Wilson,  Wioodrow,  (ex-President)  Wire  from 5 

Wolfe,  George, — Survey  of  Conditions  of  Operators  and  Production 

in  so-called  Open-Shop  Districts  of  West  Virginia 315 

Wood',  G.  R. — Mine  Drainage 250 

Yates,  B.  C. — What  Failure  Means  to  South  Dakota..  639 


842 


PROCEEDINGS    OF   AMERICAN    MINING    CONGRESS 


OFFICERS  AND  DIRECTORS 

The  American   Mining   Congress 

1921 
OFFICERS 


W.  J.  LORING.  President 
DANIEL  B.  WENTZ.  First  Vice-President 
E.   L.  DOHENY.  Second  Vice-President 
THOMAS    T.    BREWSTER.    Third   Vice- 
President 

J.  P.  CALLBREATH,  Secretary 
GEORGE  H.  BAILEY,  Counsel 
HAROLD  N.   LAWRIE.  Economist 


W.  J.  LORING, 

San  Francisco,   Calif. 
BULKELEY  WELLS. 

Denver,  Colo. 
DANIEL  B.    WENTZ. 

Philadelphia,  Pa. 
JOHN  C.  HOWARD, 

Salt  Lake  City,  Utah 


W.  J.  LORING 


H.  W.  SMITH,  Chief  War  Minerals  Divi- 
sion 

ROBERT  G.  WILSON.  Tax  Division 
E.  CHAPPELL  PORTER.  Field  Secretary 
T.  R.  MOSS,  Editor  of  Journal 
E.    H.    PULLMAN     j 
IRA    L.    SMITH         f 
E.    RUSSELL     COOMBES,    Assistant    to 

the  Secretary 

• 


DIRECTORS 
THOMAS  T.   BREWSTER,     E.   P.    MATHEWSON, 


St.  Louis,  Mo. 
CARL  SCHOLZ, 

Charleston.  W.  Va. 
[IARRY  L.  DAY. 

Wallace,  Idaho. 
E.  L.   DOHENY. 

Los  Angeles,  Calif. 


New   York. 
HUGH   SHIRKIE. 

Terre    Haute,    Ind. 
ROBERT  LINTON, 

New  York  City 
JAMES   S.   DOUGLAS, 

Douglas,   Ariz. 


EXECUTIVE    COMMITTEE 
E.   P.   MATHEWSON 


ROBERT  LINTON 


STATE  CHAPTERS 


ALABAMA   CHAPTER, 
John  N.  Vincent,  Secretary, 
1308  American  Trust  &  Savings  Bank 
Bldg.,  'Birmingham,  Ala. 

ALASKA   CHAPTER. 
John  A.  Davis,  Governor. 
Fairbanks,  Alaska. 

ARIZONA   CHAPTER, 
J.  E.  Curry,  Secretary, 
Bisbee,   Ariz. 

CALIFORNIA   METAL   AND   MINERAL 

PRODUCERS'    ASSOCIATION 
(Chapter  of  A.  M.  C.), 
Robert  I.  Kerr,  Secretary, 
625  Market  St..  San  Francisco,  Calif. 


COLORADO   CHAPTER, 
M.  B.  Tomblin,  Secretary, 
Tabor  Opera  House  Block, 
Denver,    Colo. 

KANSAS-OKLAHOMA-MISSOURI 

CHAPTER, 

K.  L.   Koelker,   Secretary, 
Joplin,  Mo. 

NEW  MEXICO  CHAPTER. 
Burton    Bunch.    Secretary. 
Silver  City,  New  Mexico. 

UTAH    CHAPTER. 
A.  G.  Mackenzie.  Secretary, 
306  Boston  Bldg., 
Salt  Lake  City,  Utah. 


STATE  VICE-PRESIDENTS  $43 


STATE  VICE-PRESIDENTS 

The  American   Mining  Congress 
1921 

ALABAMA J.  B.  McClary,  1109  Brown  Marx  Bldg..  Birmingham 

ALASKA <7ohn  A.  Davis,   Fairbanks 

ARIZONA Norman  Carmichael,  Arizona  Copper  Co..  Clifton 

ARKANSAS Ross  Blake,  Batesville 

CALIFORNIA George  W.  Starr,  Grass  Valley 

COLORADO George  E.  Collins,  414  Boston  Bldg.,  Denver 

GEORGIA George  L.  Pratt,  Third  National  Bank,  Bldg.,  Atlanta 

IDAHO jJerome  J.  Day,  Wallace 

INDIANA J.  C.  Kolsem,  Terre  Haute 

ILLINOIS H.  C.  Adams,  Peerless  Coal  Co.,  McCormick  Bldg..  Chicago. 

NEW  MEXICO John  M.  Sully,  Hurley 

NEW  YORK Sidney  J.  Jennings,  120  Broadway,  New  York 

KANSAS O.  M.  Bilharz,  Baxter  Springs 

KENTUCKY Alexander  Blair.  Jr.,  Baskett 

MAINE C.  Vey  Holman,  Holman  Oaks,  Rockland 

MASSACHUSETTS.  Frank  P.  Knight,  50  Congress  St.,  Boston 

MICHIGAN Gordon  R.  Campbell,  care  of  Calumet  &  Ariz.  Mng.  Co..  Calumet 

MINNESOTA Charles  W.  Potts,  Deerwood 

MISSOURI Edgar  Wallower,  Keystone  Hotel,  Joplin 

NEVADA C.  B.  Lakenan,  McGill 

NORTH  DAKOTA... Hansen  Evesmith,  310  8th  St.,  South  Fargo 

OHIO W.  R.  Woodford,  744  Kirby  Building,  Cleveland 

OREGON Robert  M.  Betts.  Cornucopia 

OKLAHOMA J.  F.  Robinson,  Commerce  Mining  &  Royalty  Co.,  Miami 

PENNSYLVANIA... S.  D.  Warriner,  Philadelphia 

TENNESSEE iJ.  M.  Overton,  Nashville 

UTAH Tmer  Pett.  404  Dooly  Block,  Salt  Lake  City 

VIRGINIA Lee  Long.  Dante 

WASHINGTON : Conrad  Wolfle,  Yale  Hotel,  Chewelah 

WISCONSIN O.  C.  Irwln,  Berlin 

WEST  VIRGINIA... George  T.  Watson.  Fairmont 
WYOMING .vB.  B.  Brooks,  Casper 


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